Hardiman | Carroll

The big guy doesn’t always win. Despite an additional insured endorsement issued for the benefit of the general contractor which hired the named insured subcontractor, Hardiman & Carroll was able to extricate its carrier clients.

Developer’s carrier provided coverage to developer for a large condominium project which was the subject of a construction defect law suit. Developer’s carrier sued developer, seeking declaratory relief as to the coverage available to developer under the policy. Developer cross-complained against its carrier for breach of contract and breach of the implied covenant of good faith and fair dealing.

In turn, developer’s carrier cross-complained against the insurers of the subcontractors involved in the subject construction project. Developer’s carrier asserted that Hardiman & Carroll’s carrier clients insured two of those subcontractors and the carriers were brought into the action on that basis. Cheryl Castrogiovanni Guz analyzed the litigation landscape and filed a winning motion for summary judgment for one client. Despite an additional insured endorsement issued for the benefit of the developer, Cheryl successfully argued that the coverage did not apply as the carrier had limited the scope of the endorsement.

With respect to the other carrier, Cheryl was able to provide evidence that her client did not issue a policy to cover the project. Based on her successful arguments, summary judgments were granted and the clients were extricated from the matter with respect to all alleged policies.

Advertising injury coverage disputes can be technical and dicey. Whether under coverage B of the CGL form or an endorsement crafted by the carrier, the disputes often involve issues of first impression and claims with considerable amounts at stake. Over the years, Hardiman & Carroll has been asked to advise carriers on these coverage issues and, in several instances, to seek a determination through a declaratory relief, contribution or indemnity action.

Recently, an advertising injury claim was presented to a carrier client of the firm. The claim implicated both duty to defend and duty to indemnify issues under policies issued by several different carriers. The Hardiman & Carroll carrier client recognized its duty to defend; the other carriers did not.

Following settlement of the underlying case, Michael Hardiman sued the denying carriers for contribution. Through creative lawyering and motions for Summary Judgment, Michael was able to recover for the client all defense expenses paid in defending the underlying suit and all indemnity dollars paid in settlement.

Hardiman & Carroll does not simply provide its clients with coverage recommendations and close its file. Ongoing investigation and discovery often results in tangible benefits to the carrier clients, including contributions from co-carriers and findings of non-coverage.

Lauren O’Brien undertook a coverage investigation for a carrier which issued manifestation trigger-of-coverage policies. At the time of tender, insufficient information existed to determine when the alleged damage first manifested. Therefore, the carrier accepted the defense of the named insured and the additional insured.

However, rather than leaving the client to incur continuing defense fees on two fronts, Lauren continued her investigation, digging through pleadings, government documents, and discovery for information concerning the damage asserted. Ultimately, Lauren discovered information confirming that damage first manifested long after expiration of the client’s policies.

After considering the evidence presented and Lauren’s recommendations, the carrier disclaimed coverage to the named insured and additional insured and withdrew from the defense of each entity. Thus, by allowing Hardiman & Carroll to undertake a continued investigation and provide updated recommendations, the carrier eventually saved tens of thousands of dollars in defense.

Hardiman & Carroll was able to save a self-employed metal
fabricator and its carrier tens of thousands of dollars with an aggressive and well-presented defense.

Ken Litton’s client, a self-employed metal fabricator, was behind the wheel of the company commercial van when she fell asleep and hit plaintiff’s Honda Civic, creating a four-vehicle pileup. Plaintiff’s vehicle sustained significant damage and was declared a total loss. Plaintiff asserted that he suffered serious injuries to his cervical and lumbar spines and demanded six figures to resolve his claims. Plaintiff’s claims were buttressed by his contention that his ability to mountain climb had been destroyed. Plaintiff produced evidence that he had been an avid mountain climber before the accident, and had been sponsored by advertisers during some of his climbs. Thus, plaintiff asserted his life had been irrevocably altered.

Mr. Litton took an aggressive position with respect to the loss, highlighting the fact that plaintiff’s medical care had consisted primarily of conservative treatment. Additionally, the pertinent MRIs disclosed only degenerative findings and no catastrophic injury. Mr. Litton was able to resolve the case for $12,000.

Even carriers that act properly are often sued for breach of the implied covenant of good faith and fair dealing. Thankfully, recourse is available when the carrier hires Hardiman & Carroll.

The carrier insured the driver at fault in an auto accident. The damaged party, Smith, submitted the claim to his own insurance carrier, which paid to repair the vehicle. Smith wanted the vehicle totaled and refused to take possession of the repaired automobile. Smith’s carrier submitted a subrogation claim to Cheryl Castrogiovanni Guz’s carrier client. To protect its insured, Cheryl’s client paid the claim.

Thereafter, Smith sued his carrier for mishandling the claim. Cheryl’s client and its third party claims administrator were also named in the complaint under causes of action for breach of the implied covenant of good faith and fair dealing, interference with contract, unfair business practices and conspiracy.

Cheryl ultimately filed a motion for summary adjudication. Based on Cheryl’s persuasive legal arguments, the motion was granted and both the carrier client and the TPA were extricated from the action without the need for protracted discovery or expense.

When faced with a form 20 10 additional insured endorsement, many carriers assume they have no recourse other than to contribute to, and often be held hostage by, the joint defense of an additional insured. Such is not always the case.

Lauren O’Brien handles coverage matters for a carrier which issued an artisan contractor policy. With many small, finish contractors as insureds, the carrier is often mired in escalating additional insured defense fees in large construction defect actions, based on the issuance of 20 10 endorsements.

