Rova Farms Resort, Inc. v. Investors Ins. Co. of America (1974) 65 N.J. 474 323 A.2d 495 involved the insurer's intransigence in the face of a clearly attainable settlement.
Rejecting the insurer's contention that, "as a matter of law, it had no obligation to offer its policy limit in settlement without a firm, authorized and explicit demand within that figure ... ," the Rova Farms court said: "The better view is that the insurer has an affirmative duty to explore settlement possibilities. At most, the absence of a formal request to settle within the policy is merely one factor to be considered in light of the surrounding circumstances, on the issue of good faith." (Id., 323 A.2d at pp. 504, 505.)
While no formal demand had been presented (id. at p. 504), there were "a multitude of circumstances which should have impelled the insurer to energize a clearly attainable settlement" of the claim (id. at p. 501), yet the insurer "at no time" increased an offer it made to settle at a fraction of its policy limit (id. at p. 499).
As the Rova Farms court said, "the opportunities for settlement were so viable that it took a special genius at intransigence to kill them." (Id. at p. 506.)