Allstate Insurance Company v. Richard Thacher et al

Filing 173

JUDGMENT RE DECLARATORY RELIEF, BREACH OF CONTRACT CLAIMS, AND SECTION 11580 CLAIM by Judge Ronald S.W. Lew: JUDGEMENT IS HEREBY ENTERED FOR Defendants and Counterclaimants Richard Thacher, Valerie Thacher, and Guadalupe Trujillo as set forth below: the Court finds that Allstate breached the CPL Policy and is liable for the arbitration judgment award under Cal. Ins. Code Section 11580. Therefore, judgment is hereby entered in the following amounts: (1) Allstate owes to Defendant Thacher $18 ,399.59, plus 10% interest per annum, for amounts expended in defense of the Trujillo claim. (2) Allstate owes $100,000 (the CPL Policy limit) to Defendant Trujillo on the Section 11580 claim, plus interest at 10% per annum. (3) The in terest shall be calculated as having begun accruing as of 7/14/2006. (4) The Court denies Defendant's request to award $100,000 to the Thachers for breach of the CPL Policy. The insureds, Valerie and Richard Thacher, had no duty to cooperat e or provide additional notice or information and were entitled to enter into the arbitration agreement, to accept the covenant not to execute, to stipulate to liability and to agree to arbitrate the amount of damages. Judgment is hereby entered in t he following amount: (1) Allstate owes $415,093.78 to Defendant Trujillo on the Section 11580 claim, plus interest at 10% per annum. The Court also finds that Allstate did not breach the Umbrella Policy. The Court finds that Allstate's equitable defenses fail. The Court denies Defendants' request for a jury trial on bad faith. Notwithstanding the jury's findings, the Court finds that its ruling dismissing these claims on Summary Judgment was the appropriate disposition for Defendants' bad faith claims. (MD JS-6, Case Terminated). (gk)

1 2 3 4 5 6 7 8 9 10 11 Allstate Insurance Co., 12 13 14 15 16 17 18 19 ) ) Plaintiff, ) ) v. ) ) ) Richard Thacher, et al., ) ) ) Defendants. ) ) ) ) ) CV 08-3326-RSWL Judgment Re: Declaratory Relief, Breach of Contract Claims, and § 11580 Claim UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

After consideration of all the arguments presented,

20 JUDGEMENT IS HEREBY ENTERED FOR Defendants and Counter21 claimants Richard Thacher, Valerie Thacher, and 22 Guadalupe Trujillo as set forth below: 23 I. 24 Judgment Regarding the CPL Policy The jury found that Allstate Insurance Company did

25 not mail a notice of non-renewal of the Comprehensive 26 Personal Liability Policy to Richard and Valerie 27 Thacher. Further, the jury found that the arbitration
1

28 award was neither unreasonable nor the product of fraud

1 or collusion.

Finding sufficient evidence to support

2 the jury's findings, the Court will not pierce the 3 jury's findings. 4 Accordingly, the Court finds that the CPL Policy 5 remained in force at the time of the accident, and 6 finds and declares that Allstate had a duty to defend 7 and indemnify under the CPL Policy. 8 There is no dispute that Allstate denied coverage 9 under the CPL Policy, refusing to defend or indemnify, 10 and therefore, no conditions apply under the CPL 11 Policy. The insureds, Valerie and Richard Thacher, had 12 no duty to cooperate or provide additional notice or 13 information and were entitled to enter into the 14 arbitration agreement, to accept the covenant not to 15 execute, to stipulate to liability and to agree to 16 arbitrate the amount of damages. 17 Based on the above findings, the Court finds that 18 Allstate breached the CPL Policy and is liable for the 19 arbitration judgment award under Cal. Ins. Code § 20 11580. 21 23 24 25 26 27 28
1

Therefore, judgment is hereby entered in the (1) Allstate owes to Defendant Thacher $18,399.59, plus 10% interest per annum, for amounts expended in defense of the Trujillo claim.1

22 following amounts:

See Cal. Civil Code § 3289(b). 2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 16

