The opinion
Jacobs, J., joined by Bukliug, J.
(dissenting). We hold the view that an insurance company’s relation to an assured whose defense it is conducting bears fiduciary aspects and that it may justly be considered under obligation to act in good faith and with due care not only in its investigation and defense but also in its handling of any settlement offer which would remove the assured’s jeopardy of a judgment exceeding the policy coverage. See Dumas v. Hartford Accident & Indemnity Co., 94 N. H. 484, 56 A. 2d 57 (Sup. Ct. 1947). And we are satisfied that, in the instant matter, *314 the assured’s evidence that the insurance company defaulted not only in its investigation but also and more particularly in its handling of the settlement offer was sufficient to withstand the insurance company’s motion to dismiss at the end of the assured’s case; although there was evidence from which other inferences might be drawn, the assured was clearly entitled at the close of its case to the full benefit of all of its favorable testimony and the inferences which a jury might draw therefrom. See Martin v. Bengue, Inc., 25 N. J. 359, 362 (1957).
In Shellhammer v. Lehigh Valley Railroad Co., 14 N. J. 341, 345 (1954), Justice Heher pointed out that the true question at the close of the plaintiff’s case is whether the jury could “on any reasonable view of the evidence, rejecting all evidence and inferences unfavorable to the plaintiff,” find that the plaintiff has established the facts essential to its cause of action. In its treatment of the evidence the majority has not really addressed itself to that question but has dealt with the matter as if this court, rather than the jury, were the proper trier of the facts. In the process it has reversed the traditional course by accepting the evidence which it views to be favorable to the insurance company while rejecting the unfavorable evidence which it acknowledges to be inconsistent but seeks to explain away. However, this in no wise eliminates from the record the evidence which is favorable to the plaintiff nor does it justify its judicial rejection without calling upon the defense for its testimonial version of the circumstances; and it ignores the many decisions in our State which hold that where there are inconsistencies in the plaintiff’s case it is nonetheless entitled, on a motion for dismissal, to the benefit of “so much of the evidence” as is favorable to its claim. See Kozlowski v. Pavonia Fire Ins. Co., 116 N. J. L. 194, 200 (E. & A. 1936); Repasky v. Novich, 113 N. J. L. 126, 129 (E. & A. 1934); Weinstein v. Weinstein, 10 N. J. Super. 68, 72 (App. Div. 1950).
It is admitted that the injured party had duly made an offer of settlement in the sum of $3,600. The offer was, *315 summarily and without counter proposal at any time, rejected by the insurance company’s claims manager who has made sworn admissions from which a jury could readily infer that he did not act in good faith and with due care for the protection of the assured which was in danger of a judgment in excess of the policy limit of $5,000. His admissions were unequivocal and included the following: (1) although the insurance company had the name and address of a young boy (who according to a statement given to it by the assured’s driver had run in front of his car before the accident) it never made any effort to interrogate him; (2) although the insurance company’s file contained a statement by the sole disinterested witness that the assured’s driver had not stopped though he came out of a stop street, he did not know about the statement when he rejected the settlement offer; (3) although he knew that there was a claim by the injured party of probable permanent injury he did not “deal in probabilities”; and (4) although he received the offer of settlement before the trial began he made no inquiries and took no steps whatever towards ascertaining what testimony could be expected from the treating physicians (Drs. Golden and Lepree) as to the condition of the injured party at that time.
