Gordon Rees Scully Mansukhani Partner David Jones and Senior Counsel Steven Inouye obtained a second defense award in Sonoma County following a bench trial in an insurance policy reformation lawsuit filed in connection with the 2017 Tubbs wildfire.
Following the fire, the plaintiffs alleged that their insurance agent had promised to obtain sufficient insurance coverage to entirely rebuild their home “as is” in the event of a fire. The plaintiffs’ claims were bifurcated into separate trials against their agent and their insurer.
The first trial involved a five-week jury trial regarding the plaintiffs’ professional negligence claim against their insurance agent. In January 2023, the defense team successfully obtained a complete defense verdict in favor of the agent. The initial jury trial win was covered here.
In the subsequent bench trial, the plaintiffs sought equitable relief from the court seeking to reform their insurance policy. The plaintiffs claimed that their policy did not accurately reflect the agent’s oral promise that the policy limits would either be sufficient to fully rebuild or the limits would not apply. The plaintiffs’ key witness was a reconstruction cost estimating expert who testified that the software used throughout the insurance industry was defective and consistently undervalued homes. The plaintiffs’ expert further testified that the insurer and the agent knew the software was not accurate or reliable, but they failed to share this information with the plaintiffs before the fire.
In their pre-trial motions, the defense team was able to preclude the plaintiffs’ expert from testifying before the jury and significantly limited the scope of his testimony before the court. The team presented evidence that the plaintiffs knew that their insurance policy was subject to certain limits which represented the maximum amount of coverage available for a loss. The team also presented evidence that there was no mutual mistake, no unilateral mistake, or misrepresentation regarding the coverage limits available under the policy. In addition, the defense team argued that no reformation was necessary because the plaintiffs had already received sufficient policy limits to rebuild. After taking the matter under submission, the court denied plaintiffs’ reformation claim and issued a lengthy statement of decision in favor of the insurer.