Carruba v. Transit Casualty Co‪.‬

This is an appeal from a jury verdict denying recovery to plaintiff-appellant, Joe Carruba, administrator of his fathers estate, upon the claim that defendant-appellee, Transit Casualty Company, acted in bad faith in failing to settle an automobile accident claim within the $10,000 limits of his fathers insurance policy. In the state trial arising from the automobile accident, the jury returned a verdict finding Norman Carruba vicariously liable for the negligence of the driver of his vehicle and awarded a judgment against him for $22,000. However, the trial court credited against this judgment $9,000 representing a settlement received in the state court by the plaintiff, Myrtle Speno, from the insurance carrier which had the liability coverage on the vehicle in which she was a passenger at the time of the accident. Following the jurys verdict, Transit refused to settle the judgment against its insured for $9,500, electing instead to prosecute an appeal. Upon the appeal to the Kentucky Court of Appeals, the credit of $9,000 was reversed and the $22,000 judgment was affirmed. Carruba v. Speno, 418 S.W. 2d 398 (1967). This present action, initiated in state court but removed to federal district court, sought to recover the difference between the limits of the insurance policy and the amount of the judgment rendered against the estate of Norman Carruba. Joe Carruba was substituted as plaintiff when his father died during the pendency of this action.