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)
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. We also affirm the postjudgment order awarding
costs, with one modification.
I. facts
A. The underlying lawsuit and insurance
coverage disputes
A
Catholic priest, Father Oliver O'Grady, sexually molested many young children
over many years and was criminally convicted of child molestation in 1993. In 1994 and 1995, James Howard and his
brother Joh Howard sued O'Grady and other defendants for damages suffered from
the priest's molestation. The named
defendants included the head of the diocese that employed O'Grady, the Roman
Catholic Bishop of Stockton (Bishop), who is a corporation sole (a corporation
of one person whose successor becomes the corporation on his death or
resignation).
In
his complaint, James Howard alleged that the Bishop employed O'Grady from
approximately 1977 through 1991. James,
who was born in June 1975, alleged that he was an active parishioner in the
church from the time of his birth and that O'Grady regularly and repeatedly
molested him 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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