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CONFIDENTIAL

Sep. 24, 2002

Insurance
Bad Faith
Valuation

Confidential

Settlement –  $150,000

Judge

Reginald A. Dunn

Court

L.A. Superior Central


Attorneys

Plaintiff

Craig W. Brunet


Defendant

David M. Phillips
(Mavredakis, Cranert & Crawford)


Experts

Plaintiff

Joe Salgueria
(technical)

Defendant

Boyd A. Veenstra
(technical)

Matthew A. Jackson
(technical)

Facts

The plaintiff brought a bad faith breach of insurance action against his auto insurance company. On May 30,
2000, the plaintiff was involved in a hit and run accident that damaged the front grill and hood of his 1984
BMV. The plaintiff submitted a claim to his insuance company for the damages. He had recently put $6000 of
improvements into the car, installing a new engine, interior, suspension, tires and a computer system.
The insurance company determined the BMW had only a salvage value of $250 and refused to repair the car.
The plaintiff claimed that, in refusing to repair the car, the insurance company relied on false information that
the car had been in five prior accidents, and that when the plaintiff pointed out that this information was false,
the insurance company claimed that the true information was not important and did not change the value of the
car.
Without notice to the plaintiff, the insurance company notified the DMV that the car was
"salvage," which reduced the value of the car by one-half. The damaged car was later sold for
$2,500. During litigation, the car was appraised at $4,934.

Result

In the first phase of the trial, the jury awarded the plaintiff $300 in damages for breach of contract and $40,000 in damages for bad faith. The jury determined that the defendant acted with malice and the plaintiff was entitled to putitive damages. Before the second phase of the trial, the parties settled the case for $150,000.

Deliberation

three hours

Poll

10-2 (breach of contract); 10-2 (bad faith)

Length

four hours


#107198

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