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Comunale v. Traders & General Ins. Co



See the full video and the full text of the case at https://youtu.be/A0I909NN-nI and at https://rumble.com/c/c-262921 [19659004] Highest the Court of California Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 328 P.2d 198, held the insurer liable for amounts that exceeded the insurance limit due to its erroneous refusal to settle the underlying measure. The opinion distinguishes between the consequences of an unlawful refusal to settle and an unfair refusal to defend, and points out that the insurer's liability is usually limited to the amount of the insurance plus lawyers' fees and costs.

Mr. and Mrs. Comunale were met in a marked pedestrian crossing by a truck driven by Percy Sloan. Mr Comunale was seriously injured and his wife suffered minor injuries. Sloan was insured by the corresponding Traders & General Insurance Company under an insurance policy that included liability limits of $ 10,000 for each person injured and $ 20,000 for each accident. He informed the traders about the accident and was told that the insurance did not provide coverage because he was driving a truck that did not belong to him. When Comunales brought an action against Sloan, Traders refused to defend the action and Sloan hired a competent lawyer to represent him. On the second day of the trial, Sloan Traders announced that Comunales would compromise the $ 4,000 case, that he did not have enough money to carry out the settlement and that it was very likely that the jury would overturn a verdict that exceeded political limits. Traders were obliged to defend all personal injury costs covered by the insurance, but it was given the right to make such a settlement as it deems appropriate. Sloan demanded that traders adopt the defense and the decision of the case. Traders refused, and the trial was adjudicated in favor of Mr Comunale for $ 25,000 and Mrs Comunale for $ 1,250.

The decisive factor in determining the extent of traders' liability is not the refusal to defend; it is the refusal to accept an offer of settlement within the political boundaries. If there is no possibility to jeopardize the claim and the insurer's only wrongful act is the refusal to defend, the insurer's liability is usually limited to the sum insured plus lawyers' fees and costs.

Comunale v. Traders & General Ins. Co., 328 S.2d 198, 50 Cal.2d 654, 68 ALR2d 883 (Cal. 1958)

The video covers the entire text of California's Supreme Court decision.

This is the first case that created torture of bad faith and made it possible for a person to obtain both a contract and damages as a result of a bad faith refusal to defend and or resolve a claim within political boundaries. It is imperative that everyone interested in insurance claims knows the full text of the case that started the creation of the evil.


© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage, insurance claims handling, bad faith insurance and insurance fraud almost as much for insurers and policyholders.

He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance and claims management attorney and more than 54 years in the insurance industry.

He is available at http://www.zalma.com and zalma@zalma.com. Mr. Zalma is the first recipient of the first annual Claims Magazine / ACE Legend Award. For the past 53 years, Barry Zalma has devoted his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to enable insurers and their indemnity staff to become insurance professionals.

Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow Mr. Zalma on Twitter at https://twitter.com/bzalma ; Go to Barry Zalma videos on Rumble.com at https://rumble.com/c/c-262921; Go to Barry Zalma on YouTube- https://www.youtube.com/channel/UCysiZklEtxZsSF9DfC0Expg; Go to Insurance Claims Library-https: //zalma.com/blog/insurance-claims-library/ T the last two issues of ZIFL are available at https://zalma.com/zalmas-insurance-fraud- letter -2 / podcast now available at https://podcasts.apple.com/us/podcast/zalma-on-insurance/id1509583809?uo=4


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