Facts

Plaintiffs sued for breach of contract and bad faith on a claim arising out of a house fire at their 80-year-old home in Porterville, California. Although they had been paid over $232,000 on all coverages (including $107,000, less deductible, for damages to the structure itself), plaintiffs sought unspecified additional damages with respect to the repairs to their fireplace, roof, electrical system, floors, and various other areas. The jury answered "yes," to the second question on the verdict form, asking whether the plaintiffs had made material misrepresentations of fact in making their claim. The evidence put on by defendant Allstate suggested the plaintiffs misrepresented that they were residing in the house at the time of the fire in order to collect additional living expenses, which Allstate did, in fact, pay ($24,000). The jury's decision on Question 2 rendered moot both the breach of contract cause of action and the bad faith cause of action.

PLAINTIFFS' CONTENTIONS:
Plaintiffs claimed Allstate had wrongfully declined to pay for a new fireplace and chimney, had paid too little to repair damage to the floors throughout the house, had failed to pay to replace the entire electrical system, and had failed to pay for repairs to the floors necessitated by an alleged failure of the contractor, Jacobs Construction, to secure the house from rain intrusion during the course of repairs. They asked the jury for unspecified additional benefits, attorney fees, and punitive damages.

DEFENDANT'S CONTENTIONS:
Allstate contended that the plaintiffs were not owed additional sums and, moreover, that plaintiffs had made material misrepresentations of fact in connection with their claim for additional living expenses.

Settlement Discussions

The MSC was conducted by the trial judge after Jacobs Construction settled out, but without success. Plaintiffs' demand was officially at $325,000; defendant Allstate offered $25,000. Allstate made a C.C.P. section 998 offer for $10,000.

Result

Verdict for the defendant.

Other Information

The case was mediated before Thomas Simonian, Esq. (Visalia) without success. However, defendant Jacobs Construction succeeded in resolving its claims against the plaintiffs, and theirs against it, through the mediation before Attorney Simonian. EXPERT TESTIMONY: Robert Sharp, plaintiff's Insurance Expert, testified that Allstate breached its covenant of good faith and fair dealing by delaying settlement and by failing to pay all amounts due. Boyd Veenstra, defendant's insurance expert, testified that Allstate observed all applicable standards for prompt and fair claims handling and withheld no benefits otherwise due plaintiffs. FILING DATE: Feb. 7, 2008.

Deliberation

1.5 hours

Poll

12-0 (misrepresentations)

Length

six days