Johnson v. Continental Insurance Companies

Martha and Charles Johnson (Johnson) appeal from the trial court’s grant of summary judgment in favor of The Continental Insurance Companies.

On June 3, 1983, Martha Johnson sustained injuries when the truck she was driving rolled over, causing a propane stove within the vehicle to explode. Johnson’s passengers, Beverly Swaton, Edward Swaton, and Thomas Parrish, and passerby, James Esswein, were also injured.

At the time of the accident, Johnson was insured by Continental. Johnson’s three passengers and Esswein, the passerby, submitted claims against Johnson for liability payments under the terms of the Continental policy.

On July 6, 1983, Johnson’s attorney made a written demand for settlement on behalf of claimants Beverly and Edward Swaton. He advised Continental that he was “authorized by the claimants to extend an offer of settlement for policy limits in the sum of $50,000.00 under [the] policy . . . issued by the Continental Insurance Company.” (Italics added.) He attached a copy of the policy declaration page to the correspondence. Within two weeks after receipt of the demand, Continental paid out its full primary liability coverage policy limit of $50,000 to…