Thomas Duncan; Nancy Duncan v. State Farm Fire and Casualty; State Farm General Insurance Company; Barclays American Mortgage Corp.; GE Capital Corp.
Published: Dec. 13, 1997 | Result Date: Jul. 30, 1997 | Filing Date: Jan. 1, 1900 |Case number: SCV04685 – $0
Judge
Court
San Bernardino Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Veronica Thomas
(medical)
Ken Wilkinson
(technical)
Arthur G. Floyd
(technical)
Defendant
Gregory W. Axten
(technical)
Facts
On June 28, 1992, plaintiffs Thomas and Nancy Duncan's 30-year-old house in Crestline sustained moderate damage during the Landers/Big Bear earthquake. Immediately after the earthquake, plaintiffs retained an engineer who advised them that the damage did not render the house uninhabitable. Following defendant State Farm Insurance Company's (State Farm) inspection of the house, the company issued an Actual Cash Value (ACV) payment to plaintiffs, notifying them that State Farm should be contacted if additional damages were discovered during repairs. After demolishing the home's 37-foot chimney, plaintiffs discovered that the house was leaning by two inches and notified defendant. State Farm retained a consulting structural engineer and removed portions of the interior to further inspect. State Farm's consultant determined that although much of the home's out-of-plumb condition was attributed to pre-existing damage, at least 25 percent of the condition was attributed to further weakening by seismic activity. The plaintiffs objected to the consultant's report and demanded that State Farm rely upon the opinions of their engineer. After State Farm complied with the insured's request, plaintiff's engineer issued a less favorable report, concluding that the uneven condition of the deck surrounding the house was attributed to dilapidation, rather than the earthquake. State Farm removed the costs of repairing the dilapidation damage from the scope of its estimate. This cost was subsequently added back into the estimate as part of a negotiated scope of repairs between State Farm and plaintiffs' consulting contractor. The plaintiffs then claimed that State Farm's pricing was too low. Using the "Xactimate" pricing system, State Farm agreed only to pay average prices, rather than the prices charged by plaintiffs' contractor. The plaintiffs never entered into a contract to repair the structure. Of the $42,624 actual cash value payments issued by State Farm, the plaintiffs used only $29,000 to conduct cosmetic repairs to the home and to remodel the kitchen. Nothing was spent for structural restraightening of the home. The plaintiffs brought this action against defendants based on breach of contract and breach of implied covenant of good faith and fair dealing theories of recovery.
Settlement Discussions
The plaintiffs made a C.C.P. º998 settlement demand for $375,000, reduced to $275,000 at the mandatory settlement conference. At trial, the demand was raised to $925,000. The defendants made an offer to pay retained replacement cost benefits in exchange for a waiver of costs.
Damages
Claimed breach of contract damages included payment of retained depreciation of approximately $24,202.10 and additional living expenses of $2,000. Extra contractual damages of $200,000 demanded for Nancy Duncan's alleged severe emotional distress involving a major depressive episode.
Other Information
The verdict was reached approximately four years and one month after the case was filed. A settlement conference was held on July 5, 1996, before the Hon. James A. Edwards of the San Bernardino Superior Court. It did not resolve the matter. Through pre-trial motions in limine, State Farm precluded testimony from plaintiffs' claims handling expert, Ina Delong, on the basis that she was not qualified to express an opinion on insurance industry standards in the adjustment of losses. The trial court granted State Farm's nonsuit as to punitive damages. No appeal was filed and the time for filing an appeal has lapsed.
Deliberation
2+ hours
Poll
10-2
Length
16 days
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