Employers Ins. Co. of Wausau v. Rick Concrete Construction
Rick Concrete Construction, Inc. (Rick Concrete) appeals, and Employers Insurance Company of Wausau (Wausau) cross-appeals, from a judgment of the trial court resolving a dispute between the parties regarding Wausau's handling of third party liability and first party physical damage claims under a business auto policy issued by Wausau. The parties' dispute arose from a February 2006 fatal accident at a construction site in Murrieta, California, involving concrete pumping equipment leased by Rick Concrete.
The trial of this action occurred in two phases. The first phase, tried to the court in July 2008, involved Wausau's claims for declaratory relief regarding preliminary coverage issues, including whether the equipment involved in the accident was a covered "auto" under Wausau's policy, and whether the "operations" exclusion of the policy applied. The second phase, tried to a jury in March 2010, involved Rick Concrete's cross-claims for damages based on, among other allegations, Wausau's alleged breach of contract, bad faith and fraud in the handling of Rick Concrete's insurance claims.
As reflected in the July 1, 2010 judgment, the trial court determined in the declaratory relief action that the equipment involved in the accident was a covered "auto," and the policy's "operations" exclusion did not apply. During the second phase of the trial, the court further ruled that Wausau brought the declaratory relief action reasonably and with proper cause. That ruling, and the trial court's order directing a verdict on Rick Concrete's fraud and misrepresentation claims, narrowed the cross-claims to those alleging Wausau's breach of contract and bad faith in making untimely payments on Rick Concrete's first party physical damage claim. In its special verdict issued after trial of the second phase of the case, the jury found that Wausau breached its contract with Rick Concrete by failing to properly pay the first party physical damage claims. The jury also found that Wausau unreasonably delayed the first of its two payments to Rick Concrete for the cost of repairs to the equipment damaged in the accident. However, the jury found that Wausau did not unreasonably delay the second payment for damage to the equipment—a payment Wausau made only after the trial court determined that Wausau was liable not just for Rick Concrete's actual costs of repair, but for its reasonable costs of repair.
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