This is the property of the Daily Journal Corporation and fully protected by copyright. It is made available only to Daily Journal subscribers for personal or collaborative purposes and may not be distributed, reproduced, modified, stored or transferred without written permission. Please click "Reprint" to order presentation-ready copies to distribute to clients or use in commercial marketing materials or for permission to post on a website. and copyright (showing year of publication) at the bottom.

Insurance
Bad Faith
Failure to Investigate

Atlas Mill Supply, Inc. v. State Compensation Insurance Fund

Published: Aug. 17, 1996 | Result Date: Jul. 19, 1996 | Filing Date: Jan. 1, 1900 |

Case number: BC108421 –  $0

Judge

Ronald M. Sohigian

Court

L.A. Superior Central


Attorneys

Plaintiff

Lloyd Kirschbaum
(Law Offices of Lloyd Kirschbaum)

Barry L. Kramer


Defendant

Jim Burgess

Kathleen Ratz

Fred R. Puglisi
(Sheppard, Mullin, Richter & Hampton LLP)


Experts

Plaintiff

Arthur Joel Levine
(technical)

John Buckley
(technical)

Dennis Knotts
(technical)

Defendant

Robert Hollingshead
(technical)

David O'Brien
(technical)

Facts

The plaintiff, Atlas Mill Supply, Inc., a clothing recycler which purchases used clothing and either resells the material overseas or cuts the clothing into industrial wiping rags, purchased workers' compensation insurance from the defendant, State Compensation Insurance Fund, beginning in the mid-1960s until July 1, 1990. During the last five policy years, the plaintiff's employees suffered over 220 injuries, including many finger lacerations from the cutting machines and back strains from lifting and pushing clothing bales weighing up to 1,000 pounds. The defendant covered each claim made by the plaintiff's employees and paid 94 percent of the premium it collected from the plaintiff to the plaintiff's employees in the form of benefits. The plaintiff brought this action against the defendant based on breach of the duty of good faith and fair dealing and negligence theories of recovery.

Settlement Discussions

The plaintiff made a settlement demand for $200,000, increased to $250,000 after the defendant's motion for partial nonsuit was granted. The defendant made a settlement offer of $10,000.

Damages

The plaintiff claimed $313,143 in damages resulting from the alleged increase in premiums paid during the 1990 through 1993 policy years and the alleged decrease in dividends paid by the defendant for the 1989 policy year. The plaintiff also sought punitive damages.

Other Information

The verdict was reached approximately two years after the case was filed. The trial court granted the defendant's motion for partial nonsuit on the plaintiff's claim for punitive damages and on its claim for negligence.

Deliberation

2 days

Poll

12-0

Length

30 days


#122722

For reprint rights or to order a copy of your photo:

Email jeremy@reprintpros.com for prices.
Direct dial: 949-702-5390