Indeed, the claims'manager went further and said that although he was aware that Dr. Lepree was a very competent orthopedist it would have made no difference to him, in evaluating the claim for purposes of settlement, what opinion as to the nature and permanency of the injuries was expressed by Dr. Lepree; and along the same lines he said that it would have made no difference to him what the sole disinterested witness said in his statement as to the failure of the assured’s driver to stop at the stop street. There was evidence indicating that the assured was never notified of the offer of settlement and that although the likelihood of a substantial verdict in favor of the injured party appeared early during the course of the trial, the insurance company never took any affirmative steps to reopen the settlement discussion. See Ballard v. Citizens Cas. Co. of New York, 196 *316 F. 2d 96, 103 (7 Cir. 1952). The transcript of the trial was introduced in evidence and discloses that the injured party presented not only her own testimony but also that of her passenger, her treating physicians and the sole disinterested witness who testified that he did not see any boy run in front of the taxicab and that the assured’s driver had come out of the stop street without stopping at all. The injured party testified fully as to the accident and her resulting injuries and as to her medical expenses, car damages and loss, of earnings which apparently aggregated almost $2,500; she also testified that the statement which she gave to the insurance company was obtained by its investigator while she was under heavy sedation in a hospital bed and while she lacked her reading glasses. The insurance company did not offer its investigator as a witness; indeed its only witnesses were the assured’s driver who was a highly interested defendant in the proceeding and its doctor who was hardly in any position to controvert the testimony by the injured party’s treating physicians as to the permanency of her elbow injury because, as he testified, he never made any diagnosis of the elbow injury. A jury could undoubtedly find from the trial transcript that the testimony weighed heavily in favor of the injured party on both issues of liability and damages; in this connection it is interesting to note that when Judge Hughes refused to interfere with the jury’s verdict of $13,500 against the assured and its driver, he expressed the view that “there was a lopsided case here of proof as far as liability was concerned.”
Before a settlement offer can conscientiously or intelligently be passed upon, the readily available evidence which is adverse as well as favorable must be fairly considered and weighed; a jury could find that, in the instant matter, the claims manager did not do that at all but that, on the contrary, he considered only the evidence he had supporting the defense; and a jury could infer, in the light of the claims manager’s admissions and all of the circumstances, that he was willing to gamble on obtaining a favorable verdict from the jury *317 (thereby sacrificing the interests of the assured and continuing its jeopardy) only because he was improperly influenced by the fact that the insurance coverage was so little above the settlement offer. Cf. Henke v. Iowa Home Mutual Casualty Company, 97 N. W. 2d 168, 175 (Iowa Sup. Ct. 1959). Even the authorities which speak only in terms of a good faith obligation on the part of the insurance company rather than one of both good faith and due care would recognize the legal sufficiency of the assured’s showing here on the motion to dismiss at the end of its case. Thus in Radcliffe v. Franklin National Ins. Co. of New York, 208 Or. 1 , 298 P. 2d 1002, 1024 (1956), the Oregon Supreme Court, in reversing a trial court’s action directing a judgment in favor of the insurance company, noted that “only a decision made by one who exercised due diligence in appraising himself of the material facts is entitled to respect as made in good faith,” and that “an insurer, upon receiving a settlement offer in a case such as this in which an excess verdict is sought, owes a duty to inform the insured so that the latter may take whatever course that is necessary for the protection of his own interests in the event the insurer rejects the offer.” In Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 235 N. W. 413, 415 (Sup. Ct. 1931), the court stated that the insurance company’s rejection of a settlement offer should be an honest and intelligent one and that “it must be based upon a knowledge of the facts and circumstances upon which liability is predicated, and upon a knowledge of the nature and extent of the injuries so far as they reasonably can be ascertained”; it stated further that this placed upon the insurance company an obligation “to make a diligent effort to ascertain the facts upon which only an intelligent and good-faith judgment may be predicated.” In Brown v. Guarantee Insurance Company, 155 Cal. App. 2d 679 , 319 P. 2d 69 (D. Ct. App. 1958), the court outlined various factors which it considered pertinent on the issue of the insurance company’s good faith, including, inter alia, “the failure of the insurer to properly investigate the circum *318 stances so as to ascertain the evidence against the insured.” In Ballard v. Citizens Cas. Co. of New York, supra, the court, in sustaining a verdict against an insurance company for its improper rejection of a settlement offer, referred to the circumstances which indicated the danger of a verdict in excess of the policy limit and had this to say:
