Electrical fire destroys sandwich shop. Insurer pays, seeks indemnity. $7.8M. Monterey County.

Summary

Fireman's Fund pays $7 million in fire damage claims; seeks contractual indemnity from entity that selected the electrical contractor whose work allegedly caused the fire.

The Case

Case Name: Fireman's Fund Ins Co v. Triton Subs, Inc., et al.
Court and Case Number: Monterey Superior Court / CGC-15-544547
Date of Verdict or Judgment: Thursday, June 13, 2019
Date Action was Filed: Friday, March 06, 2015
Type of Case: Insurance Subrogation, Recovery, Indemnity
Judge or Arbitrator(s): Hon. Curtis K. A. Karnow
Plaintiffs:
Fireman's Fund Ins. Co
Defendants:
Triton Subs, Inc.
Robert Gorham
Suzanne-Santia Gorham
Mark Rogers
Type of Result: Jury Verdict

The Result

Gross Verdict or Award: $7,844,253
Award as to each Defendant:
Joint and several.
Trial or Arbitration Time: 9 days.
Jury Deliberation Time: 3 1/2 hours
Jury Polls: 12-0 liability; 10-2 damages.
Post Trial Motions & Post-Verdict Settlements: JNOV/New trial motions by defendants denied on August 5, 2019; Motions for $1.2 million contractual attorney's fees, for $3.3 million interest and expert fees by plaintiff.

The Attorneys

Attorney for the Plaintiff:
Charlston, Revich & Wollitz LLP by Tim Harris and Steve Soskin, Los Angeles.
Attorney for the Defendant:
Harrington Foxx Dubrow Canter by Ed Leonard, Orange.

Sowder Firm, APC by Greg Sowder, Oakland.

The Experts

Plaintiff's Technical Expert(s):
Vytenis Babrauskas, fire science, New York City, NY.

Ron Kilgore, electrical fires, Englewood, CO.

Kevin Kearney, construction, Petaluma.
Defendant's Technical Expert(s):
Chris Lautenberger, fire science, Berkeley.

Michael Seid, franchising, West Hartford, CT.

Facts and Background

Facts and Background:
An electrical fire destroyed a Quiznos sandwich shop in Monterey, destroying the store, and contiguous structures.

Plaintiff insurer defended the 14 resulting lawsuits, and settled the claims for over $7 million. Plaintiff then sued defendant Triton, a former California agent for Quiznos, and the individual defendants as guarantors of Triton.
Plaintiff's Contentions:
That defendant Triton Subs, Inc. had breached the written indemnity provisions in an “Area Marketing” agreement with Quiznos. The agreement obligated Triton to indemnify Quiznos for damages (including attorney’s fees) caused by Triton’s breach of that Area Marketing agreement.

After an electrical Fire broke out in a Quiznos store in Monterey (and destroyed the store and nearby structures), plaintiff (insurer to Quiznos), paid the claims of over $7 million. Then it sued Triton for not paying the claims, as required by the indemnity provisions in the Area Marketing agreement.

Under state subrogation law, similar or identical to the law in all 50 states, plaintiff insurer’s payment of the claims against Quiznos entitled plaintiff to assert the indemnity rights of Quiznos against Triton. Plaintiff also sued three individual guarantors of Triton (for not honoring the indemnity provisions they had guaranteed), and the verdict was against them also.

Also, that Triton had enabled a "low bid" by an inexperienced contractor that was 50% less than experienced contractors. The contractor failed to encase a toaster oven cable in protective metal conduit. The cable was damaged during installation, carbonized and ignited 3 years later, causing the fire. The low bid was a red flag – the contractor should never have been permitted to bid, much less been used: he had an incentive to cut corners.
Defendant's Contentions:
Defendants did not dispute that conduit was not used to protect the cable, but argued that the cause of the fire was unknown and could not be determined; that they were not required to detect the visible defects of the contractor; and that defendants were entitled to facilitate the contract to the inexperienced contractor because his low bid was a "loss leader," designed to get new business, so they need not have been concerned at his low bid.

Demands and Offers

Plaintiff Final Demand before Trial: A demand of $550,000 had been made in 2016; a final demand of $8,500,000 was made on April 30, 2019.

Additional Notes

Defendants filed two motions to dismiss prior to trial. At the MSC two days before trial, defense offered nothing.