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Insurer denies homeowners' claim for property damage from 1994 earthquake

Insurance
Bad Faith: Miscellaneous/First Party Coverage: Property

Los Angeles County Superior Court
Pomerantz v. Mid-Century Insurance Co., No. BC138799, Downtown (ccw). Owen Kwong. Jury trial: 8 weeks.
Verdict/judgment: 5/19/99.

Verdict/Judgment: $12,260,000
$325,000 compensatory damages and $12,000,000 punitive
damages reduced by plaintiffs'10 percent comparative
liability. Vote: 12-0 liability; 10-2 punitive. Deliberations: 3 days; 4 hours.

TRIAL COUNSEL
Plaintiff: Patricia Moore, Moore & Moore, Los Angeles. Lawrence I. Washor, Washor & Associates, Los Angeles.

Defendant: Alan C. Arnall, Cooper, Kardaras & Scharf, Pasadena. Bruce Niehlsen, Cooper, Kardaras & Scharf, Pasadena.

FACTS/CONTENTIONS
According to plaintiff: Plaintiff homeowners claimed insurance bad faith after their insurer denied their claim for property damage from the 1994 earthquake. The plaintiffs were Nancy Pomerantz, a 50-year-old homemaker, and Jeffrey Pomerantz, a 53-year-old actor/fundraiser. The defendant was Mid-Century Insurance Co., a part of the Farmers Insurance Group. Plaintiffs'home in Woodland Hills was damaged by the December 1994 earthquake. Defendant denied plaintiffs'claim for $125,000 property damage.

CLAIMED INJURIES
According to plaintiff: Emotional distress.

CLAIMED DAMAGES
According to plaintiff: Policy benefits to repair property; additional living expenses; emotional distress damages; attorney fees.

SETTLEMENT DISCUSSIONS
According to plaintiff: Demand: $350,000 by each plaintiff in October 1996 and $600,000 at trial. Offer: Subject to a confidentiality order.

TRIAL EXPERTS
Plaintiff: Keith Charleston, insurance claims adjuster, Brentwood (925) 516-4300. John P. McKay, insurance bad faith attorney, McKay, Byrne, Graham & VanDam, Los Angeles (213) 386-6900. Robert Gerig, contractor, Gerig Construction, Thousand Oaks (805) 379-4899. Farrel Miles, engineer, Miles Engineering, Van Nuys (818) 994-0354.

Defendant: Thomas L. Carter, insurance claims consultant, Carter-Yarborough Associates, Yorba Linda (714) 777-1865.

COMMENTS
According to plaintiff: In this bifurcated trial, the jury deliberated three days on liability and four hours on punitive damages. Plaintiffs proved that after denying a claim, Mid-Century had a pattern and practice of retaining coverage counsel in order to set up the advice of counsel defense and avoid a punitive damages award.

 

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