Facts

Initially, plaintiff Amy McDaniel filed a lawsuit against Edward Murotani for the wrongful death of her husband who died while acting as a Good Samaritan when Murotani's vehicle caught fire. Morotani was found to be at fault and judgment was entered by Kern County Superior Court against Murotani, who is now deceased, in the amount of $3,367,741 on Aug. 16, 2011.

A second lawsuit was filed by McDaniel as the judgment creditor who sued Geico General Insurance Co. for breach of covenant of good faith and fair dealing and breach of contract. The parties agreed to have the matter heard by cross summary judgments.

PLAINTIFF'S CONTENTIONS:
Plaintiff alleged that Murotani purchased third party liability insurance coverage from defendant and such policy was in effect when Murotani was driving his car and it caught on fire. Plaintiff contended that Murotani was given an opportunity to settle for policy limits of 100,000. Plaintiff contended that Geico refused to settle on behalf of the insured that represented Murotani as well with staff counsel. The jury found Murotani 85 percent at fault and the judgment was for over $3 million. Plaintiff claimed that since Geico did not seek to have the judgment reduced the full amount was granted, and that the insurance company did not have the right at this stage of the litigation, and since it was not a party to the original lawsuit, it did not have standing to assert the offset in this litigation.

Plaintiff also argued that Murotani did consider the time to be running and that unverified responses was not the issue as far as "timing" of the offer was concerned since all parties treated the running of the time as starting where served. Plaintiff accused Geico of applying old law that would have insulated insurance companies against any judgment that exceeded the value of an insured's assets.

Plaintiff asserted that the lawsuit was a covered claim, that a reasonable offer to settle was made and that a monetary judgment was entered in excess of the policy.

DEFENDANT'S CONTENTIONS:
Defendant denied the allegations of plaintiff's claims and asserted various affirmative defenses. Defendant also argued that it was entitled to an offset for the amounts recovered by plaintiff pursuant to settlements with certain parties prior to the entry of plaintiff's state court judgment.

Geico argued that there should be an offset for the $565,000 previously paid by settling defendants. Geico argued that without the offset plaintiff would obtain an improper double recovery. Geico also claimed that the time never began on the offer since the discovery was not verified. Geico claimed that since the defendant Murotani had died in the interim that there was no basis for obtaining more than the policy as damages.

Result

After the court granted plaintiff's motion for summary judgment and denied defendant's motion for summary judgment, the court ordered entry of judgment for plaintiff. The court further found that damages received by plaintiff in her prior lawsuits were separate and distinct. Plaintiff was awarded judgment against defendant for $3,935,783.

Other Information

FILING DATE: Dec. 13, 2012.