HomeMy WebLinkAboutCC 6 CLAIM FREEMONT 05-05-80DA TE:
APRIL 25, 1980
CONSENT CAT.V. NDAR
NO. 8
5-5-80
Inter-Corn
TO:
FROM:
SUBJECT:
HONORABT~ MAYOR AND CITY COUNCIL
JAMES G. ROURKE, CITY ATTORNEY
DANIEL K. SPRADLIN, DEPUTY CITY ATTORNEY
CITY OF TUSTIN v. FREMONT INDEMNITY COMPANY, et al.
On October 26, 1979, this office initiated action against Fremont
Indemnity Company, MGA Insurance Marketing, The Mutual Fire, Marine
and Inland Insurance Company, Shand, Morahan & Co., Inc. and Cal-
Surance Associates, Inc., all insurance companies or insurance brokers,
to recover excess premium amounts collected by said companies for
continued coverage following non-renewal of said policies for claims
made against the City of Tustin during the 24 calendar months
immediately following the non-renewal of the policies.
Recently we have had settlement negotiations with the attorneys for
The Mutual Fire, Marine and Inland Insurance Company which collected
an excess premium amount from the City of Tustin of $7,490.26. This
company has offered to compromise by a refund to the City of Tustin
in the total sum of $5,618, or approximately 75% of the premium
amount collected, or a difference of approximately $1,800. Attorneys
for The Mutual Fire, Marine and Inland Insurance Company are
authorized to immediately settle this portion of the case for that
amount. We believe that this compromise is fair in that the excess
liability policy which had been offered by The Mutual Fire, Marine
and Inland Insurance Company does not contain the express terms for
the renewal of the insurance policy contained in the primary policy
offered by the Fremont Indemnity Company. We believe that the costs
of pursuing the matter to trial would exceed the difference of
approximately $1,800 offered as a compromise and therefore reco£~m~end
its acceptance.
We therefore request that the City Administrator be authorized to
execute appropriate~retease agreements and that the City Attorney be
authorized to execute a Request for Dismissal as to The Mutual Fire,
Marine and Inland Insurance Company and Shand, Morahan & Co., Inc.
With respect to Fremont Indemnity Company and Cal-Surance Associates,
Inc., we have discussed the possibility of settlement with the
attorneys for Fremont who have indicated to us that they have
recommended a refund of the entire excess premium of $9,073 to their
clients. We are, at present, awaiting the Fremont Indemnity Company's
response to their attorneys' recommendation.
DKS:cs:D:04/21/80
cc: City. Administrator