BACKGROUND  A hailstorm hit a gas station owned by MLLCA and damaged the roof of the station and the canopy over the gas pumps. MLLCA claimed insurer Argonaut. MLLCA organized a roofing company, RS Roofing, to submit an estimate for repairs. In its estimate, RS Roofing proposed repairing both the roof and the canopies for a flat rate of $ 193,000 but refused to provide Argonaut with sufficient details to analyze the appropriateness of the estimate. As a result, Argonaut requested a comparative bid and the independent contractor named Frank Walley evaluated the damage.
Walley returned a specified bid of $ 372,000 on April 6, 2016. After sharp back and forth (and the hiring of a roofing consultant to negotiate. Argonaut's account), Argonaut and Walley negotiated the total cost of repairs down to $ 235,000. They further agreed that the actual cash value of the damaged buildings, less depreciation, was $ 140,000. Under the policy, $ 140,000 would first be paid out, followed by additional payments to achieve a total of $ 235,000 when the repair was required.
MLLCA agreed to the plan, but at Walley's request, asked for control of the $ 140,000 paid jointly to MLLCA and Walley. When the check was received, MLLCA handed it to Walley. Walley returned some of the proceeds to MLLCA, did a few thousand dollars worth of repair work, and paid a company called Hunter Graphics $ 36,000 to begin repairing the canopies. Walley waived the remaining $ 95,000 and left the gas station in disrepair. costs for completed repairs. Since MLLCA had documented just over $ 80,000 in expenses – consisting of $ 36,000 and the approximately $ 45,000 that Walley and MLLCA had paid to Hunter Graphics – Argonaut concluded that it was not obligated to pay anything more than the $ 140,000 it had already paid out.  As MLLCA could not afford to repair the roof, it decided to sell the gas station. It then sued Argonaut, the adjuster and Walley, among others.
The case went to trial and the jury found against Argonaut on MLLCA's claims of fraud and deception through non-disclosure, breach of contract, insurance code violations, breach of the duty of good faith and fair trade and misleading trading practices. MLLCA chose to recover from its fraudulent commitments, for which the jury awarded $ 95,000 for unpaid benefits under the policy, $ 60,000 for lost profits, $ 50,000 to account for MLLCA's loss in selling the gas station below market price, 56,318.06 dollars in own costs and $ 500,000 in damages against Argonaut.
In order to prove fraud, a plaintiff must show that: (1) the defendant made a false, material representation; (2) the defendant knew that the statement was false or made it ruthless as a positive statement without any knowledge of the truth; (3) the defendant intended to persuade the plaintiff to act on the representation; and (4) the plaintiff rightly relies on the petition, which caused the plaintiff's harm. In order to establish the fourth element, the plaintiff must show that it actually relied on the defendant's representation and also that such an addiction was justified.
The evidence for causation was lacking. To begin with, it is important to note that Argonaut had nothing to do with choosing Walley to work on MLLCA's repairs. Rather, it was the independent adjuster who brought Walley into the mix, and it was MLLCA who kept him there when MLLCA retained Walley to carry out the repairs. Argonaut did not refer Walley directly to MLLCA, did not force the adjusting hand to send Walley to the gas station, did not force MLLCA to hire him, and did not support as much as Walley to work on the claim either explicitly or implicitly.  MLLCA's own store manager testified that he fulfilled that responsibility not by consulting Argonaut, but by researching online, and he was pleased enough with the research results that MLLCA made the independent decision to hire Walley. There was no direct evidence of intent to induce. If anything, Argonaut's course of action suggests that its main objective was to minimize the cost of hailstorm damage, even if it meant a certain amount of time lost and conflict with its policyholders.
There was no evidence, either direct or circumstantial, to support the causal link between MLLCA's fraud claim and the intent and liability of its non-disclosure fraud claim.
BREACH OF AGREEMENT
The parties seem to face most of the factual and legal grounds on the contract issue. The parties agreed on Argonaut's basic obligation to pay MLLCA $ 140,000, which represented the actual cash value of the damage. They also agreed that Argonaut paid MLLCA $ 140,000 and no more. However, the parties differ on whether MLLCA meets the compensation cost value clause.
The policy provides that when Argonaut pays for loss or damage on a compensation cost basis, Argonaut will not pay more than the lesser of the following: (1) the applicable insurance limit (which in this case was $ 470,000), (2) the compensation cost for the lost or damaged property (which the parties agreed was $ 235,000), or, in accordance with the provision on which this question is based, (3) "
As MLLCA's actual repair costs never exceeded $ 140,000, Argonaut was not liable to pay compensation cost value, and there is no evidence to support the jury's conclusion that Argonaut violated the agreement by failing to pay an additional $ 95,000.
Although MLLCA "actually" spent all $ 140,000 by giving it to Walley, it was not necessary for repairs or replacement. under politically clear meaning. Rather, the evidence reflects that MLLCA had only two sets of actual and necessary repair or replacement costs. First, it was $ 36,000 that Walley gave to Hunter Graphics to begin repairing the work on the canopies. Then there was about $ 45,000 that MLLCA gave Hunter Graphics to complete repairs to the canopies.
There was no evidence that MLLCA necessarily spent more than $ 140,000 on repairs. Under these circumstances, nothing in the insurance obliged Argonaut to pay more than it already had.
INSURANCE CODE AND CUSTOMS FOR GOOD FAITH AND BAD ACTION
There are only two ways an insured can take to determine the damages caused by an insurer's breach of the insurance code or the duty in good faith and fair trade (1) "a right to benefits under the insurance" or (2) "an injury independent of the right to benefits."  Because Argonaut paid all benefits to which MLLCA was entitled under the policy; MLLCA was not entitled to any additional benefits in addition to what Argonaut paid in the first installment of $ 140,000. Therefore, no reimbursement of additional insurance benefits could be made in the name of the insurance code or the duty in good faith. To win, it was the MLLCA's obligation to show any damage regardless of the loss of insurance benefits.
MLLCA could not recover from an injury regardless of the insurance benefits. The evidence was legally insufficient to support any recovery under the MLLCA's claim for breach of the Code of Conduct or the duty of good faith and fair trade. all amounts under the policy in addition to what it had already received (and what Walley had unfortunately stolen). The evidence was legally insufficient to support the recovery of any of the theories that MLLCA raised before the jury, and MLLCA's cross-appeal is not available. The judgment of the trial court was set aside and the judgment was reached that MLLCA did not take anything.
MLLCA was damaged by the selection of the selected contractor by the money they received from Argonaut which it voluntarily handed over to the thief. Unable to find Wally, they sued their insurance company and convinced a jury that the insurer would pay for the losses due to MLLCA's own fault when he signed his ACV payment to a thief rather than checking his expenses. The jury made a mistake and the Court of Appeal overturned the unjustified decision to punish the insurer for the insured's fault. an insurance consultant who specializes in insurance coverage, handling insurance claims, cheating and insurance fraud almost equally 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 a lawyer for insurance coverage and claims handling and more than 52 years in the insurance industry. He can be found at http://www.zalma.com and email@example.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 claims staff to become insurance claims staff.
Go to the podcast Zalma On Insurance at https://anchor.fm/barry-zalma; Follow 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 the library for insurance claims – https://zalma.com/blog/insurance-claims-  bibliotek / Read posts from Barry Zalma at https://parler.com/profile / Hymn / post; and the last two issues of ZIFL 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