Southwestern Law School has dropped its lawsuit alleging an insurance company breached a contract to provide complete coverage in defense of a family’s claims of substandard conditions at an apartment building the school owns near its Mid-City campus, nearly two months after the parties announced a tentative settlement.
In the underlying lawsuit, Carina Castaneda and her relatives alleged in their Los Angeles Superior Court complaint that they suffered severe emotional distress after Castaneda’s 3-year-old son, Isaias Melendez, contracted lead poisoning.
The family’s suit alleged that Southwestern failed to properly own, operate and manage their Shatto Place apartment complex. The case later settled for an undisclosed amount.
Southwestern’s suit against the insurer, United Educators Insurance, was brought last Oct. 2, also in Los Angeles Superior Court. It claimed that 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.
On Thursday, Southwestern attorneys filed court papers with Judge Teresa Beaudet asking that the suit be dismissed “with prejudice,” meaning it cannot be refiled. The parties had filed court papers with the same judge on Jan. 29 notifying her of a conditional settlement in the Southwestern-UE case. No terms were divulged.
According to Southwestern’s suit, UE breached its duties to Southwestern and although the insurer later said 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.
Southwestern and the Castaneda family had settlement talks before the family sued and the Castanedas held off any legal action 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 stated.