Tan Jay International, Ltd. v. Canadian Indemnity Co.

Introduction

Plaintiffs Tan Jay International, Ltd. (Tan Jay) and Peter Nygard (the insureds) filed a complaint for damages, breach of contract, emotional distress and declaratory relief against the insurer, defendant Canadian Indemnity Company (Canadian), alleging bad faith refusal to defend and indemnify plaintiffs in a third-party action. Both compensatory and punitive damages were sought.

Defendant Canadian cross-complained against Tan Jay, Nygard, the third-party plaintiff" Douglas Michaelson, Viking Holding Company and Does. The first two causes of action sought declaratory relief and the second two causes of action sought indemnity from defendant Canadian’s insured, Peter Nygard.

Plaintiffs demurred to the cross-complaint. Cross-complainant attempted to amend the cross-complaint, and finally dismissed the third and fourth causes of action against Nygard. Plaintiffs moved for an early trial date; their motion was granted. Defendant Canadian filed a motion for summary judgment as to both the complaint and cross-complaint; plaintiffs sought summary adjudication of issues without substantial controversy. The motions were consolidated for hearing; the motions of both…