Accused of misrepresenting its own report to deny claim, AAA settles

When AAA denied the water-damage claim of a San Jose woman whose home suffered a burst water main, SBE filed suit alleging bad faith. According to one SBE attorney, the carrier had misstated its own inspection report, which found that no earth movement was involved in causing massive damage to the home’s foundation. Yet the carrier denied the claim based on an exception for earth movement.

After prevailing on preliminary law-and-motion, the attorney brought the parties together for a confidential mediation, at which a settlement deal was struck.