Southwestern Law School is suing an insurance company for allegedly breaching a contract and providing complete coverage for the school in defense of claims made by a family in a lawsuit over conditions at an apartment building the school owns near its Mid-City campus.
The underlying lawsuit was filed by Carina Castaneda and her family members on Sept. 26. They allege in their Los Angeles Superior Court complaint against Southwestern that they suffered severe emotional distress after Castaneda’s 3-year-old son, Isaias Melendez, contracted lead poisoning.
Castaneda’s other child, Iyse Melendez, age 1, and mother, Maria Jesus Salazar Garcia, 73, also are plaintiffs. The other defendants are Charles Dunn Real Estate Services, Inc. and Beach Front Property Management, Inc.
The family’s suit alleges that Southwestern failed to properly own, operate and manage their Shatto Place apartment complex.
Southwestern’s suit against the insurer, United Educators Insurance, was brought Monday, also in Los Angeles Superior Court, alleging the school bought insurance from the company for more than a decade and that the policies provided at least $30 million in coverage each year with the promise to defend and compensate Southwestern against a broad range of legal actions.
“Unfortunately for Southwestern, when it received a demand and threatened lawsuit from a family renting an apartment in a building that Southwestern owns, UE breached its duties to Southwestern,” the school’s suit states.
While UE later said that it was withdrawing its denial, it still refused to honor all duties to Southwestern and make anything more than a token contribution to a possible settlement, the Southwestern complaint alleges.
In addition to compensatory and punitive damages and attorneys’ fees, Southwestern seeks a judicial declaration rejecting UE’s contentions and finding that the law school founded in 1911 is entitled to the benefits it seeks.
Southwestern and the Castaneda family, whose lawyer demanded $25 million, had settlement talks before the family sued and the Castanedas held off suing until late September, but in the interim UE “continued its existing course of conduct, refusing to offer more than a pittance toward any possible settlement,” the Southwestern suit states.
A UE representative did not immediately reply to a request for comment on the Southwestern suit.
The Castaneda suit alleges that Southwestern intentionally ignored the plaintiffs’ property, failed to make repairs and allowed it to deteriorate to the point where it was covered in dangerous and toxic deteriorated lead-based paint, infested with cockroaches, damaged by chronic water leaks and had other defects consistent with slum housing.