Bad-faith claim against title insurer for denial of coverage for "lack of legal access" to home. $1.5M. Riverside County.
Summary
Couple builds home but later finds out they have no legal access to utilities or public road.
The Case
- Case Name: Keith Jones and Patricia Jones v. Commonwealth Land Title Insurance Company
- Court and Case Number: Riverside Superior Court / RIC1612837
- Date of Verdict or Judgment: Monday, June 24, 2019
- Date Action was Filed: Monday, October 03, 2016
- Type of Case: Insurance – Bad Faith, Claims Handling
- Judge or Arbitrator(s): Hon. David M. Chapman
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Plaintiffs: Keith Jones and Patricia Jones
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Defendants: Commonwealth Land Title Insurance Company
- Type of Result: Jury Verdict
The Result
- Gross Verdict or Award: $1,550,000
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Economic Damages:
Unpaid insurance policy benefits: $300,000
Lost wages: $400,000
Consequential damages: $250,000
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Non-Economic Damages:
Emotional distress: $600,000
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Punitive Damages:
The jury did not award punitive damages.
- Trial or Arbitration Time: 14 court days
- Jury Deliberation Time: 1 day
- Jury Polls: 12-0 verdict on both of plaintiffs’ claims. (Breach of contract and breach of the implied covenant of good faith and fair dealing.)
The Attorneys
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Attorney for the Plaintiff:
Shernoff Bidart Echeverria by Samuel L. Bruchey and Cooper Johnson, Beverly Hills.
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Attorney for the Defendant:
Fidelity National Law Group by Howard Brody and Mary Lazaran, Los Angeles.
The Experts
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Plaintiff's Technical Expert(s):
Guy Kornblum, insurance bad faith.
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Defendant's Technical Expert(s):
Anya Stanley, insurance bad faith.
Daniel Poyourow, property appraisal and valuation.
Robert Glushon, Luna & Glushon, due diligence of buyers when purchasing vacant land.
Facts and Background
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Facts and Background:
Plaintiffs’ lawsuit arose from a denial of insurance policy benefits. In 2012, plaintiffs purchased an undeveloped parcel of land in Riverside County near Temecula and purchased a title insurance policy from Commonwealth Land Title Insurance Company.
The insurance policy insured plaintiffs from loss resulting from a “lack of legal access” to their property.
Plaintiffs hired a contractor to build them a home on the parcel. By 2014, construction on the home was nearly complete, but the property was still not connected to a paved public road and it did not have utilities, such as electricity and water services.
On November 30, 2015, plaintiffs submitted an insurance claim to Commonwealth on the basis that they had no legal access necessary to pave a road connecting the land to a public road or bring utilities to their home. On June 2, 2016, Commonwealth adopted the position of the County of Riverside and concluded that legal access existed to the property and it determined that the plaintiffs’ claim was resolved.
It was alleged that plaintiffs lost their property to foreclosure. The stress of Commonwealth’s denial and the loss of their property caused plaintiff Keith Jones to lose his job as a pilot for Delta Airlines.
On October 3, 2016, plaintiffs filed a lawsuit against Commonwealth alleging that the insurance company unreasonably denied their insurance claim, for which they sustained damages.
The parties agreed to bifurcate trial. During phase one, which took place in December 2018, the parties presented evidence to the court on the specific question of whether legal access existed to plaintiffs' property on June 2, 2016 when Commonwealth denied their insurance claim. The court ruled that no legal access existed to the property.
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Plaintiff's Contentions:
During the second phase of the trial, plaintiffs alleged that Commonwealth breached the terms of their insurance contract and acted in bad faith. Plaintiffs sought compensation for their losses, including the loss of their property.
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Defendant's Contentions:
It was the contention of Commonwealth that “physical access” such as a paved road and utilities was not covered under the title insurance policy.
That the insurance claim for physical access such as a paved road and utilities was stated to be not insured under the title insurance policy.
Additional Notes
Per defense counsel:
Plaintiffs’ demand pre-trial was $2.4 million, reduced during trial to $2.1 million.
Defendant’s offer was $300,000 pre-trial and increased to $400,000 during the trial.