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April, 2009
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Venue:
San Diego Central
Responsible Attorney(s):
Jon H. Tisdale
Gilbert, Kelly, Crowley & Jennett LLP
Facts:
Plaintiff was a passenger in a vehicle driven by one of Defendant’s insured when it was involved in a serious accident with significant injuries. The adverse vehicle has minimal insurance for bodily injury liability of $15,000. After settling that case, Plaintiff then turned to Defendant to submit a claim for Underinsured Motorist benefits under her driver's policy. The claim was declined by Defendant on the grounds that Defendant's insured had failed to pay premiums and the coverage had been allowed to lapse. Although Defendant’s insured did not contest the cancellation for non-payment, Plaintiff did and suit was filed against Defendant for bad faith/breach of contract seeking $250,000 plus punitive damages and attorneys fees. Plaintiff contended that Defendant’s practice of "short-rating" new business policies to cover the costs of application and approval was inappropriately applied to their insured and if the coverage was determined pro rata, their driver (and therefore her passenger) should have been covered rather than cancelled.
Result:
On behalf of Defendant, we filed a Motion for Summary Judgment based upon the fact that the Defendant’s insured was indeed a new insured because it was a new policy, not her mother's policy under which she had previously been insured, and upon Defendant’s demonstration that notwithstanding the application of the "short rate" to new business policy holders, the protocol for cancellation for nonpayment was unchanged and applied identically to all insureds. The Motion for Summary Judgment was granted and judgment was entered in favor of Defendant.
Pretrial Demands/Offers:
Demand $400,000. No offer.
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