$2.5 Million Ordered Back to CA Schools; Westchester Fire Insurance to Reimburse S.E.L.F. in Liability Dispute.

Business Editors & Legal Writers

LOS ANGELES--(BUSINESS WIRE)--Oct. 16, 2002

A Los Angeles Superior Court judge has ordered Westchester Fire Insurance Company to return $2,547,846.58 to the California school districts' Schools Excess Liability Fund (S.E.L.F.). The lawsuit involved the question of whether a School District Risk Sharing Pool or an insurance company was responsible for payment of a liability claim involving a school bus accident in Northern San Fernando Valley, CA.

In 1994, an unfortunate accident took place involving a passenger of a school bus, owned by the William S. Hart Union High School District, and leased and operated by Santa Barbara Transportation. Santa Barbara Transportation was solely responsible for the accident and had a policy with Westchester Fire Insurance Company, yet Santa Barbara claimed coverage under a risk pool contract issued to the School District by S.E.L.F.

In an effort to expedite settlement of the claim, both S.E.L.F. and Westchester agreed to jointly fund the excess liability portion of a 1998 settlement. Each reserved its rights vis-a-vis the other and contributed $2.1 million. Thereafter, S.E.L.F. filed a declaratory relief action. Westchester in turn filed a cross-complaint. In advance of a summary judgement hearing, S.E.L.F. submitted undisputed facts and evidence to establish Westchester was indeed solely responsible in paying the claim, including evidence that S.E.L.F.'s coverage pool is not insurance, and would only apply in the absence of insurance. Westchester attempted to avoid liability by issuing a retroactive declaration seven years after the underlying accident, so as to alter the terms of its insurance policy to expressly exclude coverage for the 1994 accident.

On June 17, 2002, the Honorable Howard J. Schwab found in favor of S.E.L.F. and a judgment was thereafter entered against Westchester for $2.1 million, plus interest from the date of settlement in 1998. On September 6, Judge Schwab denied Westchester's motion for new trial, allowing the judgement to stand.

Westchester has appealed the judgement.

Schools Excess Liability Fund, is a joint powers authority organized in accordance with the California Government Code. S.E.L.F. is funded by various school districts throughout California to pool the liability exposure of the districts and to provide an excess layer of coverage. This serves the interests of the community in that it reduces the potential an individual school district might sustain a debilitating financial loss from a liability claim that might financially impact that district's ability to educate our children. http://www.selfjpa.org/

Bowman and Brooke LLP is a rarity in the legal world - a firm of real trial lawyers. Representing clients in all 50 states, we routinely defend some of the highest profile cases for large household-name companies, in areas such as product liability, business litigation, construction defect, drug and medical device, toxic exposure, intellectual property and employment law. Bowman and Brooke has more than 100 lawyers and offices in Minneapolis, Phoenix, Detroit, San Jose, Los Angeles and Richmond. http://www.bowman-brooke.com.

S.E.L.F. was represented by Bowman and Brooke LLP, Partners Jeff Swedo and Larry Ramsey, and Associate Dana Anderson. Westchester was represented by Harris and Green.

Case No PC02550; Superior Court of the State of California for the County of Los Angeles-North Valley District