Gordon Vann dba Vann's Auto Body Shop v. The Travelers
Published: Apr. 26, 1997 | Result Date: Feb. 14, 1997 | Filing Date: Jan. 1, 1900 |Case number: 7278154 – $26,460,000
Judge
Court
Alameda Superior
Attorneys
Plaintiff
Philip L. Pillsbury Jr.
(Pillsbury & Coleman LLP)
Defendant
Facts
In 1991, plaintiff Gordon Vann, the 70-year-old proprietor of an automobile body shop in Berkeley which he operated for more than 40 years, was sued by his landlord who claimed that Vann had environmentally contaminated the premises. The plaintiff, dba Gordon Vann Auto Body Shop, notified his longtime agent at defendant The Travelers, who refused the tender, claiming that he could not find any records concerning the plaintiff. The plaintiff was forced to pay for his own defense of the landlord's action. When he could no longer afford to do so, his lawyer withdrew and he was in pro per for over a year. Vann then hired a second attorney to defend him in the landlord-tenant dispute. The second attorney was able to obtain information from the broker as to several of Vann's insurers. After reviewing the policies, complaint, and information provided to it, the Travelers declined to defend or indemnify Vann, citing several policy exclusions and conditions as the basis for its denial. Travelers offered to pay Vann $15,000, and explaining and explained that this sum represented the proportionate share of the then-current demand in relation to the proportion of time which Travelers insured Vann over the 40-year history of his operations. Travelers principally claimed that coverage was excluded by the pollution exclusion, which excluded coverage unless the pollution was caused by a sudden and accidental event, and by the owned property exclusion, which precluded coverage for damage to property in the insured's possession. Travelers then offered Vann $15,200 for a full release, including a site release. Thereafter, Vann attempted to pay his new lawyer, Leandro Duran and the expert fees incurred in defending the action, but, in so doing, was unable to pay the payroll taxes for his business. Thereafter, the plaintiff's business failed and he was forced to file bankruptcy. His home is in the process of being foreclosed due to an IRS lien. Vann claimed that had The Travelers paid the $60,000 in attorney's fees incurred between 1991 and 1993, he would have been able to pay the IRS the $80,000 owed to it. In the meantime, Vann filed an action against The Travelers. The Travelers successfully sought summary judgment against Vann with the trial court agreeing that the Travelers had no duty to defend. The trial court decision was appealed to the First District, which reversed the trial court in a published decision. As a result of that decision, The Travelers paid the reasonable and necessary fees incurred after it first received notice of the lawsuit, and settled the underlying matter on Vann's behalf. The case then proceeded to trial on the issues of the amount of damages caused by the defendant's refusal to defend and punitive damages. The plaintiff brought this action against the defendant based on bad faith theories of recovery.
Settlement Discussions
The plaintiff made a settlement demand for $10 million. The defendant made a settlement offer of $150,000.
Damages
The plaintiff claimed $60,000 in damages for reimbursement of attorney's fees, $175,000 for tax lien and $200,000 to $250,000 for loss of the business. The plaintiff also claimed an unspecified amount for emotional distress and punitive damages.
Other Information
The verdict was reached approximately three years after the case was filed.
Deliberation
1 day (liability and compensatory damages), 2 hours (punitive damages)
Poll
11-1 (liability and damages), 12-0 (that punitive damages should be awarded), 10-1 (amount of punitive damages)
Length
3 weeks
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