Confidential
Settlement – $140,000Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
John P. McKay
(technical)
Defendant
Jerry A. Ramsey
(technical)
Facts
On Aug. 15, 1994, the plaintiff, a 41-year-old man, was in the course and scope of employment, operating a water truck when it collided with another vehicle driven by a woman who suffered serious injuries. The woman later sued the plaintiff and his employer in the underlying case. The defendant insurance company refused to defend the case on the basis that the water truck was not "mobile equipment" but an "automobile", and therefore, not covered under the employer's general liability policy. Plaintiff's employer, an excavation and land cleaning company, did not have an auto policy covering the vehicle. The plaintiff was originally represented by an attorney who pointed out that the water truck was mobile equipment. The plaintiff claimed the defendant insurance company refused to defend for nine months and only agreed to defend three months before trial. Defendant agreed to defend under a reservation of rights. The underlying case settled for $1.3 million within four months of the carrier's acceptance of defense. The plaintiff brought this action against the defendant insurance based on a bad faith theory of recovery.
Settlement Discussions
The plaintiff made a C.C.P. º998 settlement demand for $300,000. The defendant made no offer.
Damages
The plaintiff claimed the employer had to pay attorney's fees for the plaintiff in lieu of paying his salary and he was out of pocket in the amount of $25,000. The plaintiff also claimed to suffer emotional distress, financial hardship, depression and increase in high blood pressure.
Other Information
The settlement was reached approximately one year and five months after the case was filed. A settlement conference was held before Michael Rutberg, (Ret.), resulting in the reported settlement. Plaintiff reported a deposition of corporate counsel was taken, wherein he conceded basic principles that all doubts regarding coverage would be resolved in favor of the insured and also greater duty to defend. Defendant claimed corporate counsel conceded at deposition that the single case in the country regarding coverage could be resolved in favor of either side. The consolidated case of plaintiff's employer against defendant was not settled and remains open.
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