Confidential
Settlement – $500,000Facts
The plaintiff purchased an automobile first party and liability policy from defendant insurance company for his
personal vehicle. The selling broker told the plaintiff coverage would take effect immediately. Several days
after purchasing the coverage, the plaintiff was involved in an accident, for which he was liable. He rear-ended
a third party vehicle, totaling the claimant car and injuring the occupants. The plaintiffÆs car was also
damaged.
The plaintiff tendered the claim to the defendant insurance company, which denied coverage on the ground that
the policy did not go into effect until two days after the accident, because they did not receive the application
and check in the mail until after the accident. The carrier refused to defend the claim and refused to repair the
insuredÆs vehicle.
The third party claimants did not actually sue the insured until eight months after the accident, by which time,
this bad faith suit against the carrier was already pending. At that time, the insurance company finally agreed
to paid to repair the insured vehicle, back-date the policy and settle the underlying third party action, but did
not settle the claim of bad faith delay and claims handling and emotional distress.
Settlement Discussions
The plaintiff made a C.C.P. Section 998 demand for $350,000, which expired. The defendants made a C.C.P. Section 998 offer for $75,000, which expired.
Damages
$1,680 (loss of use of vehicle); $1,988 (attorney fees to defense third party claim); $13,106 (attorney fees to get carrier to accept coverage); $430 (interest on contract benefits)
Other Information
<M>The case was settled two years after it was filed. The mediation before George Dell, retired, took place weeks after the jury trial was supposed to begin. The Second District Dourt of Appeal stayed the trial just three days before jury selection, granting a writ on a discovery order. The stay was lifted days after the settlement.</M>
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