(2) Allstate owes $100,000 (the CPL Policy limit) to Defendant Trujillo on the § 11580 claim, plus interest at 10% per annum. (3) The interest shall be calculated as having begun accruing as of July 14, 2006. Pursuant to Cal. Code Civ. Proc. § 3291, the judgment shall bear interest from the date of the first offer pursuant to Section 998 of the Code of Civil Procedure. The Court finds that the § 998 offer of July 14, 2006 is the date from which interest shall accrue on this judgment. (4) The Court denies Defendant's request to award $100,000 to the Thachers for breach of the CPL Policy. 2 The jury found that Allstate Insurance Company

15 II. Judgment Regarding the Umbrella Policy 17 denied coverage under the Personal Umbrella Policy. 18 Further, the jury found that the arbitration award was 19 neither unreasonable nor the product of fraud or 20 collusion. 22 findings. 23 24 25 26 27 28
Mr. and Mrs. Thacher's only loss traceable to Allstate's breach is the costs they expended to defend the Trujillo claim. It would create a windfall to award them the amount of the arbitration award when they have no obligation to pay it under the covenant not to execute and Allstate is already liable for that judgment under § 11580. Defendants present no authority to this Court allowing for such a double recovery. 3
2

Finding sufficient evidence to support the

21 jury's findings, the Court will not pierce the jury's

1

Accordingly, the Court finds that no conditions The insureds, Valerie

2 apply under the Umbrella Policy.

3 and Richard Thacher, had no duty to cooperate or 4 provide additional notice or information and were 5 entitled to enter into the arbitration agreement, to 6 accept the covenant not to execute, to stipulate to 7 liability and to agree to arbitrate the amount of 8 damages. 9 11 12 13 14 Based on the above findings, judgment is hereby (1) Allstate owes $415,093.78 to Defendant Trujillo on the § 11580 claim, plus interest at 10% per annum. 3 The Court also finds that Allstate did not breach As explained in the Court's The 10 entered in the following amount:

15 the Umbrella Policy.

16 Summary Judgment Order, on this claim, Plaintiff must 17 have actually refused to indemnify Defendant. 18 Court found that Allstate had not yet breached its duty 19 to indemnify because it has not refused to pay the 20 underlying judgment to Defendants.4 (Order Granting in Further, the 21 Part and Denying in Part Counter-Claimants' Motion for 22 Partial Summary Judgment [76] at 33-35.) 23 24 25 26 27 28
At the time of the "denial" no actual judgment was in existence or presented to Allstate. Further, Allstate's position as the excess insurer under the Umbrella Policy creates different implications for "denying coverage" than under its position as the primary insurer. 4
4 3

See Cal. Code of Civil Procedure 685.010.

1 Court specified in its Order that "[e]ven if the trier 2 of fact finds that Plaintiff's conduct in failing to 3 respond to the claim asserted under the Umbrella Policy 4 constitutes a denial of coverage, that finding is for 5 the purposes of estopping Plaintiff from arguing 6 Defendants did not give it notice and cooperation." 7 (Id. at 35 n 18.) Additionally, the Court has already 8 found that there was no breach of the duty to defend 9 under the Umbrella Policy. 10 Nevertheless, this finding does not effect the 11 result that Allstate now owes a duty to indemnify under 12 the Umbrella Policy and is liable for the arbitration 13 award under § 11580.5 14 III. 15 17 /// 18 /// 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 27
5

Allstate's Equitable Defenses Based on the above findings, the Court finds that

16 Allstate's equitable defenses fail.

28 Defendant's request for $415,093.78 is denied for the same
reasons stated above under the CPL Policy. 5

Even if there was a breach under the Umbrella Policy,

1 IV. Defendants' Request for a Jury Trial on Bad Faith 2 The Court denies Defendants' request for a jury Notwithstanding the jury's 3 trial on bad faith.

4 findings, the Court finds that its ruling dismissing 5 these claims on Summary Judgment was the appropriate 6 disposition for Defendants' bad faith claims. (See 7 Order Granting in Part and Denying in Part Counter8 Claimants' Motion for Partial Summary Judgment [76].) 9 10 IT IS SO ORDERED. 11 12 DATED: September 18, 2009 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
6

HONORABLE RONALD S.W. LEW Senior, U.S. District Court Judge