Confidential
Settlement – $75,000Court
L.A. Superior Santa Monica
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
Everette Lee Herndon Jr.
(technical)
Defendant
William M. Samoska
(technical)
Dave F. Lordon
(technical)
Facts
Plaintiff's 18-year-old daughter was returning home from her first weekend away at college in September 1995, riding as a passenger in a vehicle driven by a college friend. The driver lost control of the vehicle, which turned over multiple times, resulting in the death of the plaintiff's daughter. Both mother and daughter were insured under the defendant's policy which provided $50,000 in benefits for injuries or death caused by an unisured motorist, and $5,000 in medical payment benefits, including burial expenses. The lawyer for the daughter's estate made a claim for the $50,000, after having been informed thar the policy covering the car in which the daughter was riding had been cancelled for non-payment of premium several months prior to the accident. The defendant insurer, however, became aware of information allegedly indicating that the other insurance policy had not been cancelled in accordance with the California Insurance Code. Counsel for the estate subsequently submitted certificates from the Department of Motor vehicles indicating that there was no insurance for the vehicle in which the daughter had been riding. The defendant insurer resquested that the estate clarify whether it was pursuing an "underinsured" or an "unisured" motorist claim, and also inquired as to what steps the estate representatives were taking to establish that there was no insurance on the car in which the daughter was riding. In December 1995, the estate's representatives confirmed it was making an "uninsured" motorist claim, and that the estate, in light of the DMV certificates, did not intend to take any steps to investigate whether any insurance policy covering the car in which the daughter was riding had either been in existence previously, or had been properly cancelled. Defendant insurer then retained outside counsel to investigate the circumstances concerning the cancellation of the insurance policy which it contended potentially covered the vehicle in which the daughter had been riding. The estate, meanwhile, demanded arbitration of the unisured motorist claim, and filed a motion to compel arbitration when the defendant insurer requested that its outside counsel be allowed to complete its investigation before any arbitration was scheduled. Counsel for the insurer was taking steps to depose the custodian of records of the carrier for the driver, as well as the broker, to establish whether a liability policy was in force and effect once it became clear that the plaintiff's attorney would take no further steps to investigate the matter. Immediatley prior to the arbitration scheduled for June 1996, the defendant insurer tendered the $50,000 policy, but did not tender the $5,000 in medical benefits payable towards burial expenses. After extensive negotiations, the entire claim was settled and a release signed by the plaintiff and the estate for the total sum of $50,000. In August 1997, the plaintiff, with separate counsel, filed this action on behalf of herself and the estate for breach of contract and bad faith alleging that the defendant insurer had breached the policy by not tendering the $50,000 policy limits in December 1995, and by not tendering the $5,000 medical payments, and breached the implied covenant of good faith and fair dealing by delaying its tender of the $50,000 until June 1996, without proper cause. The plaintiff brought this action against the defendant based on intentional tort theories of recovery.
Settlement Discussions
The plaintiff made a C.C.P. º 998 settlement demand for $149,000. The defendant made a C.C.P. º 998 offer of compromise for $5,000, raised to $15,000 immediately after filing.
Injuries
The plaintiff claimed emotional distress and economic loss due to the defendant's six months delay in payments of $50,000 unisured motorist benefits payable for death of an 18-year-old decedent.
Other Information
The settlement was reached approximately one year and three months after the case was filed. A voluntary settlement conference was held on Oct. 23, 1998, before Robert London of JAMS, resulting in no settlement. The plaintiff argued that because the vehicle code created a rebuttable presumption that the daughter's vehicle was without insurance, once the DMV certificates had been submitted, it was bad faith for the defendant insures to require the daughter's estate to establish the lack of insurance on the vehicle.
For reprint rights or to order a copy of your photo:
Email
jeremy@reprintpros.com
for prices.
Direct dial: 949-702-5390