Liberty Transport, Inc. v. Harry W. Gorst Co., B045194

CourtCalifornia Court of Appeals
Citation280 Cal.Rptr. 159,229 Cal.App.3d 417
Decision Date17 April 1991
Docket NumberNo. B045194,B045194
PartiesLIBERTY TRANSPORT, INC., Plaintiff and Respondent, v. HARRY W. GORST COMPANY, INC., and Insurance Companies, Defendants and Appellants.

Page 159

280 Cal.Rptr. 159
229 Cal.App.3d 417
LIBERTY TRANSPORT, INC., Plaintiff and Respondent,
HARRY W. GORST COMPANY, INC., and Insurance Companies, Defendants and Appellants.
No. B045194.
Court of Appeal, Second District, Division 7, California.
April 17, 1991.
Review Denied July 10, 1991.

[229 Cal.App.3d 423] Wilson, Elser, Moskowitz, Edelman & Dicker and Patrick M. Kelly, Jonathon Sher and Lynda M. Sauer, Los Angeles, for defendants and appellants English and American Ins. Group, PLC and other Companies (erroneously sued as "Underwriters at Lloyds") and Harry W. Gorst Co., Inc.

Mills & Schroeder and John Schroeder, Pasadena, for plaintiff and respondent.

[229 Cal.App.3d 424] JOHNSON, Associate Justice.

Defendants and Appellants, Harry W. Gorst Company, Inc. and insurance companies, English and American Group PLC, Terra Nova, Excess Insurance Group and Bishopgate (insurance companies), appeal from a judgment entered after a jury verdict in favor of plaintiff and respondent, Liberty Transport, Inc. Because there is at least one cause of action free from error and supported by substantial evidence, and because appellants' other assignments of error do not warrant reversal, we affirm the judgment awarding contract, compensatory and punitive damages.


On December 31, 1982, George Stevenson, an employee of respondent, Liberty Transport, Inc. (respondent), loaded a truck shipment of produce in Nogales, Arizona to transport to New York. Mr. Stevenson received an advance of $1,000 for the trip. On January 1, 1983, Mr. Stevenson cashed a check and purchased fuel for the truck in Roswell, New Mexico. There was conflicting testimony as to whether Roswell was or was not on the ordinary route from Nogales to New York. Pat Hardin, president of respondent corporation, speculated Stevenson traveled to Amarillo, Texas from Nogales, Arizona to visit his family. However, Mr. Stevenson's family had moved from Amarillo to Florida and the telephone number in Amarillo had been disconnected as of January 1983.

Despite efforts with the local police, F.B.I., Texas Highway Patrol, relatives, various truck drivers and trucking companies, Mr. Stevenson was not located. He was still missing at the time of trial six and one half years later.

On January 10, 1983, the tractor of the truck driven by Mr. Stevenson was found on fire in Mineral Wells, Texas. The Texas Highway Patrol reported the trailer, cargo and driver were missing.

Mineral Wells, Texas was off the normal route to New York. Respondent immediately notified the local insurance agent of the loss. This agent in turn reported the loss to appellant, Harry W. Gorst Companies, Inc. (Gorst).

The insurance policy involved in this case provided coverage for stolen property, but excluded property stolen by an employee of the insured. This policy also afforded coverage for vandalism or malicious mischief, regardless of whether an employee of the insured vandalized the property.

Gorst acted as the insurance companies' agent in issuing the subject policy and in processing respondent's claim. Mr. Lemon, Vice President of [229 Cal.App.3d 425] Gorst, assigned the Frontier Adjusting Agency to investigate the loss. An investigation of the tractor fire resulted in a determination the fire was deliberately set. The report concluded with two hypotheses: "1) The reported driver of this rig, has been kidnapped and/or murdered and the trailer and load sold and the tractor burned. 2) Mr. Stevenson is still at large and is responsible for the missing trailer and load as well as the fire in question." In February and March 1983, the insurance companies instructed Gorst to have a skip trace investigation conducted in an attempt to locate Mr. Stevenson. In response, Gorst instructed the Frontier Adjusting Agency to perform the skip trace and follow up on a forwarding address for Mr. Stevenson in Florida. Mr. Lemon of Gorst could not testify as to whether the skip trace search was ever done.

In March of 1983, the insurance companies were inclined to deny liability and requested local counsel, David Parsons (Parsons), to render a coverage opinion concerning the tractor and trailer claims. The matter was assigned to Mr. Parsons for review upon the suggestion of Mr. Lemon of Gorst.

In July of 1983, seven months after the claim was filed, Gorst was instructed by the insurance companies to issue payment to respondent with respect to the tractor claim. Gorst did make the payment to respondent but did not also communicate the fact the trailer claim was to be denied. Gorst did not deem it appropriate to relay this information to respondent because the insurance companies had retained counsel to advise and communicate on their behalf.

At the same time, Parsons was instructed to deny the trailer claim. However, Parsons failed to do so despite the insurance companies' instructions.

On October 21, 1983, Pat Hardin, on behalf of respondent, wrote to Mr. Lemon of Gorst to inquire as to the status of the trailer claim and to demand immediate payment. Mr. Lemon of Gorst forwarded this letter to the insurance companies in London without communicating with respondent. This prompted the insurance companies to instruct Parsons to deny the trailer claim immediately. During this period, respondent and respondent's insurance agent made telephonic inquiries of Gorst as to the status of respondent's claim. Despite knowledge the claim was to be denied, Gorst never communicated this information to respondent or its agent.

