Facts

Shaun Salas's 1993 Honda Prelude was insured by Mercury Insurance Group (Mercury). For a period of time, however, Shaun Salas was driving his father Gilbert Salas' 2006 Toyota Tundra because the brakes had failed on his Prelude. Although the Tundra was insured with the Interinsurance Exchange of the Automobile Club, Shaun Salas was excluded from coverage under that policy. On May 5, 2007, Shaun Salas had a collision with Theresa Nguyen, who was driving a 2007 Toyota Corolla. Nguyen's insurer, Wawanesa Mutual Insurance Company, sued Shaun and Gilbert Salas for reimbursement of the insurance benefits paid to Nguyen. The parties stipulated to the fact that the underlying claim was valued at $15,000. Mercury refused to provide for Shaun Salas' defense. Shaun Salas sued Mercury for tortuous breach of contract.

PLAINTIFF'S CONTENTIONS:
Shaun Salas claimed that Mercury denied any coverage for the collision and refused to defend him in the subsequent lawsuit. Shaun Salas claimed that the denial was improper and a breach of their contract because he was not a "resident" of Gilbert Salas' home. Shaun Salas claimed that he lived in a separate home behind his parents' house.

DEFENDANT'S CONTENTIONS:
Mercury claimed that the denial was proper because the policy excluded coverage if a "resident" was operating the insured car.

Result

The court found in favor of Shaun Salas, awarding him $15,000 for the stipulated settlement value, $10,500 for the stipulated cost of defense, and $750 for the stipulated litigation expenses. However, the court granted Mercury's motion for summary adjudication on the issue of tort damages. Salas' appeal is pending.

Other Information

FILING DATE: Feb. 8, 2008.