Darryl Drummond v. Golden Eagle Insurance Company
Published: Jun. 25, 1994 | Result Date: Mar. 10, 1994 | Filing Date: Jan. 1, 1900 |Case number: 658827 – $2,205,050
Judge
Court
San Diego Superior
Attorneys
Plaintiff
Defendant
Randall L. Brownwood
(Santa Cruz, Brownwood & Cannon)
Experts
Plaintiff
Jeff Michaelson
(technical)
Defendant
Boyd Veansira
(technical)
Facts
This instant case was an insurance bad faith claim which arose out of an underlying accountant's professional negligence action. Darryl Drummond was a CPA in private practice in San Diego. In January of 1990, he obtained a Professional Errors and Omissions policy with Golden Eagle Insurance Company. It was a $50,000 diminishing limits policy made effective January 10, 1989. The policy had multiple exclusions for professional activities which took place before the retroactive date. Drummond performed professional services for Melvin Gorham beginning in 1986. The relationship became increasingly strained. After a series of hostile letters, Gorham terminated Drummond (in writing) on November 28, 1988. Gorham later sued Drummond for professional negligence in February of 1991. The complaint generally alleged that Drummond worked for Gorham from 1986 through 1988; the complaint also generally alleged ongoing damages. Golden Eagle's "claims handling specialist," Claire Cortessio, received the complaint, reviewed the policy, and decided there was no coverage because "all the professional activities occurred prior to the policy period," which began January 10, 1989. She drafted a denial letter regarding both indemnity and defense, confirming with her superiors that the claim should be denied. Allegedly, Golden Eagle did not conduct an investigation before denying this claim. A policy limits demand was later sent to Golden Eagle which was also denied. In the underlying law suit, Drummond initially retained an attorney and later went through nearly one year of litigation in propria persona; he failed to appear at trial; and a default judgment was entered against him in the amount of $1,955,000 on December 10, 1991. Plaintiff Darryl Drummond then filed the instant insurance bad faith cause of action against Defendant Golden Eagle Insurance Company.
Settlement Discussions
Plaintiff contends no offers or demands were exchanged.
Damages
$1,950,000 judgment; statutory interest from December 10, 1991; and emotional distress damages.
Injuries
Emotional distress.
Deliberation
6 hours
Poll
10-2
Length
7 days
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