Case details
Plaintiffs claimed insurers had duty to defend
SUMMARY
$700000
Amount
Mediated Settlement
Result type
Not present
Ruling
KEYWORDS
emotional distress
FACTS
In 2007, ACN Construction Inc., a contractor, was sued by Mayer Beverly Park LP, a landowner and apartment operator, for alleged construction defects in a large renovation project. The underlying matter against ACN was arbitrated, and Mayer Beverly Park LP was awarded $939,577.20 in damages. An uncontested judgment was subsequently entered against ACN for $939,577.20. However, ACN claimed it was unable to pay its attorney fees. As a result, ACN assigned its rights to assert bad-faith and failure-to-defend claims against its insurers to Mayer Beverly Park as part of a post-trial settlement agreement. In return, Mayer Beverly Park agreed to a covenant not to execute, in that Mayer agreed not enforce the money judgment against ACN. In 2010, Mayer Beverly Park, on behalf of ACN, William Martin, and OP Property Management LP, sued ACN’s insurer and its affiliates, United National Insurance Co., United National Casualty Insurance Co., United National Specialty Insurance Co., American Insurance Adjustment Agency Inc., American Insurance Service Inc., Diamond State Insurance Co., Global Indemnity Group Inc., and Penn-America Insurance Co. Mayer Beverly Park (and ACN) alleged that there was potential for coverage in the underlying case and that ACN’s insurer, United National Insurance Co. (and its affiliates), had a duty to defend, but failed to do so. Martin was listed as a nominal defendant in the case. Counsel for the insurance carriers contended that United National owed no duty to defend ACN due to the faulty-workmanship exclusions in the insurance policy and due to the lack of completed operations. Counsel alternatively contended that no contract damages were due because other insurers had paid all of ACN’s defense costs. As to the bad faith claim, defense counsel contended that United National’s conduct was reasonable and that it followed the advice of outside counsel. As to the claim regarding the collection of the uncontested judgment, defense counsel contended that the judgment awarded no covered damages and that Mayer Beverly Park (and ACN) could not satisfy its burden to prove that ACN was unable to defend itself since ACN received a defense from other insurers. Defense counsel further contended that the settlement between ACN and Mayer Beverly Park was collusive in that Mayer Beverly Park and ACN permitted, knowingly presented, and acquiesced in false claims of damages to the arbitrator. Defense counsel moved for summary judgment/adjudication on the plaintiffs’ theories of alter ego, breach of contract, and bad faith. All motions were denied, except the motion made by American Insurance Adjustment Agency’s counsel in which counsel argued, and United National agreed, that all of American Insurance Adjustment Agency’s conduct was undertaken within the course and scope of its agency for United National., Mayer Beverly Park and ACN sought recovery of the 2010 judgment of $939,577, plus almost $500,000 in interest, and recovery of attorney fees and costs in connection with the defense of the underlying matter. They also sought recovery for the loss of ACN’s business operations, for lost profits, for emotional distress, and for Brandt attorney fees in this action. In addition, the plaintiffs sought recovery of punitive damages.
COURT
Superior Court of Los Angeles County, Los Angeles, CA
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INJURIES:
- anxiety
- brain
- brain damage
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- depression
- epidural
- extradural hematoma
- face
- facial bone
- fracture
- head
- headaches
- hearing
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- loss of
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- shoulder
- skull
- speech
- subdural hematoma
- tinnitus
- traumatic brain injury
- vision
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