On April 4, 1984, fifteen months after the claim was filed, Mr. Parsons sent a letter to respondent advising the company it had not met its burden of establishing the trailer had been stolen by a third party so as to bring the claim within the insuring clause of the policy. In addition, Parsons advised [229 Cal.App.3d 426] respondent, based upon available information, the facts suggested if the trailer was stolen, it was stolen by Mr. Stevenson which would result in no coverage under the employee theft exclusion.

Respondent then retained counsel who wrote letters to Parsons challenging the propriety of the denial letter and demanding payment. Parsons never responded.

Respondent filed its original complaint on April 4, 1985 alleging causes of action for breach of the implied covenant of good faith and fair dealing, breach of fiduciary duty, fraud and violations of Insurance Code section 790.03 against Lloyd's of London, Horncastle, Crawford & West, Ltd. and Doe defendants 1 to 20, insurers and the broker for an insurance policy unrelated to the parties or policy involved in this case. 1 The erroneous insurance policy was attached to the original complaint. The original complaint was never served on any defendant.

On October 6, 1986, a second complaint was filed against appellants alleging the same causes of action. Attached to this complaint was the policy of insurance brokered by Gorst and issued by the insurance companies. Appellants were not served as Doe defendants designated in the first complaint.

At the conclusion of plaintiff's case, appellants moved for a non-suit with respect to all non-contractual claims on the ground the second complaint was filed after the expiration of the applicable statutes of limitations. The trial court denied appellants' motion on the ground, despite different defendants and different policies, the second complaint related back to the date of filing the original complaint because the first complaint "pled within it the facts which were covered in the second complaint filed in 1986."

After the close of the presentation of evidence, respondent was allowed to amend the complaint to allege a cause of action for breach of the insurance contract against the insurance companies. Neither Parsons nor insurance company representatives testified at trial.

The jury returned a unanimous verdict in favor of respondent and against the insurance companies on the contract claim for $18,000 plus interest of [229 Cal.App.3d 427] $11,795.46; compensatory damages of $82,500 on the combined bad faith claims jointly against Gorst and the insurance companies; and, punitive damages of $400,000 and $40,000 against the insurance companies and Gorst respectively. The trial court imposed a cost award of $4,660.20 but denied respondent's request for attorneys' fees.

Appellants then filed a motion for new trial and for judgment notwithstanding the verdict on the bases the statute of limitations barred the non-contractual claims; there was insufficient evidence to support an award of punitive damages; and the punitive damage award was excessive. Both motions were denied and this appeal followed.



As indicated above, the judgment for compensatory damages was entered on a general jury verdict. This greatly simplifies our task on appeal because it is well established "[w]here several counts or issues are tried, a general verdict will not be disturbed by an appellate court if a single one of such counts or issues is supported by substantial evidence and is unaffected by error...." (Posz v. Burchell (1962) 209 Cal.App.2d 324, 335-336, 25 Cal.Rptr. 896; see also, Louisville Title Ins. Co. v. Surety Title & Guar. Co. (1976) 60 Cal.App.3d 781, 786, 132 Cal.Rptr. 63; McCloud v. Roy Riegels Chemicals (1971) 20 Cal.App.3d 928, 935-936, 97 Cal.Rptr. 910.) "This rule requires that we assume the jury found on the cause of action which is supported by substantial evidence and is free of error." (Khanna v. Microdata Corp. (1985) 170 Cal.App.3d 250, 258, 215 Cal.Rptr. 860; see also, McCloud, supra, 20 Cal.App.3d at p. 936, 97 Cal.Rptr. 910.)

Thus, our review in this appeal is narrowly circumscribed: we are merely required to find one of the four non-contractual causes of...

To continue reading

Request your trial
27 cases
  • Qualls v. Regents of the Univ. of Cal., Case No. 1:13-CV-00649-LJO-SMS
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • April 3, 2014
    ...the amended complaint is filed, not the date the original complaint is filed. (Liberty Transport, Inc. v. Harry W. Gorst Co. . (1991) 229 Cal.App.3d 417, 428, 280 Cal.Rptr. 159 ...; disapproved on other grounds in Adams v. Murakami (1991) 54 Cal.3d 105, 115-116, 284 Cal.Rptr. 318, 813 P.2d ......
  • Las Palmas Associates v. Las Palmas Center Associates, B051688
    • United States
    • California Court of Appeals
    • November 5, 1991
    ...of scrutiny as found in the Alabama review process. 9 (See Liberty Transport, Inc. v. Harry [235 Cal.App.3d 1259] W. Gorst. Co. (1991) 229 Cal.App.3d 417, 441, 280 Cal.Rptr. 159.) It is only when the award exceeds the amount needed to accomplish the goal of punishment and deterrence that an......
  • Mock v. Michigan Millers Mutual Ins. Co., B048249
    • United States
    • California Court of Appeals
    • March 4, 1992
    ...v. Maryland Casualty Co., supra, 217 Cal.App.3d 1566, 1576, 267 Cal.Rptr. 24 and Liberty Transport Inc. v. Harry W. Gorst Co. (1991) 229 Cal.App.3d 417, 436-437, 280 Cal.Rptr. 159, disapproved on another point in Adams v. Murakami (1991) 54 Cal.3d 105, 116, 284 Cal.Rptr. 318, 813 P.2d 1348.......
  • Manufacturers Life Ins. Co. v. Superior Court, s. A052795
    • United States
    • California Court of Appeals
    • July 29, 1994 dicta, uncritically accepted Greenberg 's view of UIPA exclusivity. The court in Liberty Transport Inc. v. Harry W. Gorst Co. (1991) 229 Cal.App.3d 417, 432, 280 Cal.Rptr. 159, disapproved on another point in Adams v. Murakami (1991) 54 Cal.3d 105, 116, 284 Cal.Rptr. 318, 813 P.2d 1348, ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT