HOWARD
v. 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 I….
C. American breached its
duty to defend and owed contribution to the defending insurers
The
trial court found that American had a duty to defend the Bishop in the
underlying litigation brought by James Howard and breached that duty. The defense of the Bishop fell to his other
insurers, who shouldered the expense through trial. Two of those insurers, St.
Paul and CIGNA, assigned to plaintiffs their
contribution claims against American for defense costs. The court calculated the amount of the two
insurers' right of contribution from American at $75,523.87 and awarded that amount
to plaintiffs as the insurers' assignees.
American
disputes the trial court's liability finding and its calculations. As to liability, American maintains that a
duty to defend is determined at the time the insured tenders the insurance
policy and, at that time, the facts known to American showed that the
molestation of James occurred outside its policy period. American also questions the basis for
awarding any recovery, even if it did have a duty to defend. American argues that an insured cannot recover
for breach of the duty to defend if the insured is fully defended by other
insurers and denies plaintiffs' entitlement to receive contribution as
assignees of defending insurers. As for
the calculation of the amount due, American writes a single sentence in its
appellate brief to say that the trial court's calculations 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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