Smith v. Financial Pacific Ins. CA2/5

INTRODUCTION

In this insurance coverage and bad faith action, we consider two different insurance policies. Plaintiff Marshall Smith, while riding a motorcycle, was injured in a collision with an SUV driven by Luke Gardner. Gardner’s insurer accepted the claim and is not a party here. At issue is insurance provided to Gardner’s father-in-law, Gerry Paddock, who was held vicariously liable for Gardner’s negligence. Paddock was the sole proprietor of two businesses which operated under fictitious names.1 One, a construction business, was Carmel Valley Construction. The other, a cattle ranching business, was Paddock Land & Cattle. Prior to the automobile accident, Paddock had suffered a stroke and was unable to handle the day- to-day affairs of Paddock Land & Cattle. His daughter, Emily, was his ranch manager. On the day of the accident, Emily had requested her husband, Gardner, to drive the SUV to some leased land and take care of the cattle. Gardner, who was not an employee of Paddock, agreed. He collided with motorcyclist Smith on his way to the property. At the time of the accident, Paddock had policies from two different insurers. Travelers Property Casualty Company of America…