However, some of those 20 10 endorsements include limiting language regarding the obligation to defend. In one particular instance, the 20 10 form contained limiting language and the certificate of insurance referenced a portion of the development which was not part of the litigation at issue.

Based on Lauren’s research and recommendations, the carrier disclaimed coverage to the additional insured. Although the developer’s counsel contested the denial, the carrier stuck to its guns. Following resolution of the underlying action, the direct carrier for the developer instituted an action to recover additional insured fees and expenses. Hardiman & Carroll’s client was named as a defendant to that action.

Again, Lauren asserted the limitations of the policy and certificate documentation. Based on the consistent and well-presented position on behalf of the carrier, Lauren was able to dispose of the matter for less than $5,000, far less than the cost of the additional insured defense.

Hardiman & Carroll’s investigative efforts and cross-examination of medical experts in a complicated cervical spine case resulted in excess of $75,000 in savings for the carrier.

Ken Litton represented the company in charge of maintaining the elevators in a San Francisco International Airport (“SFO”) terminal. Mr. Litton also represented the City and County of San Francisco. Plaintiff flight attendant claimed that while entering an elevator at SFO, she was pinned between the elevator’s closing doors. Plaintiff asserted the accident caused a C6-7 disc extrusion with nerve root impingement. Plaintiff initially treated with a chiropractor, but shifted care to a neurosurgeon after her neck symptoms worsened. A cervical spine MRI confirmed a C6-7 extrusion impinging on the C7 nerve root.

Plaintiff underwent surgery, which included a laminotomy and decompression of the nerve root. The postoperative diagnosis was C7 radiculopathy with triceps and hand intrinsic weakness following a disc herniation at C6-7. Mediation was unsuccessful, as plaintiff demanded $350,000. Trial was imminent.

Hardiman & Carroll took the videotaped trial examinations of plaintiff’s out-of-town neurosurgeon and chiropractor. Mr. Litton was able to elicit testimony from the neurosurgeon supporting the defense position that the mechanics of the claimed elevator accident were not consistent with the claimed injury. Testimony was obtained from the chiropractor confirming plaintiff’s pre-accident cervical symptoms and chiropractic treatment spanning several years. Mr. Litton negotiated a settlement of $29,000.

Proper claims handling shouldn’t result in adverse judgments. Hardiman & Carroll has years of experience defending insurance carriers who have been wrongly sued for breach of the implied covenant of good faith and fair dealing. Cheryl Castrogiovanni Guz prepared the winning briefs seeking summary adjudication and summary judgement on behalf of a carrier in Santa Clara Superior Court.

The carrier received an auto theft claim from its insured. The carrier accepted the claim and began investigation. Following a period of complex claims handling and investigation, including issues relating to the lack of responsiveness of the insured, the carrier adjusted the undisputed portion of the loss. Despite continued failure to provide required documentation pertaining to the loss, the insured asserted the claims handling was unreasonably delayed and filed suit against the carrier, alleging breach of contract, intentional infliction of emotional distress, intentional interference with contractual relations, and negligent interference with prospective economic advantage.

Cheryl conducted an exhaustive investigation and review of the claim handling history. Based on the detailed chronology of the claim, deposition testimony and controlling case law, Cheryl obtained summary judgment, vindicating the claims handling by the carrier.

Hardiman & Carroll will vigorously pursue carriers that wrongly deny policy benefits to an insured. Take the case of Bob Wallace, who worked his tail off for decades as a sheet metal fabricator.

Mr. Wallace was concerned about safety at each of his projects and implemented an active safety program. That program included the purchase of liability insurance to protect the public, his company and its workers. Bob was proud of his safety record and did all he could to maintain it.

Bob’s company was hired to install sheet metal at a multi-story office building. While most workers were at lunch, the employee of another contractor was delivering heavy materials to the fourth floor of the unfinished, essentially open building. The worker fell several feet, sustaining serious life-threatening injuries.

Although Bob and his crew were at lunch, Bob’s company was blamed. Bob turned to his insurance company for the protection he had paid substantial premiums for each year. Unfortunately, the carrier, without performing much of an investigation, told Bob he was on his own – coverage denied. Bob realized he faced losing the company he had worked years to build, as the claims of the injured worker had a value of several hundreds of thousands of dollars, enough to bankrupt him.

Facing financial ruin, Bob turned to Hardiman & Carroll for advice. Michael Hardiman chased the insurance company for more than two years, defeating every conceivable motion filed by the carrier. Michael established that the carrier failed to investigate the basis for coverage, failed to adhere to its own internal guidelines and failed to provide the coverage for which Bob had paid.

On the eve of trial, the case was settled for a confidential seven-figure amount. Bob and his company were saved, and Bob was able to return to the business of construction.

Can a carrier avoid hemorrhaging defense dollars when the defense obligation is triggered? With Hardiman & Carroll, the answer is yes. Hardiman & Carroll was asked to help a CGL carrier with a long history of bleeding defense dollars. Lauren O’Brien began handling what is a typical coverage situation. Namely, tenders from the named insured and additional insured regarding defects in a multi-phase housing development. Utilizing her understanding of the coverage issues presented and creative ideas, Lauren negotiated resolution of all claims against the named insured and all of the additional insured issues for a fraction of what the carrier had reserved for defense costs alone. Instead of experiencing the usual funding of the defense of the named insured and the additional insured until an indemnity settlement could be reached, the carrier was able to save both expenses and time. File closed.