Fresno School District Awarded $13 Million In Bad Faith Suit

October 11, 2000

A 12-member jury awarded the Fresno Unified School District $13 million in punitive damages Oct. 6, in its bad faith suit against Coregis Insurance Company, a GE Capital Company, and subsidiary of General Electric Co. Judge Michael S. Ullman presided over the trial, which began Sept. 20 in Sacramento Superior Court.

On Oct. 2, the plaintiff’s motion for directed verdict was granted, and the FUSD was awarded $972,000 in damages.

“Coregis denied insurance coverage to the Fresno Unified School District,” said FUSD attorney Stephen D. Lucas, “Even though it knew for a fact that its policy with the district covered discrimination claims. To add insult to injury, Coregis tried to hide from the district the fact that it had litigated and lost similar suits on the issue of coverage on claims made by school districts in San Diego County.”

Faced with discrimination claims in 1994 and 1996, the FUSD requested that Coregis defend the cases under its insurance policy. The company took the position that it did not have to defend or indemnity the plaintiff because all discrimination claims involved intentional conduct. According to FUSD attorneys, Coregis ignored prior adverse court rulings finding coverage for discrimination claims, and, instead, continued issuing the same blanket form letter denying the claims in both matters

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