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The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.

 

 

Farmers Insurance Hit With 7.5 Million Dollar Judgement

Two of the firm's partners have just completed a six month jury trial against an insurance company that tried to avoid paying a claim by accusing its insureds of burning down their own home. The jury disagreed and awarded plaintiffs Stephan and David Phillips over $7.5 million dollars.

Fire Insurance Exchange (Farmers) insured the Phillips' three story, 11,000 square foot residence located on 168 acres in Martinez, California, since the home was built in 1985. After an electrical fire occurred in the laundry room in June, 1994, the family moved out while Farmers prepared repair estimates. Five months later, with the repair estimates still not finalized, the house burnt to the ground. Shortly thereafter, the remaining structures were vandalized.

Although none of the investigative agencies was ever able to determine the cause of the November, 1994 fire, Farmers treated the claim as possible arson by the insured and refused to pay. Almost two years later, in September 1996, Farmers formally denied all of the claims, accusing the Phillips of setting the second fire, vandalizing their own property, fraudulently overstating their losses and breaching the insurance contract. Farmers then demanded the return of the approximately $650,000 it had paid in connection with the first fire.

After over two years of preparation, the trial commenced in August, 1998, with Richard T. Bowles and Robert I. Westerfield of Bowles and Verna representing the Phillips. After hearing some 60 witnesses testify over a six month period, the jury deliberated for four days before finding that Farmers had breached the insurance contract, acted in bad faith and also acted with fraud, oppression or malice. The jury awarded approximately $3.5 million in compensatory and $3.3 million in punitive damages. The Court increased the recovery by awarding over $700,000 in attorneys fees. The Phillips' requests for costs and interest and Farmers' post trial motions are pending.

 

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