$700,000
Awarded

BAD FAITH

Coverage Denied

SETTLEMENT: $700,000

CASE/NUMBER: Case I.D. Confidential.

COURT/DATE: San Diego Superior / Oct. 14, 1999.

JUDGE: Hon. Jay M. Bloom, Dept. 25.

ATTORNEYS: Plaintiff – Charles S. LiMandri (Law Offices of Charles S. LiMandri, Rancho Santa Fe)

Defendant – Gary A. Hamblet (Breidenbach, Buckley, Huchting, Halm & Hamblet, Los Angeles).

TECHNICAL EXPERTS: Plaintiff – Vincent Derby, insurance claims handling, North Hollywood; Albert Ickstadt, physics and engineering teacher, San Diego; Geoffrey Schroeder, fire consultant, Tujunga; Jim Smidt, fire consultant, San Diegeo

Defendant – Joseph Gildner, insurance adjuster, Tustin; Steven Mackaig, fire investigator, El Cajon; Leonard Paulin, insurance broker, Studio City.

FACTS: In the late evening hours of Dec. 9 or the early morning hours of Dec. 10, 10997, a fire broke out at a San Diego bar owned by the plaintiff. The bar was insured under a property policy issued by the defendant insurance company. The bar was destroyed in the fire.

The Plaintiff filed a claim with the defendant insurer, but the insurer denied coverage.

The plaintiff brought this action against the insurer based on breach of contract and breach of the implied covenant of good faith theories of recovery.

PLAINTIFF CONTENTIONS: The plaintiff contended that the firm started before the policy expired. The plaintiff also contended that the failure to renew his policy was improper; that defendant insurer breached the insurance policy and the implied covenant of good faith and fair dealing when it denied coverage for the fire in bad faith.

The plaintiff maintained that he was entitled to the benefits owed under the policy and any consequential damages sustained as a result of the defendant’s bad faith denial of the claim.

DEFENDANT CONTENTIONS: The defendant contended that the policy expired at 12:01 a.m. on Dec. 10, 1997; that the plaintiff did not suffer a loss until approximately two hours later; and that, therefore it owes no benefits under the policy.

The defendant denied liability for consequential and punitive damages.

DAMAGES: The plaintiff sought $95,866 in economic damages. The plaintiff also sought punitive damages.

JURY TRIAL: Length, 10 days; deliberation, six hours and 40 minutes.

SETTLEMENT DISCUSSIONS: Before trial, the plaintiff made a settlement demand for $200,000.

The defendant made a settlement offer of $26,000.

OTHER INFORMATION: The jury found the defendant breached its insurance contract with the plaintiff by denying his claim for benefits, and also found bad faith.

The jury awarded $250,000 for emotional distress, $28,000 for lost profits and $1,600 for medical bills. The judgment included $10,266 in prejudgment interest.

The settlement was reached two days after the jury reached its verdict, but before the punitive damages phase of the trial. This was approximately one year and two months after the case was filed.