Confidential
Settlement – $1,036,420Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
John P. Blumberg
(Blumberg Law Corp.)
Defendant
Experts
Plaintiff
Ruth M. Chow
(technical)
James Nelson
(technical)
Defendant
Harry W.R. Chamberlain II
(technical)
Facts
On Dec. 24, 1986, the plaintiff was injured in a collision with a truck operated by the defendant insurance
company's policyholder. The policyholder was insured with a $1,000,000 policy issued by the defendant. The
plaintiff sued the insured, but shortly thereafter the insured filed for bankruptcy. This bankruptcy filing delayed
the lawsuit, but on June 5, 1997, the plaintiff obtained a judgment in the amount of $76,033.
By this time, the insured ceased to be in business. The plaintiff submitted a demand to the defendant insurer to
pay on the judgment. The defendant's claims manager stated that he would determine the defendant's
obligation to settle the judgment. However, thereafter he never admitted or denied the claim or provided any
reason for his inaction.
In March 2000, the plaintiff filed a lawsuit for breach of contract and bad faith.
The plaintiff claimed that after the lawsuit was filed, the insurance company claimed for the first
time that (1) the policy was lost and its terms were unknown, and (2) that it believed the lost
policy had a $100,000 deductible or self insured retention negating any obligation by the
defendant to pay.
Settlement Discussions
In July, 2002, at a mediation the defendant agreed to pay an additional $913,576 for a total settlement of $1,036,423. In all, there were three mediation sessions. The first resulted in the payment of the judgment, and the second was unsuccessful. The third mediation resulted in the final settlement.
Damages
Attorney's fees and costs to collect the judgment through litigation, emotional distress, loss of use of money.
Result
Shortly after the claims manager's deposition, the defendant paid the judgment plus accrued interest, amounting to $112,871. In May, 2002, the defendant tendered payment of $9,975, comprising the attorney fees and costs incurred by the plaintiff in obtaining payment of the judgment. The defendant insurance company also offered to settle the remaining issues in the case.
Other Information
According to the plaintiff, the 1986 Federal Motor Carriers Act requires that any insurance policy issued to an interstate trucking company contain an endorsement with language acknowledging that the insurance company will pay the entire judgment obtained against its insured regardless of any deductible or the bankruptcy of the insured. The plaintiff claimed that during his February 2002 deposition, the defendant's claims manager denied knowledge of the regulation but produced a portion of the policy that he had obtained from the re-insurer which included the required endorsement.
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