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CONFIDENTIAL

May 16, 1998

Insurance
Bad Faith
Failure to Defend

Confidential

Settlement –  $4,300,000

Judge

Vincent P. DiFiglia

Mediator

Howard B. Weiner

Court

San Diego Superior


Attorneys

Plaintiff

Jonathan R. Flora

Donald P. Tremblay
(Tremblay Beck Law)

Peter Q. Schluederberg
(Tremblay Beck Law)

J. Daniel Holsenback


Defendant

Edward D. Chapin
(Sanford Heisler Sharp LLP)

Lawrence W. Shea

Kelli Brooks


Experts

Plaintiff

Douglas F. Walters
(Law Office of Douglas F. Walters, APC) (technical)

Paul Hamilton
(technical)

Defendant

Scott M. Kolod
(technical)

Gene P. Irizarry
(technical)

Facts

The plaintiffs in this case, a development company previously sued the insured of the defendant insurance company. In that underlying lawsuit in 1995, the defendant insurance company withdrew all defense benefits to its insureds one month prior to trial. The insureds then assigned all bad faith to the original plaintiffs who filed and served this bad faith lawsuit in April 1996. The plaintiffs made a claim on their policy for defense of a construction defect case. Based on the assignment of the insureds' rights, the plaintiffs brought this action against the defendant based on breach of contract and bad faith theories of recovery.

Settlement Discussions

Per the plaintiff, the plaintiff made a C.C.P. º998 settlement demand for $6,500,000. Per the plaintiff, the defendant made a C.C.P. º998 offer of compromise for $2,000,000.

Damages

Per the plaintiff, the plaintiffs claimed $7,800,000. Per the defendant, the plaintiff claimed $40 million.

Other Information

Two mediations were held and the case settled on April 2, 1998, before Justice Howard B. Weiner, retired, resulting in the reported settlement.


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