AMERICAN NATIONAL FIRE INS. CO.
Filed 8/11/10
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
FOUR
JAMES
HOWARD et al.,
Plaintiffs and Appellants,
v.
AMERICAN NATIONAL FIRE INS. CO.
et al.,
Defendants and Appellants.
A121569 & A123187
(San
Francisco County
Super. Ct. Nos. 307379 & 307383)
STORY CONTINUE
FROM PART II….
Even if the genuine dispute
standard were applied here, American's refusal to settle cannot be excused as a
reasonable dispute. American's
no-coverage position was founded on an unfair and selective reading of James
Howard's deposition testimony that distorted James's account of specific
episodes of molestation into an admission that no molestation occurred during
the policy period, and the insurer's refusal to settle ignored powerful
indications that a multimillion-dollar judgment was likely. The trial court detailed these matters in its
statement of decision and we will not repeat them here.
American
also acted in bad faith in refusing to indemnify the Bishop after judgment was
entered in the Howard case. In this
context, an insurer's genuine dispute as to coverage may negate bad faith. (Dalrymple v. United
Services Auto. Assn. (1995) 40 Cal.App.4th 497, 523.) But â€
| Description | James Howard, a young man molested as a child by a Catholic priest, sued the Bishop who retained the priest in the diocese. A jury found the Bishop liable for negligent retention, and the court entered judgment in the amount of $5.5 million: $2.5 million in compensatory damages and $3 million in punitive damages. The Bishop settled with Howard while the case was on appeal, and agreed to join Howard in an action against the Bishop's insurers to recover on the judgment and for bad faith failure to defend, settle, and indemnify the molestation case. This action against one of the defendant insurers, American National Fire Insurance Company (American), was adjudicated in a bench trial. The court found American liable for breach of contract and bad faith failure to defend, settle, and indemnify. The court awarded almost $3 million in damages. American appeals the judgment, and plaintiffs appeal the denial of prejudgment interest. In a separate appeal, American challenges the legal costs awarded to plaintiffs in a postjudgment order. We consolidated the two appeals for purposes of oral argument and decision. As discussed below, we modify the judgment to award prejudgment interest but affirm the judgment in all other respects. Court also affirm the postjudgment order awarding costs, with one modification. |
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