Barbara Allen as of the Estate of Gregg Geddes Allen, Deceased v. Allstate Insurance Company

The issue on appeal is whether the trial court correctly ruled that no reasonable settlement offer had been made to appellee Allstate. Having so ruled, the trial judge entered a judgment notwithstanding a jury verdict finding Allstate pable for bad faith in refusing to settle a claim against one of Allstate’s insureds. Barbara Allen appeals from this JNOV. Diverse citizenship is the basis of federal jurisdiction, 28 U.S.C. § 1332 ; California substantive law controls.

The following facts are not materially disputed. On April 14, 1970, Gregg Allen, the appellant’s husband, suffered grave injuries in an auto accident while a passenger in a car driven by Calvert Taylor, Allstate’s insured. Six months after this accident, Gregg Allen died as the result of his injuries, and Barbara Allen brought a wrongful death action in state court. Plaintiff Allen named as a codefendant Everett Taylor, Calvert Taylor’s father and employer; Allen alleged that Calvert Taylor was acting in the course and scope of his employment, and that Everett Taylor was thus vicariously liable for his employee’s negligence. During the trial of the wrongful death action, Everett Taylor’s insurer, Great American,…