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(A
version of this article will appear in the California Construction
Law Reporter, published by the West Group.)
By James E. Acret
Santa
Susana was performing a contract to replace pipe culverts
for the County of Los Angeles when it caused damage to neighboring
property. Gulf was the surety on Santa Susana's performance
bond, and TIG was the carrier of its liability insurance.
When Santa Susana failed to repair the damage, the county
declared Santa Susana in default and called upon Gulf to
perform. Gulf then employed a contractor to repair the damage
and filed a claim, as subrogee, against TIG under the liability
policy. TIG rejected the claim, and Gulf filed suit for
breach of the insurance contract and also asserted a cause
of action for bad faith. The trial court sustained TIG's
demurrer to the bad faith cause of action and, after trial,
awarded Gulf a judgment of $43,593 against TIG.
Affirmed
in Gulf Insurance Co. v. TIG Insurance Co., ___ Cal.App.4th
___, ___ Cal.Rptr.2d ___, 2001 Daily Journal D.A.R. 747
(2001).
Gulf,
having satisfied Santa Susana's obligation, became subrogated
to its rights under the insurance policy issued by TIG.
However, Gulf could not pursue a bad faith claim against
TIG because TIG's alleged wrongful conduct did not result
in any injury to the insured. (The Court of Appeal also
affirmed the trial court's implied finding that Gulf had
given proper notice of the claim to Pinnacle Insurance Services,
which was properly held to be an agent of TIG.)
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©2001 Thelen Reid Brown Raysman & Steiner LLP
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