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Sprague v. California Pacific Bankers & Insurance Ltd.

12/27/2001

lement and the insured is entitled to negotiate a reasonable and good faith settlement of the underlying claim.


The stipulated judgment may be considered as evidence of the Millards' damages if it resulted from a good faith settlement and the settlement was reasonable based on all of the circumstances. You are instructed that although the stipulated judgment is a final judgment entered against the Millards, the Court's approval of the stipulated judgment is not binding in determining whether the stipulated judgment is reasonable. The reasonableness of the stipulated judgment is for you, and only you, the jury, to decide.


In determining the damages, if any, to be awarded to the plaintiffs in this case, you are to use as a measure of damages the loss or harm sustained by the Millards resulting from the negligence, fraud, or bad faith of the defendants in this case.


Plaintiffs can recover against the defendants only through the claims assigned to them by the Millards. To recover on the assigned claims, plaintiffs must show losses or damages sustained by the Millards. Fraud and bad faith actions are assignable and punitive damage claims which are based on these actions are assignable as well.


Under the law, claims which are personal in nature cannot be assigned from one person to another. This prohibition against assignment of personal claims includes claims for emotional suffering and mental distress . . . .


Compensation must be reasonable. You may award plaintiffs only such damages as will fairly and reasonably compensate the Millards for the injuries or damages legally caused by defendants' negligence, fraud, or bad faith. You are not permitted to award a party speculative damages, which means compensation for loss or harm which, although possible, is conjectural or not reasonably probable. In this case, general damages are those damages which fairly and adequately compensate the Millards for factors such as damage to credit, general reputation, and loss of business opportunities. Special damages are those damages which can be calculated precisely or can be determined by you with reasonable certainty from the evidence.


The purpose of punitive damages is to punish the wrongdoer and serve as an example or warning to the wrongdoer and others not to engage in such conduct. You may award punitive damages against these defendants if and only if you find by clear and convincing evidence that these defendants acted intentionally, wantonly or oppressively or with such malice as implies a spirit of mischief or criminal indifference to civil obligations or that defendants' conduct constituted some willful misconduct or evidences that entire want of care which would raise a presumption of a conscious indifference to consequences.


Punitive damages may not be awarded for mere inadvertence, mistake, or errors of judgment. The proper measurement of punitive damages should be the degree of malice, oppression, or gross negligence which forms the basis for the award and the amount of money required to punish defendants considering their financial condition. In determining such degree, your analysis should be limited to an examination of defendant's state of mind at the time of the particular act involved.


As can be seen from the above instructions, the only mention of breach of contract was in the instruction that mentioned the breach of the duty to defend and that mention pertained only to the resulting waiver of a right to approve of any settlement. Nothing was mentioned about the breach of the contract to provide financial coverage.


In their opening brief, Plaintiffs argue that


ven though the jury d

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