Confidential
Settlement – $880,000Judge
Court
Orange Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Wayne Comport
(technical)
Defendant
Harold C. Cox
(technical)
Facts
In 1988, the plaintiff manufacturer was sued for strict products liability, breach of warranty, negligence, spoliation of evidence, and negligent infliction of emotional distress. The manufacturer tendered the case to its product liability carrier, who defended the action. Shortly before trial, the manufacturer brought a motion for summary judgment and summary adjudication of issues. The summary judgment was denied but the court granted partial adjudication of issues, which eliminated the strict products liability and warranty causes of action. Since it had then become apparent that the plaintiffs in the underlying action were proceeding on a negligence theory and not a products liabilty theory, the manufacturer immediately notified the defendant insurance company, which had issued a commercial general liability policy. The defendant insurance company refused to attend any settlement conferences or to attempt to settle the matter and, shortly before trial, denied coverage and refused to defend the action. The plaintiff claimed that at that time, the case could have been settled within its policy limits. In the midst of the trial, the manufacturer agreed to pay the underlying plaintiffs the sum of $120,000 and assigned its claims against the insurance company in exchange for a covenant not to execute. The policy had limits of $1 million. Part of the agreement included a stipulation by the manufacturer to liability but not to damages. The jury was waived and the trial was continued before the trial judge, who assessed damages and rendered judgment in the amount of $4,314,566. The manufacturer's defense attorney attended the hearing on damages, but did not participate. The defendant insurance company refused to pay the judgment and this action followed. The plaintiff manufacturer brought this action against the defendant, its commercial general liability insurer, based on insurance bad faith, breach of contract and negligence theories of recovery.
Settlement Discussions
The plaintiff made a C.C.P. º998 settlement demand for $2 million. The defendant made no statutory offer.
Damages
The plaintiff sought $900,000 in damages.
Other Information
The settlement was reached approximately one year and four months after the case was filed. MEDIATION: A mediation was held in Dec. 5, 1996 before Judge Bonnie Martin, retired of JAMS/Endispute resulting in the reported settlement.
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