Confidential
Settlement – $350,000Judge
Court
Sonoma Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Lawrence Bernheim
(technical)
Robert Quinn
(technical)
Facts
The plaintiffs in this case were sued in an underlying action for property damage arising from construction
activities. Defendant insurance company allegedly refused to defend the plaintiffs on the basis that the damage
began to occur prior to the policy period.
The plaintiffs suffered a total of $24,500 in damages, consisting of $6,300 in attorneysÆ fees to defendant the
underlying action and $18,200 to settle the case. The plaintiffs obtained an order granting summary
adjudication on defendantÆs duty to defend them against the underlying action.
Through discovery, it was allegedly uncovered that the defendant had performed no investigation and had
ignored certain critical facts and terms of the policies.
The defendant had also allegedly delayed in responding to communications from the plaintiffs and failed to
accept or make reasonable settlement offers. The plaintiffs attempted to settle the case at the outset for $18,000
pursuant to C.C.P. Section 998.
Throughout the case, the plaintiffs provided additional written settlement demands of $50,000, $60,000 and
$90,000, but none were accepted. The defendant made no written offers until just prior to the settlement
conference, when it offered $75,000.
Settlement Discussions
According to the plaintiff: Shortly after filing the complaint, the plaintiffs offered to settle the case pursuant to C.C.P. Section 998 for $18,000. Throughout the case, the plaintiffs provided additional written settlement demands of $50,000, $60,000 and $90,000, but none were accepted. The defendants served a C.C.P. Section 998 10 days before trial for $75,000. The case settled for $350,000 in the middle of trial. According to the defendant: Settlement discussions were initiated only after the court ruled that C.C.P. Section 998 offers made to resolve the plaintiffÆs bad faith suit were admissible as further evidence of the defendantÆs bad faith; that all fees incurred by the plaintiff, not just those incurred to pursue a policy benefit, were admissible as evidence of the defendantÆs bad faith; that the investigation and other pretrial activity undertaken by the defendantÆs counsel was admissible in evidence to demonstrate what activity the defendant should have conducted at the time of initial tender; and that the plaintiff would not be required to prove that monies spent in settlement of the underlying action were in fact covered under the policy but that the plaintiff was entitled to their recovery on a tort theory.
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