Clinton Griggs, an Infant by His Guardian Ad Litem, Summer Griggs and Summer Griggs

Summary

The Supreme Court of New Jersey held that Franklin Mutual Insurance was estopped from denying coverage because it failed to promptly notify the insured of a potential disclaimer after receiving notice of the claim, and that the insurer is liable for the settlement amount provided the settlement is reasonable and made in good faith. The Court also allocated the evidentiary burdens, placing the initial burden of production on the insured and the ultimate burden of persuasion on the insurer. The Court affirmed in part, reversed in part, and remanded for further determination of the settlement's enforceability. Justice Clifford dissented, arguing that the settlement should be deemed ineffective as a matter of law.