Skyline Schools, Inc. v. Bridge-Norena & Associates
Published: Sep. 4, 1999 | Result Date: Jul. 28, 1999 | Filing Date: Jan. 1, 1900 |Case number: BC188043 Verdict – $0
Judge
Court
L.A. Superior Central
Attorneys
Plaintiff
Alfred J. Landegger
(Landegger, Verano & Davis ALC)
Defendant
Experts
Defendant
Ronald Anderson
(technical)
Facts
In 1996, plaintiff Skyline Schools Inc, a Laguna Niguel preschool, Saul Levi was a shareholder and consultant to plaintiff. For over 15 years, Levi had procured package commercial general liability policies for the schools from defendant Bridge-Norena & Associates Insurance Agency. Levi claimed that the defendant agency told him the commercial general liability policies he was buying from Fireman's Fund in 1995, 1996 and 1997 covered employment practices liability. They did not. However, those policies had no express exclusion of employment practices liability. Levi claimed that in 1995, 1996 and 1997, defendant Martha Norena stated, regarding employment practices liability, "it's not excluded, so it's covered." Levi claimed that in 1994, defendant Martha Norena, a principal of the agency, expressly informed him that the CIGNA comercial general liability policy excluded employment practices, but when the insurance carrier changed to Fireman's Fund, she did not inform him that they were not covered. The plaintiff also claimed it paid more in 1996 and 1997 because Levi was told the policies for those years covered employment practices. The defendants claimed such representations were never made. On Sept. 22, 1997, an employee of the plaintiff filed a complaint against the plaintiff for various causes of action arising out of her employment with the plaintiff. Fireman's Fund denied the plaintiff's claim for defense and indemnity under the general liability policy citing the claim was not covered under the policy; the claim was not for bodily injury, property damage, personal injury or advertising injury and other exclusions including a workers's compensation' exclusion (but there was no express employment practices exclusion). In January 1999, after summary adjudication, the employee's case settled. Legal fees and indemnity incurred by the school were approximately $100,500. The plaintiff brought this action against the defendant insurance agency and its president for negligent misrepresentation and breach of fiduciary duty, later adding fraudulent inducement and fraudulent concealment causes of action. The plaintiff argued it was induced to purchase the policies based on the defendants' intentionally false representations to Levi that the policies covered employment practices liability. The plaintiff contended that the defendants concealed that they had an exclusive program with Fireman's Fund and were not competing on the commercial general liability policies, and further concealed, in order to keep the plaintiff's business, that other employment claims had been tendered to Fireman's Fund and denied under the liability policies. The plaintiff contended that the defendants had incentive and motive to lie to the plaintiff, as the plaintiff's six schools were a profitable account which the defendants needed in order to retain the agency appointment with Fireman's Fund. The defendants contended that the plaintiff had other insurance brokers procuring other insurance and making proposals for the plaintiff's business; and that the plaintiff created a competitive environment in which the premium was the focus. Defense expert Ronald Anderson testified that commercial general liability policies do not generally cover employment related practices.
Settlement Discussions
The plaintiff made a settlement demand for $100,000, reduced to $60,000 before trial. The defendant made a C.C.P. º 998 offer of compromise for $1.
Damages
The plaintiff sought $100,500 in compensatory damages, plus punitive damages.
Other Information
The verdict was reached approximately one year and four months after the case was filed. A court-ordered mediation was held on May 25, 1999, before Steven Sauer, resulting in no settlement. The original complaint, filed in March 1998, alleged negligent misrepresentation and breach of fiduciary duty. Discovery proceeded and trial was set for June 30, 1999. On May 14, 1999, the plaintiff amended the complaint to add causes of action for fraudulent inducement and fraudulent concealment and to add a prayer for punitive damages. Trial commenced July 19, closely adhering to the original trial date.
Deliberation
81/2 hours
Length
eight days
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