Cain

Preliminary Statement

Elaine Cain was injured in a single car collision. The automobile involved in the accident was owned by Bing Woo Jew and insured by State Farm Mutual Automobile Insurance Co. (State Farm); the liability limits of this policy were $25,000.

Elaine Cain subsequently filed an action against Bing Woo Jew. Prior to trial settlement offers were put forth by Miss Cain’s attorney; these were rejected by State Farm although the offers were within the policy limits. The jury found that Jew had been operating the vehicle at the time of the accident, and returned a verdict in the amount of $57,883 in favor of Cain. Of this amount $25,000 was paid to Cain by State Farm pursuant to the Jew insurance policy.

Jew thereafter executed a written assignment to Cain transferring to her any cause of action he might have against State Farm by virtue of its failure to settle within the policy limits, including the right to sue for the amount of the excess verdict. He reserved to himself, however, any cause of action for physical injuries sustained as a result of the failure to settle. Subsequently, Cain and Jew jointly brought the present action against State Farm…