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CONFIDENTIAL

Nov. 1, 1997

Insurance
Bad Faith
Denial Of Coverage

Confidential

Settlement –  $835,000

Judge

Daniel A. Curry

Court

L.A. Superior Central


Attorneys

Plaintiff

Daniel J. Callahan
(Callahan & Blaine)

Michael J. Sachs


Defendant

Kurt C. Peterson
(Reed Smith LLP)

Lorenzo E. Gasparetti
(Reed Smith LLP)


Facts

The plaintiff owns four apartment buildings that were damaged in the Northridge earthquake. After the earthquake, plaintiff made insurance claims for the damage. He claimed the insurer initially gave him "lowball" estimates. When the plaintiff later discovered further damage, defendant insurer refused to reopen the claim based on a one year contractual limitation period. Defendant insurer eventually reopened the claim but denied coverage based on the limitations period. Based on the low estimates, delay and denial of the claim, on what plaintiff contended was improper grounds, plaintiff brought this action against the defendant insurer for breach of contract and breach of the covenant of good faith and fair dealing.

Settlement Discussions

Settlement discussions were not disclosed.

Damages

The insured suffered $408,476 in property damage, plus emotional distress and attorney fees.

Other Information

The settlement was reached approximately five months after the case was filed.


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