Casparian v. Allstate Insurance

MEMORANDUM AND ORDER

PECKHAM, Chief Judge.

INTRODUCTION

Plaintiffs brought an action for breach of contract and insurance bad faith in state court in July 1986. The suit arose out of a homeowner’s all-risk policy plaintiffs purchased from Allstate Insurance Company (“Allstate”) in June 1979. Plaintiffs had filed a claim against the insurance policy in September 1983, seeking recovery for alleged construction defects in their house. Allstate initially denied the claim, but paid plaintiffs for their damages in February 1984. Nonetheless, plaintiffs sued based on Allstate’s initial refusal to…