Legal Question in Civil Litigation in California
We sustained water damage to our cabin and put in a claim to the utility company for uninsured amounts (mold and deductible) and for any other damages upon discovery.
No response as to their position for almost a month after the claim was submitted. The first communication we received as to their position on payment was a "Receipt for Partial Payment" which included a stated amount and the phrase "It is understood and agreed that this partial payment is the compromise of a doubtful and disputed claim, . . . "
After a bit of research, it appears that the "Receipt" was carefully crafted by their legal department to create an "Accord and Satisfaction" and that the words of a "compromise" to a "dispute" were added so that it would constitute a legal final settlement (a final release of all future liability).
Yet, the cover email stated, "Please contact me as soon as possible so we can schedule an appointment to discuss any additional claims you intend to present . . ."
My question: If the "Receipt" is, in fact, legally constructed as a release, a large utility company's legal department would know it as such. Yet, the cover email was presented as if the "Partial Payment" was part of a larger claim they expected to pay . . . an inducement for us to sign. Was there "Bad Faith" or "Negligent Misrepresentation" and do we have legal recourse?
1 Answer from Attorneys
First, I do not understand why a utility company would be liable for your deductible. If they caused damage to your cabin, they are responsible for the full amount of the damages; if any insurance paid for the damages less your deductible, the insurance company might have a right to subrogate against the utility company of the amount it had paid you.
Some of the language might be misleading, but overall it does appear that they are offering to pay you a certain amount for the dollar amount you have claimed but are willing to listen to additional claims you might have. A bad faith claim would only be against your own insurance company. As for negligent misrepresentation, either there was none of it was intentional, but your damages would only be what you could prove as damages and what they paid. If you cashed their check knowing that it was a compromise then you would have no basis for a suit as you knew what you were doing.
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