Court: "Perfect Storm" of Plaintiff Misconduct Voids Insurance Policy for $15 Million Judgment

LOS ANGELES, Nov. 3, 2023 /PRNewswire/ -- Proving again that insurance companies can stand on principled denials of coverage, Musick Peeler Partners Dan Woods and Steven Adams just won a trial in Los Angeles County Superior Court for its client, a California-based insurance carrier.

The claim arose from an altercation between tow truck operators and a vehicle owner at a restaurant in Sacramento. When the vehicle owner objected to his BMW being towed, an argument between the parties quickly escalated. One of the tow truck drivers struck the vehicle owner on the head with a "GoJak" device and severely injured him. The vehicle owner then sued the tow truck drivers in Sacramento Superior Court.

The tow truck operator was insured and tendered their claim for defense. Determining that the loss was the result of an intentional assault and battery, their carrier denied coverage.

The vehicle owner then, without notifying the carrier, amended his pleadings, emphasizing alleged negligence, and obtained a $15 million judgment against the tow truck operators, including an award of $10 million for negligence. The tow truck operators then assigned their insurance claim to the vehicle owner who made a policy limits demand. When the carrier refused, the vehicle owner sued, alleging the company had breached the insurance policy and acted in bad faith.

Their carrier, Musick Peeler's client, decided to defend the case vigorously. Following extensive discovery, the case came up for trial in June 2023. At trial, Woods and Adams argued that the vehicle owner's injuries resulted from an intentional assault and battery, not negligence, supported by the restaurant's security camera video footage and skillful cross-examination of plaintiff's witnesses.

The court decided the case in favor of Musick Peeler's clients and issued a statement of decision finding the loss was not covered by their basic policy because it resulted from intentional conduct, and that the policy's DMV 67 endorsement did not cover the loss because the injuries did not result from the unloading of the tow truck or its equipment. Further, the carrier was not bound by the Sacramento court's judgment because the plaintiff and his counsel did not keep the carrier informed on developments in the case. The statement of decision also questioned whether plaintiff's counsel committed fraud on the Sacramento court given the way he presented the case there.

The decision was a resounding victory for the insurance carrier, and Woods and Adams were very pleased with the result. Woods said of the outcome: "We're very satisfied with the court's decision and especially grateful to the court for seeing through plaintiff's efforts to manufacture coverage where none existed."

With offices in five major commercial centers across the state, Musick Peeler attorneys know California. Founded in 1954, Musick Peeler has kept pace with California's growth and with more than 100 attorneys, the firm has the resources and expertise to offer the highest quality representation in a wide variety of legal matters.

SOURCE MusickPeeler