Facts

On Oct. 22, 2007, Michael and Sydney Van Zees' (the Van Zees) home was destroyed by a severe wildfire in North San Diego County. Within days of the fire the Van Zees submitted a claim to their insurance company, Homesite.

After submitting their claim,the Van Zees requested a copy of their insurance policy, as their copy had been destroyed in the fire. Plaintiffs contend that for almost one year Homesite failed to provide the Van Zees with a complete copy of their policy, including all endorsements. Defendants contend that Homesite repeatedly provided copies of the replacement cost endorsement to the Van Zees, which defendants contend they were aware of at all times.

According to the plaintiffs, the Van Zees were unaware they had purchased guaranteed replacement cost coverage prior to the fire. Defendants contend that the Van Zees were aware of this coverage, and that they acknowledged this awareness. This coverage provided that if there was a loss to the dwelling in excess of the Coverage A limit of $248,000, then Homesite would increase the Coverage A limit of liability to equal the current replacement cost of the dwelling and adjust the other coverages accordingly. Plaintiffs contend that, for almost one year, Homesite failed to explain and disclose this coverage to the Van Zees, despite the fact that every estimate Homesite had calculated and received exceeded the stated policy limits of $248,000. Defendants dispute this contention.

During this same time, Homesite repeatedly represented to the Van Zees that their claim was capped at the $248,000 stated limit of liability. However, in Jan. 2009, fifteen months after the fire, Homesite changed its position and paid benefits in excess of the stated policy limits up to its' own contractor estimate, without admitting liability.

The Van Zees sued Homesite for breach of the implied covenant of good faith and fair dealing. The Van Zees asserted that Homesite misrepresented its coverage for over one year and unreasonably and in bad faith failed to pay full benefits owing under the policy. Plaintiffs also sought punitive damages claiming that Homesite's conduct constituted malice, oppression and/or fraud.

Result

The jury awarded plaintiffs $111,260 in property damage, which defendants contend will be eliminated by a set formula based on their settlement with third party tortfeasor San Diego Gas and Electric. The jury awarded plaintiffs $20,000 in emotional distress damages. The jury also awarded plaintiffs $3,200,000 in punitive damages. Plaintiffs' claim for fees under Brandt v. Superior Court has been reserved and will be decided post trial.