Confidential
Settlement – $2,224,000Court
L.A. Superior Santa Monica
Attorneys
Plaintiff
Defendant
Jean M. Lawler
(Lawler ADR Services, LLC)
Russell S. Wollman
(Murchison & Cumming LLP)
Experts
Plaintiff
Donald L. Hall
(technical)
Scott Sanders
(technical)
George M. Lesley
(technical)
George M. Dell
(technical)
Kathy Shannon Malmfeldt
(technical)
Facts
On September 25, 1991, Plaintiff developer/insured was served with a construction-defect lawsuit by a homeowners association. Plaintiff tendered the claim to Defendant insurance carrier in December of 1991. Defendant submitted to coverage counsel for review. One year later, on December 3, 1992, Plaintiff, not having a response to tender, sued Defendant for bad faith and fraud. On March 24, 1993 Defendant carrier agreed to defend the case under reservation of rights. Plaintiff was subsequently dismissed from the case without paying any money to the homeowners association and within 2 to 3 weeks of the reservation letter, but did not advise the insurer of the fact of no payment for dismissal. Legal bills for defense costs and fees of approximately $325,000 were submitted for payment. Pursuant to discussions between counsel, certain fees and costs were disputed. Insurer made payment of approximately $220,000 nearly 10 months after submission of bills with an additional $4,000 paid the following month. Certain amounts remained disputed.
Settlement Discussions
Defendant contends its initial offer was $650,000 and Plaintiff's initial demand was $3,300,000 reduced to $2,000,000.
Damages
Unpaid legal fees and costs for defense; alleged reduced recovery from underlying suit due to failure to pay moneys promptly; unspecified interest; emotional distress by individual Plaintiff and extra-contractual damages for bad faith.
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