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CONFIDENTIAL

Dec. 31, 1994

Breach of Contract
Insurance Bad Faith

Confidential

Settlement –  $175,000

Judge

Homer L. Garrott

Court

L.A. Superior Inglewood JD


Attorneys

Plaintiff

William E. von Behren

Robert F. Nunes Jr.


Defendant

Steven C. Miller

Mark Harris


Experts

Plaintiff

Arthur Fries
(technical)

Don Kelley
(technical)

Howard C. Rile Jr.
(technical)

Defendant

Robert L. Westin
(technical)

Frank Caliri III
(technical)

Barbara J. Paull
(technical)

Facts

In the underlying case, the Plaintiff was the insured who submitted a claim in April of 1989 for disability benefits under his policy with Defendant insurance company. Upon investigation, the insurance company learned that Plaintiff's agent, the Defendant in the instant case, had sold the insured a disability policy from another insurance company, 3 months prior to this Defendant insurance company's policy. The agent denied any knowledge of the other policy. Plaintiff insurer then attempted to rescind and/or reform the insured's policy. The insured then filed a lawsuit against Defendant insurance company and Plaintiff's agent alleging that Defendant insurance carrier had breached its insurance contract and committed bad faith by attempting to rescind or reform the policy when it knew or should have known that its agent sold the insured the other company's disability policy. During discovery the agent testified that, although he completed the application for the other policy with the insured, he did not submit it to the company and was not informed that the policy was issued. The Defendant insurance company settled the lawsuit with the Plaintiff insured in the amount of $850,000 and then filed this instant case for negligence and indemnification against the agent.

Settlement Discussions

Plaintiff insurance carrier contends it demanded $225,000 prior to jury selection and Defendant agent offered $115,000.

Damages

$450,000 general damages.


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