Confidential
Settlement – $1,500,000Judge
Court
Fresno Superior
Attorneys
Plaintiff
Nicholas J.P. Wagner
(Wagner, Jones, Kopfman & Artenian LLP)
Defendant
Experts
Plaintiff
Robert Quinn
(technical)
Defendant
Larry Lossing
(technical)
Robert Blak
(medical)
Gilbert J. Malmgren
(technical)
Facts
On April 22, 1997, plaintiff Roberta Lawson's 14-year-old son set a fire that resulted in approximately $150,000 in damage to their Coalinga residence and their property. At the time of the fire, the plaintiff's son was receiving therapy and was taking medication for depression. She made a claim to CalFarm Insurance, which denied her claim based on an exclusion in the policy that specifically excluded coverage for losses caused by the intentional acts of "an insured" (California Civil Code section 533). The plaintiff's son was an insured under the policy because he was family member of the household. Lawson sued CalFarm Insurance, Des Moines, Iowa, alleging breach of contract and bad faith. She contended that, according to the definitions of the word "insured", in the CalFarm policy, Lawson and her father, Charles Rowan, were the named insureds. She added that the policy also defined an insured as any person living in the home under the age of 21. Based upon this policy definition, CalFarm asserted plaintiff's son was 'an' insured under the policy and the intentional acts exclusion of the policy was a bar to recovery under the policy. The plaintiff claimed that the inclusion of her son as an insured was invalid under California Insurance Code sections 2070, 2071, and 533. Specifically, Insurance Code section 2071 set forth a standard form of fire policy that must be used by an insurer when providing coverage against the peril of fire. Additionally, the plaintiff contended that Insurance Code section 2070 states that all insurers who insure against loss caused by fire just use the language in the standard form fire policy and may deviate from such language only if such deviation results in coverage for the insured that is equal to or better that the coverage afforded by the standard form fire policy. The plaintiff maintained that the standard form fire policy under Insurance Code section 2071 do not have exclusions for the intentional conduct of an insured. She argued that since the CalFarm exclusion in question excluded coverage for the intentional acts of an insured and CalFarm was attempting to enforce it to exclude coverage to plaintiff for the intentional conduct of her son, such policy language resulted in coverage to plaintiff that was not as favorable as the language of the standard form fire policy. Therefore, the plaintiff contended that the CalFarm policy exclusion for loss caused by the intentional conduct of her son, an insured, was invalid. CalFarm contended the exclusion for the intentional acts of an insured complied with California Insurance Code section 533 and there was no coverage for plaintiff and Charles Rowan. It also argued that no court had ever held the subject exclusion to be invalid and that appellate authority supported its position. In Phase I of a bifurcated trial, Judge Donald Black ruled that the intentional act exclusion did not bar the named insured, Roberta Lawson and Charles Rowan, from collecting the insurance policy benefits for the fire caused by her son. The case settled at the start of Phase II (bad faith phase) of the bifurcated trial.
Damages
The fire caused approximately $150,000 in damage to the house and its contents.
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