Couple Seeks Class Action Suit Against Insurer in Quake Case; Law: They say Farmers denied them chance for coverage. Company calls claim 'absolutely untrue.';

By: JOHN CHANDLER
TIMES STAFF WRITER


A Canoga Park couple who have sued Farmers Insurance Group, claiming the company illegally failed to offer earthquake coverage as part of its homeowner policies, are seeking to broaden their case into a
class action lawsuit.

In papers filed in Van Nuys Superior Court, attorneys for Helene and Alan Apper, whose house was damaged in the Northridge earthquake, claim that thousands of Farmers' homeowner policyholders may have been similarly denied the opportunity to obtain earthquake coverage.

A spokesman for Los Angeles-based Farmers, the state's third-largest homeowners insurance carrier with about 1.3 million policies, called the allegations "absolutely untrue" and said the company's share of
earthquake policies actually has been increasing.

However, Farmers did agree in February to pay a $100,000 fine to settle charges by state Insurance Commissioner John Garamendi that the company had failed to make proper earthquake coverage offers in 150 of 200 customer files examined after the 1989 Loma Prieta earthquake.

"We offer earthquake coverage to every one of our homeowner customers in California," said Jeffrey Beyer, a Farmers vice president. "There may have been some procedural issues in 1988-89. But that was five years ago," Beyer said, insisting the problems have been corrected.

Under a 1984 state law, insurance companies in California offering residential policies must also offer would-be customers earthquake coverage at the same time. If a customer declines that coverage, insurers
then must again offer the earthquake coverage every two years, officials said.

The Appers originally sued Farmers in June for misrepresentation and breach of contract. On Thursday, their attorney filed an amended complaint seeking to broaden the case into a class action lawsuit, in
which other Farmers customers could join. A judge still must rule on that request.

The Appers claim they asked their Farmers agent, Greg Kusnierek of Thousand Oaks, for an earthquake quote in December, 1991, but never received one. Their lawsuit claims Kusnierek or someone else several
months later forged Helene Apper's signature on a form rejecting earthquake coverage.

The couple accepted a homeowners policy from Kusnierek in March, 1992, that contained no earthquake coverage. But they say they didn't learn of the alleged forgery until dealing with Farmers after their house suffered between $50,000 and $100,000 damage in the Jan. 17 Northridge earthquake.

The couple's suit claims Farmers originally refused to pay for their earthquake repairs because they lacked an earthquake policy. But in May, amid the couple's forgery claim, the company agreed to cover them with a
$100,000 policy with a 10% deductible, both sides said in interviews.

Gary Paul, the Santa Monica attorney representing the couple, said the decision suggests Farmers realized the company had engaged in wrongdoing. But Beyer, the Farmers official, said the company found "no evidence" of forgery and simply gave the Appers "the benefit of the doubt."

Paul did not provide evidence in his court filing to back up the claim that thousands of Farmers customers are being denied earthquake coverage. In an interview, he said he based it on Kusnierek's claim in a memo that he followed company policy in handling the Appers' case.