Procedural Posture

Appellants, other insurers, challenged the judgment of the Superior Court of the City and County of San Francisco (California), which ordered appellants to pay cross-appellant, the insurer who

Appellants, other insurers, challenged the judgment of the Superior Court of the City and County of San Francisco (California), which ordered appellants to pay cross-appellant, the insurer who provided defense, a portion of the expenses incurred in defending the insured. Cross-appellant sought review of the method of apportionment and payment for its own attorneys' fees incurred in this action for equitable contribution.

Overview

Appellants, other insurers, and cross-appellant, insurer who provided defense, jointly insured a corporation. Claims were brought against insured for antitrust violations and intentional interference with contractual relationships. Cross-appellant provided a defense and sought contribution from appellants. The court found that appellants had a duty to provide a defense because the facts created potential liability under the policies. Appellants improperly refused the defense because they failed to investigate the facts alleged that gave rise to potential liability. Furthermore, the complexities of antitrust litigation left open the possibility of the complaint being amended to included items covered under the policies. Insured's failure to notify appellants that a portion of the complaint was dropped was not material concealment affecting the duty to provide a defense. The court affirmed the judgment, holding that appellants were jointly responsible for defending insured and that the cost of defense was apportioned according to the coverage amounts of each policy. Cross-appellant was not in a contractual relationship with appellants and had no standing to request attorney fees. The parties consulted with several counsel which included labor law attorney and business counsel.

Outcome

The court affirmed the judgment of the trial court requiring appellants, other insurers, to pay a portion of the cost of defending insured because appellants had an obligation to defend their insured and the apportionment was properly based upon their respective coverage amounts. Attorneys' fees for cross-appellant, insurer who provided defense, were denied because there was no contractual relationship giving standing to request the fees.

Procedural Posture

Plaintiffs, parents and child, sought review of the judgment from the Superior Court of the City and County of San Francisco (California), which granted defendant blood bank judgment notwithstanding the verdict on a negligence claim, reduced the jury award on the negligent misrepresentation claim, granted defendant hospital nonsuits, and directed verdict incident to plaintiff child's infection with the AIDS virus from blood transfusions.

Overview

Plaintiffs, parents and child, brought suit against defendants, blood bank and hospital, alleging various tort and contract claims incident to plaintiff child acquiring the AIDS virus from a blood transfusion during surgery. All claims against defendant hospital were dismissed by grant of nonsuit or directed verdict. Defendant blood bank was granted judgment notwithstanding the verdict on the negligence and intentional misrepresentation claims, and was conditionally granted a new trial on negligent misrepresentation, subject to plaintiffs' approval to a reduced award. The court affirmed the trial court in all matters, except in reversing judgment on the negligent misrepresentation and ordered a new trial. The court ruled that the trial court committed prejudicial error in failing to admit plaintiff child's rare blood type, because such evidence was relevant to show proximate cause on whether there was substantial evidence that direct donation would have prevented the contraction of the AIDS virus. The court found that defendant blood bank was not negligent, because there was no substantial evidence that anti-HBc testing was the accepted practice by other blood banks at the time.

Outcome

Judgment notwithstanding the verdict on negligence claim was affirmed, because defendant blood bank was following the accepted practices of the profession at the time, and judgment on negligent misrepresentation claim was reversed, because the trial court erroneously excluded plaintiff child's rare blood type, which was relevant to proximate cause determination on whether direct donations would have prevented the contraction of the AIDS virus.


harvey bentz

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