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CLEARWATER v. STATE FARM MUT. AUTO. INS. CO.

No. CV-89-0175-PR.

164 Ariz. 256 (1990)

792 P.2d 719

Alfred CLEARWATER and Annette Clearwater, husband and wife, as surviving parents of Alfred B. Clearwater, Plaintiffs-Appellees/Cross-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Appellant/Cross-Appellee.

Supreme Court of Arizona, En Banc.

Reconsideration Denied June 19, 1990.

Attorney(s) appearing for the Case

Langerman, Begam, Lewis & Marks, P.A. by Thomas F. Dasse, Phoenix, for plaintiffs-appellees/cross-appellants.

Rake, Copple, Downey & Black, P.C. by Scott E. Boehm, O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, P.A. by Ralph E. Hunsaker, Frank M. Fox, Phoenix, for defendant-appellant/cross-appellee.

The Langerman Law Offices by Amy G. Langerman, Richard W. Langerman, Phoenix, for Amicus Curiae Arizona Trial Lawyers Assn.

OPINION

CORCORAN, Justice.

We granted review to examine the applicable standard of conduct in a third-party bad faith claim against an insurer for failure to accept a reasonable settlement offer within policy limits. We have jurisdiction pursuant to Ariz. Const. art. 6, § 5(3), and A.R.S. § 12-120.24.

Facts

On August 30, 1980, Alfred B. Clearwater was killed in a traffic accident when his motorcycle collided with a car driven...

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