Facts

Plaintiff Rod Thyberg insured a motorhome with total loss replacement coverage - $466,475 from 2005 to Oct. 2009. In May to June 2005, plaintiff advertised the motorhome for sale and found a buyer who would take over payments. The bank would not allow the payments to be assumed by a third party. Plaintiff and the third party signed an RV Purchase and Sale Agreement. A few weeks later, the third party drove the motorhome off a bridge and totaled it.

Plaintiff made a claim. Progressive reviewed the contract and thinking it a conditional sales agreement, asked for a coverage opinion. The recommendation was to file a DRA.

Plaintiff, however, sued for bad faith. Progressive did file a DRA in Riverside where the accident occurred and where the third party lived. Plaintiff lived in Orange County. Plaintiff counsel took the position the agreement was not a sale. Ultimately the issue of contract interpretation was submitted to Judge Solner in the bad faith case (the third party was in and out of bankruptcy, delaying the DRA in Riverside) and Judge Solner ruled the contract was an option and the policy defenses did not apply, thereby finding coverage.

After the June 2011 hearing, Progressive paid the total loss replacement, interest in the sum of $86,000 from DOL, $15,000 in costs, and $71,000 in liability claims (the driver damaged a bridge, a gas line and towing and storage was owed).

Plaintiff proceeded to trial on the bad faith claim, dismissing breach of contract (because all contract damages were paid) and intentional infliction of emotional distress.

DEFENDANT'S CONTENTIONS:
Progressive claimed it had never seen a contract like the RV Purchase and Sale agreement. It could have fit the lease exclusion; if a sale, the automatic termination provision would have voided the policy before the loss. It was reasonable to submit this question for legal interpretation.

Settlement Discussions

There were no settlement negotiations after the ruling by Judge Solner and Progressive's payment of all covered claims.

Damages

Plaintiff claimed attorney fees (Brandt) in the sum of $205,000 after allocation and emotional distress in six figures.

Result

Defense verdict.

Other Information

Mediation in Aug. 2010 was unavailing. Two mandatory settlement conference with Hon. Helen Bendix did not resolve the case. There was a Phase I trial June 2-3, 2011 that plaintiff won, and Progressive paid the total sum of $640,000. MEDIATOR: Robert J. Kaplan. FILING DATE: Nov. 6, 2009.

Deliberation

five hours

Poll

12-0 (delay - for plaintiff), 10-2 (reasonable - for Progressive)

Length

eight days