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CONFIDENTIAL

Feb. 20, 1999

Insurance
Breach of Contract
Failure to Pay

Confidential

Settlement –  $67,500

Court

USDC Central


Attorneys

Plaintiff

Michael R. Morales


Defendant

James R. Robie

Brian D. Huben
(Ballard Spahr LLP)

Maria Louise Cousineau


Facts

Plaintiff was and is the owner of a real property located in San Dimas. In March 1990, plaintiff purchased from defendant insurance company, a homeowner's insurance policy, that included replacement cost coverage for fire. The policy had an effective date of coverage of March 1990 through March 1991. The policy was subsequently renewed with effective dates of coverage of March 1995 through March 1996. The plaintiff was and is the named insured under the policy, which guaranteed that defendant insurance company would provide replacement cost coverage for losses and liabilities covered by the policy arising out of, inter alia, losses due to fire at the premises. On or about July 17, 1995, a fire occurred at the premises, substantially destroying the single family residence located thereon. The fire and losses incurred therein were promptly reported to defendant pursuant to the terms of the policy. Defendant acknowledged receipt of the claim and commenced an investigation under a reservation of rights, initially believing that the fire was due to arson. In April 1996, the plaintiff demanded the policy limits of the subject policy for the losses incurred by plaintiff in the fire, even though the home had not been rebuilt. The plaintiff demanded the policy limits based upon the following facts: one, the city of San Dimas, following the fire at the premises, notified plaintiff that the premises was damaged beyond repair, therefore uninhabitable, and was therefore required to be demolished and reconstructed in a new location on the premises. Two, that the City of San Dimas required the structure to be moved from the existing location, in conformance with the City of San Dimas Municipal Code set back requirements. The plaintiff claimed that in spite of the knowledge obtained by defendant insurance company, of the city of San Dimas' requirements and condemnation of the structure, the defendant only partially paid the claim. The plaintiff brought the suit against defendant insurance company on causes of action for breach of insurance contract and breach of implied covenant of good faith and fair dealing.

Settlement Discussions

The plaintiff made a C.C.P. º998 settlement demand for $_________. The defendant made a C.C.P. º998 offer of compromise for $_____________.

Other Information

The settlement was reached approximately ___years and ___ months after the case was filed. A settlement conference/arbitration/mediation was held on _____/_____/19_____ before______(name) of___________(affiliation) resulting in ________. Please describe any significant legal/procedural issues which help explain the outcome:_____________.


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