California Verdicts

Plaintiff(s):

Victaulic Company

Plaintiff Attorney(s):

Joseph D. Jean;
Pillsbury Winthrop Shaw Pittman LLP;
New York,
NY,
for
Victaulic Company ■ Colin T. Kemp;
Pillsbury Winthrop Shaw Pittman LLP;
San Francisco,
CA,
for
Victaulic Company ■ Jeffrey A. Kiburtz;
Pillsbury Winthrop Shaw Pittman LLP;
Los Angeles,
CA,
for
Victaulic Company

Defendant(s):

American Home Assurance Company, 

The Insurance Company of the State of Pennsylvania, 

National Union Fire Insurance Company of Pittsburgh, PA

Defense Attorney(s):

William J. Goines;
Greenberg Traurig LLP;
East Palo Alto,
CA,
for
American Home Assurance Company, The Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA ■ Karen Rosenthal;
Greenberg Traurig LLP;
East Palo Alto,
CA,
for
American Home Assurance Company, The Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA ■ Agelo L. Reppas;
Sedgwick LLP;
Chicago,
IL,
for
American Home Assurance Company, The Insurance Company of the State of Pennsylvania, National Union Fire Insurance Company of Pittsburgh, PA

In 2012, plaintiff Victaulic Co., a leading mechanical pipe fitting manufacturer, was named as a defendant in a litigation brought by its insurer, American International Group (AIG) Inc. Victaulic was first issued commercial general liability insurance from three AIG companies — American Home Assurance Co., National Union Fire Insurance Company of Pittsburgh, PA, and Insurance Company of the State of Pennsylvania — in 1998. However, when nine actions were brought against Victaulic in California, Colorado, Oregon, Washington, Massachusetts and West Virginia, the three AIG companies sought to avoid coverage. As a result AIG first initiated litigation against Victaulic in Pennsylvania in 2012, claiming it had no duty to defend or indemnify Victaulic against liability claims in which there was alleged property damage caused by allegedly faulty workmanship and/or alleged product defects regarding Victaulic’s product because such claims do not constitute an occurrence under the policies. Victaulic and the three AIG companies disagreed about the defense and indemnity coverage provided under the policies. Victaulic subsequently sued American Home Assurance Co., National Union Fire Insurance Company of Pittsburgh, PA, and The Insurance Company of the State of Pennsylvania, in California. The trial was divided into three phases. Prior to the commencement of Phase I, the court granted Victaulic’s motion for summary adjudication, holding that faulty workmanship and faulty products constitute an occurrence under the subject insurance policies as a matter of law. Phase I of the trial also resolved declaratory and equitable issues in favor of Victaulic, such as the existence and scope of the duty to defend and the existence of the duty to indemnify. Victaulic alleged that the underlying nine actions brought against it raised claims based on occurrences, regardless of whether Pennsylvania or California law applied. On June 10, 2015, the court found for Victaulic and determined that AIG had a duty to defend and indemnify Victaulic in the underlying actions. During Phase II, Victaulic alleged that the AIG companies breached their contract to provide insurance coverage under the policies and that their breaches were in bad faith and in violation of good faith and fair dealing. The three AIG companies contended that they did not breach the policies and that their conduct was not in bad faith. Leading up to trial, plaintiff’s counsel obtained substantial sanctions against AIG for willful discovery abuses in the litigation.

Victaulic sought recovery of damages for the AIG companies’ breach of contract, and recovery of attorney fees for forcing the AIG companies to comply with their contract obligations. Specifically, Victaulic sought recovery of $9,333,581.14 in contract damages and attorney fees. During Phase III of the case, Victaulic sought recovery of punitive damages.

The jury found that the AIG companies breached the insurance contracts and that Victaulic was harmed by the failures. It also found that the AIG companies breached the implied covenant of good faith and fair dealing. On July 30, 2015, the jury determined that Victaulic’s damages for the AIG companies’ breach of contract and bad faith totaled $9,333,581.14. It also determined that the AIG companies acted with malice, oppression or fraud. A week later, on Aug. 5, 2015, the jury awarded Victaulic $46 million in punitive damages. Thus, Victaulic’s recovery totaled $55,333,581.14, plus interest and costs.

Judge:

Frank Roesch

Trial Length:

11
 weeks

Post Trial:

Following the trial, the court awarded Victaulic an additional $5,494,417.89 due to plaintiff’s counsel proving that the AIG companies falsely denied more than 40 requests for admission.

This report is based on information that was provided by plaintiff’s counsel. Defense counsel did not respond to the reporter’s phone calls.