Roof Repair Trial Falls on Insurer
By John Parker
The modest stone home owned by 96-year-old James Davis
and his daughter is valued at less than $40,000.
But it's the only house in it's neighborhood with a
$17 million roof.
The former firefighter and his daughter, Virginia Davis Calame,
won that amount of punitive damages Tuesday in federal court --
all because they fought their insurance company over less than
$1,500 in hail damage.
Besides being thought to be the largest jury award in the history
of Oklahoma's western federal judicial district court, the ruling
could affect thousands of Oklahoma policyholders and recent
tornado victims who want fair compensation for storm losses.
The Davises alleged Farmers Insurance Co. had been illegally
deducting labor and debris removal costs to fix wind and
hail damage on roofs since the early 1980s.
U.S. District Judge Ralph Thompson agreed it happened in the Davis
case, ruling before trial that Farmers' Mid-Century Insurance Co.
wrongly deducted those costs from $1,428 in roof damage.
Attorney John T. Edwards, with attorneys Shannon Edwards and
Phillip Dickey, presented evidence that Mid-Century
made the depreciation a regular practice in Oklahoma since 1983,
wrongfully profiting by $17 million among thousands of damage
Jurors, who appairlenty agreed, ruled that the insurance company
maliciously and recklessly breached it's duty to act in good
faith and deal fairly.
"We knew it had been happening for a number of years,
and that people were just not being paid what they
were entitled to under their policies." Edwards said.
Other policyholders striped of insurance money for labor involved
in tearing off roofs and replacing them could also sue,
he said. The practice generally affects homeowners with "actual cash value",
rather than replacement-costs, policies, he said.
Farmers Insurance denies the allegations and will appeal the verdict,
state Executive Director Ron Coble said.
"We're shocked and surprised that this verdict would be delivered,
and that sum of money would be awarded." Coble said.
Davis, now in a nursing home, lived at 2135 NW 34 for more than
two decades when a spring 1996 hail storm caused a total loss on
his composite-shingle roof. The one-story is less than a thousand square feet.
The estimated $1,428 in damages was cut in half to reflect the roofs
depreciated value, plus labor costs to remove debris and replace the roof.
After a $250 deductible, the Davises protested getting $464.
Thompson ruled that the company's deduction for labor costs
violated the contract and amounted to $439.50. The decision
means that other insurers with similar practices could face legal
Besides the punitive damages, jurors awarded $40,000 in actual
damages to Davis and his daughter for the emotional distress
of having to fight the dispute.