Don Burton, Inc. And Don Burton, Individually v. Aetna Life & Casualty Company

On July 1, 1973, a shoe store owned by Don Burton, Inc., a California corporation, and operated by Don Burton, the individual plaintiff below, burned down. This was one of several retail shoe stores operated by Burton in the Sacramento area. At the time of the fire, insurance policies issued by Aetna Life & Casualty Company (“Aetna”), a Connecticut corporation, were in effect, covering the stock, equipment, fixtures, and personal property at the various locations in which Burton conducted business. Aetna assigned a claims representative to the case and a timely proof of loss was filed by Burton on August 31, 1973. Because of certain unresolved disputes over substantiation and documentation of the claims and the effect of a requested, but apparently unexecuted reduction of the policy limits by the insured from $115,000 to $3,500 in the month prior to the fire, Aetna withheld payment on the claim.

This action was commenced in the Municipal Court of the State of California when the insured’s brokerage filed a claim against Burton for premiums owing. In a cross-complaint against Aetna, Burton sued for actual damages under his policies, consequential damages arising out of Aetna’s…