“* * * the company never offered to settle, even on the basis of nuisance value, and rebuffed each offer of settlement: the written offer forty days before the date of the trial to settle for $4,000, to which no reply or counter-offer was made; the written offer three weeks before trial to settle for $2,500, to which the attorney for the company replied he was not interested in a settlement for the face of the policy; and the offer made upon the morning of the first day of the trial to settle for $2,000, which was rejected by the defendant’s attorney’s rather curt statement, T am not interested in the settlement.’ Even after the case turned ‘sour,’ the company’s attorney did not show any interest in attempting to settle the case, and did not report to the insurance company the rapidly deteriorating situation. We think that under such circumstances a jury question was presented on the issue of good faith in the matter of settlement, and that substantial evidence supports the verdict.” 196 F. 2d, at pages 102-103
In Dumas v. Hartford Accident & Indemnity Company, supra, there was an automobile accident resulting in a law action by the injured party against the assured whose insurance coverage was $5,000. The injured party offered to settle for $4,000 but the insurance company rejected the offer and the case went to trial resulting in a verdict of $12,000. The insurance company paid $5,000 and the assured paid the balance. He then sued the insurance company, charging that it failed to exercise due care in the handling of the settlement offer and he obtained a favorable verdict from the jury. This was sustained by the Supreme Court of Hew Hampshire which expressed the view that the insurance company is under an obligation of due care and that in deciding whether or not to settle it “must be as quick to compromise and dispose of the claim as if it itself were liable for any excess verdict”; it found that there was “evidence from which the jury could find negligence on the part of *319 the defendant in failing to settle” and in the course of its opinion said:
“Something more than an act of judgment is involved in the decision of the insurer to stand trial or to settle. A judgment carefully arrived at must be accompanied by conduct consistently therewith. So far as its interest is concerned, there must be a willingness within the policy limit reasonably to spend its money in purchasing immunity for the insured. Due care must be exercised in ascertaining all the facts of the ease both as to liability and damages, in learning the law and in appraising the danger to the insured of being obliged to pay the excess portion of a verdict. While the insurer has a reasonable right to try its case in court, it cannot be unduly venturesome at the expense of the insured. The caution of the ordinary person of average prudence should be employed.” 56 A. 2d, at page 60
See Note, “Liability of insurer for failure to settle suit,” 62 Harv. L. Rev. 104 , 106 (1948); Annotation, Duty of liability insurer to settle or compromise, 40 A. L. R. 2d 168, 186 (1955).
If during its investigation the insurance company had interrogated the young boy it would have obtained information which would have corroborated or shed doubt on the statement of the assured’s driver and would, in either event, have aided in its evaluation; if, when he received the offer of settlement, the claims manager had considered the statement by the sole disinterested witness that the assured’s driver had come out of a stop street without stopping he would have been in a position to evaluate the driver’s statement to the contrary and the probabilities before a jury on the issue of liability; and if at that time the claims manager had considered the injured party’s claim of probable permanent damage and had made inquiries as to the testimony which could be expected from her treating physicians he would have been in a position to evaluate the insurance company’s medical report and the probabilities before a jury on the issue of damages. But unfortunately the young boy was never interrogated by the insurance company and by his own admission the claims manager did not know of the state *320 ment by the disinterested witness when be rejected the settlement offer and did not at that time consider the plaintiff’s claim of probable permanent damage or make any inquiries as to the testimony which could be expected from her treating physicians. In the light of the foregoing and all of the circumstances, a jury could readily have found that in its handling of the settlement offer the insurance company did not fairly discharge its obligation to act in good faith and with due care and that as a result the assured was ultimately subjected to liability for the excess judgment; in our State, questions of due care and proximate causation are ordinarily left to the jury for its determination and we see no just reason for precluding that course here. See Rappaport v. Nichols, 31 N. J. 188, 203 (1959); Martin v. Bengue, Inc., supra, 25 N. J., at p. 374; Brower v. N. Y. C. & H. R. R. Co., 91 N. J. L. 190, 191 (E. & A. 1918).
We would reverse the judgment of dismissal and remand the cause for further proceedings in the trial court.
For affirmance—Chief Justice Weintraub, and Justices Francis, Proctor and Hall—4.
For reversal—Justices Burling and Jacobs—-2.