Monthly Archives: October 2013

Self v. Sharafi- the viability of deed restrictions

Self v. Sharafi

Another interesting case today with the lesson being if you know something odd about a piece of property, consider your options.

In 1945, property was sold in La Jolla.  The seller retained a portion and agreed, in the deed, not to build anything on the retained portion.

In 1989, the Selfs purchased the retained portion.  Their deed did not include the restriction, but they knew of it.  In 2011, they sued their neighbor to get a judicial declaration that the restriction was invalid and unenforceable.  The trial court agreed and entered summary judgment for the Selfs.

The court of appeals reversed, entering summary judgment for the neighbor.  The court concluded that the deed restriction was a covenant running with the land and not a personal obligation of the 1945 seller, making it applicable to all successors in interest of the seller.

Property in La Jolla is very expensive and it is very likely that the Selfs valued the property much higher than a park or open space.  The real question is why they bought it in the first place.

Aguilar v. Gostichef- An uncommunicative carrier gets punished.

Aguilar v. Gostichef.

This case involved a motor vehicle accident with serious injuries.  The defendant had a liability policy with a $100,000.00 limit.  The plaintiff had over $500,000.00 of medical expenses.

Before filing suit, the plaintiff’s attorney asked for the policy limits so that he could make a policy limits demand and resolve the suit.  The carrier ignored this request and two others, forcing the plaintiff to file suit.

After filing suit, the carrier offered its full policy limits in settlement.  The plaintiff responded with a threat that the carrier would be responsible for any judgment in excess of the policy limits because it ignored the prior requests, later submitting a $700,000.00 offer to compromise pursuant to California Code of Civil Procedure Section 998.   The carrier responded by re-offering the policy limits.

The trial verdict was in excess of $2.3M.  One benefit of a 998 offer is that if the offering party does better at trial, then it can get prejudgment interest and expert witness fees from the date of the offer.  In this case, the recoverable costs exceeded $1.6M.  The carrier challenged the reasonableness of the 998 offer, but the appellate court rejected the arguments.

Few people would fell sorry for an uncommunicative insurance carrier hoping that a squeaky wheel of a plaintiff’s counsel might just go away.  This case compels carriers to fulfill their duty to settle at the earliest juncture.  The outcome, however, is quite harsh.  The carrier should have been able to avoid the consequences of rejecting a policy limits demand when it offered to settle for the policy limits two months after the plaintiff filed suit.  Some applaud harsh treatment of insurance carriers, but this one does not have the type of wilful misconduct that should turn a $100,000.00 insurance policy into a $1.6M payment to a plaintiff.