Gray·Duffy Obtains Dismissal in Alleged Negligent Construction Case

March 2011

Overview

Michael Eisenbaum of Gray·Duffy’s Encino office obtained a dismissal of a lawsuit against the firm’s general contractor and subcontractor clients arising from allegations of negligent construction in a cross-complaint by the insurance broker that placed coverage for leased premises.

When the insurance carrier denied coverage for a water loss, Kangavari sued its retail broker, who then cross-complained against the general contractor and the insured plumbing contractor alleging improper installation of plumbing as the cause of the water damage loss.

Discussion

Kangavari v. Hanasab

This lawsuit arises from a previous case, Khorshidi v. Kangavari, et al., involving water damage at Khorshidi’s business when a pipe broke in the bathroom. Khorshidi leased the premises located in downtown Los Angeles from Kangavari to sell cloth goods. The leased retail premises was constructed by the firm’s clients in 2004.

The underlying litigation was settled, with the insured obtaining a dismissal in exchange for a waiver of costs. Apparently, the Kangavari defendants in the Khorshidi litigation discovered that they were not insured for the loss, had to retain counsel at their own expense, and ultimately settled with Khorshidi for $250,000. The Khorshidi v. Kangavari, et al. case was dismissed pursuant to stipulation.

The new lawsuit entitled Fereidoon Kangavari, Sina Kangavari and Accessory Collection, LLC v. Farhad Hanasab, Hanasab Insurance Services, Inc. and USI Entertainment contained 11 causes of action and was an action against Kangavari’s insurance brokers for the failure to maintain their liability coverage. This resulted in the Kangavaris having to defend themselves in the Khorshidi action and settle the case with their own funds. Farhad Hanasab and Hanasab Insurance Services (“Hanasab”) filed a cross-complaint for equitable indemnity and declaratory relief against the firm’s clients, which, after a lengthy litigation process, was ultimately dismissed prior to trial.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.