Some attorneys specialize in suing insurance companies. Sometimes we do that, but the real core of our insurance practice is inseparable from our real estate and business litigation practice. When a client presents a business or real estate dispute, we always ask this threshold question: Is there insurance? The answer leads to further questions. Is it first-party or third-party? Is the client the insured, or is the opponent the insured? What is the nature of coverage? What are the exclusions? Does the incident fall within the time period of the policy? What is the self-insured retention? Have the limits been exhausted? Depending on the answers, insurance may prove to be a mere sidebar, or a dead end. Other times, however, insurance coverage plays a critical role in our overall case strategy.
An example: Our client was contractually obligated to deliver a vacant commercial building by an agreed date, with enormous potential liability if he failed to comply. The attempted closure triggered a lawsuit against our client for an injunction and damages. Some allegations arguably suggested covered claims, while others arguably did not. We made demand on our client’s liability insurer, which initially was slow to respond, making it more difficult for our client to deal with the flurry of injunction applications and discovery demands. We turned up the heat, showing the insurer that its equivocating could result in exposure well beyond the policy limits. The insurer paid for defense of all claims, including not only all legal fees but two expert witnesses, and, after two full days of mediation, it paid for the full settlement. The amount it paid exceeded policy limits. Thus, a dispute nominally about real estate and contractual issues found its solution in insurance, and the adept tendering and managing of the claim.
One of the more obscure, but vital, aspects of insurance law comes to the fore when a liability insurer becomes insolvent. In this situation there is frequently an insurer of last resort: the California Insurance Guarantee Association (CIGA) (you may have noticed the “CIGA surcharge” included in your insurance premium). The nature and extent of CIGA coverage, and how it dovetails with other coverage from solvent insurers, is obscure. We have developed special expertise in this area. We skillfully present and guide insolvency claims through complex and arcane procedural rules. We treat our clients as informed and valued participants in terms of assessing strategy and recovery possibilities, and, just as importantly, we strongly advocate for them.
For example, our firm represented the successful claimant/appellant in a landmark reported decision, entitled CD Investment v. CIGA, 84 Cal.App.4th 1410 (2000). In that case, we had to battle CIGA’s arguments: (1) that it was entitled to deduct — from the $500,000 statutory limit on what it must pay on a claim — the insurance proceeds that our client received on the same claim from other solvent insurers, and (2) that, where there is a progressive loss triggering coverage over several policies, one $500,000 statutory limit applies to the entire claim. CIGA persuaded the trial court on both of these counts, arguing that it stood more or less in the shoes of the California State Insurance Commissioner, and that therefore its opinions were entitled to deference. Determined, we appealed, and delved deeply into legislative history to show that CIGA’s positions were not merely self-serving, but at odds with the legislature’s goal of providing a layer of stability and assurance to insureds and third-party claimants. The court of appeal found in our client’s favor on all counts.