A California Court of Appeals has decided it will not overturn a prior ruling declaring insurance broker Donald R. Kappauf not liable in a lawsuit filed by Main Street-Santa Ana LLC, a real estate company that owned a building severely damaged in a fire, reports
Law360.
This judgment follows years of litigation resulting from the 2006 arson.
In that year, Main Street purchased fire insurance with a policy limit of $14,750,000. Conditional on that coverage were stipulations requiring two “protective safeguards” – an Automatic Sprinkler System and an Automatic Fire Alarm.
In December, vandals set fire to the 10-story office building, and it was revealed that Main Street did not have a fire alarm system and may have misrepresented the presence of sprinklers. Still, a jury awarded the real estate firm $1.5 million, finding Kappauf guilty of breach of contract and negligence.
Kappauf, however, was able to present the case to a second jury, which reversed that decision. The appellate court sustained that opinion.
A new legal battle is currently playing out with regards to attorney fees. The court overturned a judge’s decision against awarding Kappauf over $227,0000 in fees, stating that Main Street rejected a “valid settlement offer” previously.
Main Street contends that this is “…inflated in various ways, or insufficiently document ed to assess their reasonableness.”
You may also be interested in: "Health insurer accused of illegal conduct"
"Court remains undecided on insurance agent's fiduciary duty"
"Sometimes it pays for a broker to keep their mouth shut"
