Johansen V. California State Automobile Association Inter-Insurance Bureau

In a prior action for damages arising out of an automobile accident, plaintiff Muriel   Johansen obtained a judgment of $33,889.30 against Gary and Joyce Dearing, a sum well in excess of the Dearings' automobile insurance policy limits. Although the Dearings' insurance carrier, defendant in the instant action, assumed the Dearings' defense in the earlier suit, it refused, during the course of that litigation, to accept a settlement offer within policy limits because it believed that the accident did not fall within the policy's coverage.