Alton W. Beach v. Donald M. Runnels

On January 4, 1960 an automobile driven by Alton W. Beach collided with an automobile driven by Donald M. Runnels resulting in property damage and personal injuries to both parties. Runnels sued Beach in Cause No. 49,415, in the district court of Dallas county, seeking damages because of Beachs alleged negligence. Beach owned an insurance policy issued by Southwestern Fire & Casualty Company which provided liability coverage which included an obligation by the insurance company to defend the pending suit. The policy also provided that the insurance company was to have the exclusive right to settle suits within the policy limits without the consent of the insured. Pursuant to the terms of this policy, Southwestern Fire & Casualty Company undertook the defense of the suit on behalf of Beach and, through attorneys provided by such company, filed an answer on his behalf. Beach, at the written invitation of the insurance company, retained his own counsel. After the suit had been pending for more than four months the suit was settled and compromised by the attorney representing the insurance company, without the consent of Beach and his personal attorney, and an order of dismissal was entered on May 31, 1960.