Michael von Loewenfeldt and Jocelyn Sperling have secured a significant victory in the California Court of Appeal’s First Appellate District on behalf of RMB Real Estate Investments 2, LLC, whose apartment complex was destroyed in the 2017 Tubbs Fire. After RMB’s insurer denied a claim for less than $2 million in lost business-income sought under the policy, RMB sued for breach of contract and bad faith denial in the Sonoma County Superior Court. A jury awarded RMB all of the policy benefits it sought plus bad faith damages, including $6.5 million in punitive damages, for a total of nearly $9.5 million.
On appeal, the insurer challenged the interpretation of the policy, the compensatory damages award, the bad-faith finding, and the punitive damages award. The Court of Appeal rejected nearly all of those challenges, affirming the trial court’s interpretation of the insurance policy and the jury’s findings of damages, bad faith, and malice. The court reduced the amount of punitive damages on constitutional grounds from $6.5 million to approximately $3.8 million (10 times the bad faith damages), leaving a judgment for RMB of nearly $6.8 million before post-judgment interest. The court also awarded RMB its attorney’s fees on appeal.
You can read the decision in RMB Real Estate Investments 2, LLC v. California Capital Insurance Company by clicking here.