Confidential
Settlement – $612,500Judge
Court
USDC Central
Attorneys
Plaintiff
Defendant
Siobhan M. Bishop
(Siobhan M. Bishop, P.C.)
Larry M. Arnold
(Cummins & White LLP)
Experts
Plaintiff
Daniel E. Pradel
(technical)
Martin W. Johnson
(technical)
Defendant
A. Marc Goupille
(technical)
Henry F. Kling
(technical)
John Stromquist
(technical)
Facts
Plaintiffs' commercial property was insured by Federal Insurance. In January 2002, after a structural bolt snapped, the plaintiffs discovered extensive structural damage. Structural damage had previously been discovered at the plaintiff's property in 1991 and 1994. While repairs were made to remedy the earth movement problem that caused the damage, the earth movement continued. After investigation of the January 2001 incident, the plaintiffs concluded that the damage was caused by "lateral bedrock creep," also characterized as a "slow-moving landslide," in the slope behind the building. They sought coverage for their damages under their policy and tendered to Federal in August 2001. Federal denied coverage on a number of grounds. The plaintiffs then filed suit in Simi Valley Superior Court on Sept. 9, 2003. Federal had the case removed to Federal Court on Oct. 20, 2003.
Contentions
PLAINTIFFS' CONTENTIONS:
The plaintiffs contended that the damages were not caused by settlement, but by bedrock creep, which was not excluded; that there was no "faulty planning or design;" that there was no reasonable warning of the incident that triggered that claim, because there had been ample repairs and inspection to correct "settlement" problems, and those issues had previously been addressed; and that slope repair was covered because, otherwise, it would be impossible to make permanent repairs to covered structural damage.
DEFENDANT'S CONTENTIONS:
Defendant contended that there was no coverage because the loss "manifested" prior to the inception of the Policy; the loss was not "fortuitous;" any damage was either due to "settlement" or "faulty planning and design," both of which were excluded pursuant to the policy; and while the policy provided coverage for the "building," damage to the foundation or the land under the building was expressly excluded from coverage and thus the repair of the slope was not covered.
Settlement Discussions
The defendants unsuccessfully moved for Summary Judgment. Thereafter, just before expert depositions, in August 2005, a mediation session was held with a private mediator, which did not result in settlement. The parties continued settlement negotiations privately, and settled in September 2005. Notice of Settlement was filed on Sept. 26, 2005, before the Oct. 4, 2005 trial date.
Damages
The plaintiffs claimed damages totaling over $1 million, in three separate but related categories: (1) repair of structural damage to the building; (2) repair of the slope behind the building to stop it from moving and creating more structural damage; and (3) costs for expert consultants to inspect damage, analyze causes of damage, and recommend and/or design repairs.
Result
Total settlement was for $612,500, payment by the defendant, with no admission of liability and dismissal with prejudice of all claims.
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