Amezcua vs. East West Bank Corp

Sep 01, 2014

OUTCOME: 10.000.000 Class Action Settlement

Earley v. Chubb Custom Ins. Co.

Jul 02, 2010

OUTCOME: Verdict/Judgment Amount: $7,553,559

The historic Planters Hotel was a landmark structure that had stood on the town square in the heart of Brawley, California since the 1920s. The hotel was destroyed by fire in March 2007. At the time of ... the fire, the hotel was covered by a $3.1 million insurance policy with defendant Chubb Custom Insurance Company. The owner of the hotel was P. Allen Earley, Trustee of the Allen Earley 1998 Family Trust. Earley had obtained the policy through Henry “Hank” Kuiper, an agent employed by defendant Smith Kandal Insurance Company. A claim was promptly submitted, but it was denied by Chubb, based on exclusionary policy language regarding “protective safeguards,” and Earley was left without any insurance coverage whatsoever for the total loss of the hotel. Earley and his lawyers at Ward & Hagen sued Chubb for breach of contract and bad faith denial of the claim. During the course of discovery, it was learned that Smith-Kandal had made a number of serious mistakes and badly mishandled the insurance coverage for the Planters Hotel. One of the more momentous discoveries was the fact that, just a few months before the fire, representatives of Chubb had done an inspection of the hotel and had sent an e-mail with its findings and recommendations to Smith-Kandal, but this information was not forwarded to Earley. Significantly, this e-mail notified Smith-Kandal that the hotel was “very much underinsured” and included a cost estimate showing the actual reconstruction costs would be in excess of $6.2 million. Based on this reconstruction cost estimate, Chubb offered to increase the limits of the policy to an amount in line with the true value of the property. In breach of its duties, Smith-Kandal failed to notify Earley of the fact that the hotel was “very much underinsured” and did not ever communicate Chubb's offer to increase the limits to $6.2 million. The e-mail also attached two reports, which included certain “recommendations” specifically addressing issues relating to the “protective safeguards.” The text of the e-mail referenced the attached recommendations and stated that they “need to be complied with.” Once again, however, the evidence showed that Smith-Kandal failed to forward these recommendations and did not advise Earley regarding the contents of the e-mail or the findings in the reports. Instead of forwarding this e-mail and discussing the issues with Earley, Smith-Kandal on its own advised Chubb not to increase the limits and actually agreed to change the policy from the superior Replacement Cost (“RC”) coverage to the lesser coverage afforded under Actual Cash Value (“ACV”). As a result, instead of getting $6.2 million as an RC benefit, Earley was faced with an outright coverage denial by Chubb based on his failure to comply with the “recommendations” that were never forwarded to him; he was limited to a maximum recovery of $3.1 million based on the inadequate limits and his recovery was reduced under the inferior ACV method of valuation, which Chubb argued was actually less than $2 million. In the latter part of 2009, Earley reached an out-of-court settlement with Chubb but proceeded to trial against Smith-Kandal.

Payne v. City National Bank

N/A

OUTCOME: Settlement $33 million