Gary Estep v. California Capital Insurance Company, et al.
Published: Nov. 26, 2005 | Result Date: Nov. 3, 2005 | Filing Date: Jan. 1, 1900 |Case number: 02CECG04519SJK Verdict – $117,963
Judge
Court
Fresno Superior
Attorneys
Plaintiff
James H. Wilkins
(Wilkins Drolshagen & Czeshinski LLP)
Defendant
James M. Baratta
(Grant, Genovese & Baratta LLP)
Experts
Plaintiff
David F. Peterson
(technical)
Defendant
Bernard Feldman
(technical)
Facts
On Oct. 1, 2002, plaintiff Gary EstepÆs house was destroyed by a fire. The plaintiffÆs homeowners insurance,
defendant California Capital Insurance Company, advanced the plaintiff $5,000 in additional living expenses
("ALE") and $25,000 for contents. A further advance of $78,000 for actual cash value of the dwelling was
provided within six weeks of the fire. However, disagreement arose regarding the value of the contents and
application of a business property exclusion. The plaintiffÆs file was forwarded to the defendantÆs Fresno
counsel Gordon Park by a claims representative employed by the defendant for an Examination Under Oath
("EUO"). However, Mr. Park never received the claims file because it was sent to the wrong address. The
defendantÆs claims representative failed to maintain a copy. Furthermore, the plaintiffÆs clientÆs representative
terminated her employment and her supervisor also left the company within one week thereafter. The plaintiff
could not reestablish contact with the company and alleged that his phone calls were not returned and that he
was treated rudely when he did speak to a third-party administrator.
In May 2003, it was discovered that the file had never been received by Mr. Park and a new claims representative
had been appointed. Park proceeded with the EUO in June 2003, and the coverage issue regarding business
property was resolved in favor of the plaintiff. Finally, in August 2003, another claims representative was
appointed to resolve the matter. However, a dispute arose regarding salvage value and additional ALE benefits.
A third-party administrator negotiated a settlement during September 2003 and affirmed final payments with
the plaintiffÆs attorney in October 2003. The final settlement drafts were sent to Mr. Park to prepare a release
and settlement agreement. Mr. Park included a bad faith release in the settlement documents which the
plaintiffÆs attorney claimed exceeded the scope of the resolution and was, in and of itself, bad faith.
The plaintiff also contended that the amounts to be paid were amounts the defendant had agreed were owed and
undisputed, and thus the plaintiff contended that additional sums were still owed under the contents benefits of
the policy. The plaintiff then refused to sign any settlement agreement and demanded unconditional payment of
all policy benefits as undisputed.
The defendant agreed to allow the plaintiff to negotiate the drafts on completion of the dwelling under the
replacement coverages for the full extent of the policy limits; extended ALE for 12 months during which the
plaintiff and his disabled mother had been displaced during construction; but continued to insist upon a release
or some type of settlement release regarding final payment on the contents. The plaintiff refused and filed suit.
Settlement Discussions
The plaintiff served a CCP 998 for $150,000 along with the service of the complaint. Shortly after an unsuccessful mediation, the defendant served a CCP 998 Offer of $25,000. After pre-trial discovery had been completed and shortly before trial, the defendant served a new CCP 998 Offer of $75,000. The last demand made by the plaintiff was $300,000.
Damages
$47,963 contract benefits; $91,000 Brandt fees damages; emotional distress and punitive damages alleged.
Result
Contract damages for the unpaid insured value of the contents of $47,963; Brandt fees of $70,000.
Other Information
The defendant admitted that there had been many mistakes made in the claims handling and that further sums were owed under the contract but disputed the amount. The jury found breach of contract and breach of implied covenant but denied the plaintiff recovery for emotional distress and punitive damages.
Deliberation
five hours
Poll
12-0 (breach of contract), 10-2 (breach of implied covenant), 11-1 (no malice)
Length
four weeks
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390