Settlement Amount:
Against All Comprehensive General Liability Carriers: $10,300,000

Case Name:
ROBINHOOD HOMES, INC. & WATT INDUSTRIES, INC v. HOME INSURANCE
COMPANY, CITY INSURANCE COMPANY, ADJUSTCO, INC. & PAUL GUIDRY

Case Number:
San Diego Superior Court, No. 544730

Plaintiff:
Robinhood Homes, Inc. & Watt Industries, Inc

Defendants:
Home Insurance Company, City Insurance Company, Adjustco, Inc. &
Paul Guidry

Facts and Background:
During the years 1978 through 1980, the plaintiffs, partners in a
real estate development venture, were injured by City and Home
Ins. under two excess liability policies providing combined
aggregate limits of $3,000,000.

In early 1977, the plaintiffs, by and through several
subcontractors, completed cutting, grading, filling and
compacting operations in preparations for development of a large
subdivision. Additionally, a buttress and sub-drain network was
installed by one of the grading subcontractors. After two heavy
seasons of rainfall, a total slope failure occurred. Plaintiffs
were required to repurchase and demolish 7 homes, completely
regrade the plane of slope failure and permanently stabilized the
slope. Home and City, as well as several other insurance
carriers, were notified of the loss in the early 1981. At that
time, total accrued losses were approximately 1.5 million
dollars. After acknowledging receipt to deny the claim, Home and
City expressly reserved their rights to deny the claim on the
basis of "late notice," as well as the applicability of numerous
exclusions, including the performance of "architectural,"
"engineering" or "other professional services," by or on behalf of
the named insureds.

In August 1984, a formal claim in the amount of approximately 9.8
million dollars was submitted to Home and City for accrued losses
to date. After approximately one year without any response from
the carriers, the insureds instituted litigation to recover
contract benefits, compensatory and punitive damages.

By the time litigation was filed by the insureds, however, the
total claim of 9.8 million dollars had been reduced by proceeds
recovered in litigation against other carriers (Puritan Insurance
Company - $5,000,000; New Hampshire Insurance Company -
$1,000,000; Canadian Indemnity Company - $750,000; Employers
Reinsurance Company - $750,000, resulting in a net claim of
approximately $2,300,000. The net claim was further reduced by
the residual value of 15 homes repurchased by the insured in
settlement of third-party litigation, which 15 homes the insureds
resold "as is" for approximately 1.6 million dollars. The
remaining claim represented engineering, grading and construction
expenses incurred by the insureds in order to repair and
stabilize the slope in order to prevent damage to adjoining
properties.

Damages:
Contract Benefits in the amount of $750,000 - $1,250,000 (net
claim less residual value)