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.


Thursday, May 11, 2000

$40 Million Awarded in Insurance Suit

LOS ANGELES -- A Los Angeles Superior Court jury Wednesday awarded a former San Bernardino County contractor $40 million in punitive damages for a claim in which he accused an affiliate of Farmers Insurance Group of bad faith.

Craig Rossell, the attorney who represented contractor Perry Hanstad, 48, said the case was "part of a huge pattern of denying and delaying payments on claims."

The case stemmed from Farmers' failure to pay a 1993 fraud award imposed against the contractor, who was insured by Truck Insurance, an affiliate of Farmers.

That fraud judgment came out of an arbitration case involving a remodeling and expansion job in Arcadia.

Even though fraud was covered by Hanstad's policy, Farmers balked at paying, ultimately forcing Hanstad into bankruptcy, according to Hanstad's 1996 bad-faith lawsuit against Truck Insurance. The insurer also claimed it was not obligated to defend Hanstad against the fraud allegations.

In addition, the jury awarded Hanstad about $2 million in compensatory damages last week.


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