Walter J. Lack (SBN 57550)
Daniel G. Whalen (SBN 126487)
Engstrom, Lipscomb & Lack
10100 Santa Monica Blvd.
16th Floor
Los Angeles, CA 90067-4107
(310)552-3800Donald W. Ricketts (SBN 39825)
28855 Kenroy Ave.
Santa Clarita, CA 91351
(805)250-3091
Attorneys for Plaintiff and Plaintiff in Pro Per
Superior Court of the State of California
For the County of Los Angeles, Central District
Donald W. Ricketts, etc., Plantiff
v.
Farmers Group, Inc. etc. et al,
Defendants
Case No. BC 165961
Order Denying Defendants
Motion For New Trial
And To Vacate Judgment;
Amendment To Statement Of Decision
ORDER
The motions of Farmers Insurance Exchange and Early, Maslach &
Price for a new trial on the issue of damages and to vacate the judgment entered by
the court came on for hearing on April 13, 2000. Having considered the moving and opposing
papers, and the argument of counsel, the motions and DENIED.
Briefing and argument on these motions centered on whether the punitive damages
awarded by the court were grossly excessive under principles enunciated by the United
States Supreme Court in Pacific Mutual Life Insurance Co. V. Haslip (1991) 499 U.S. 1 TX)
Prod. Alliance Resources (1993) 509 U.S. 443, and BMW North America, Inc. V. Gore
(1996) 517 U.S. 559.The Court amends its Statement of Decision previously filed
herein to reflect the consideration the court has given to these cases and the principles
enunciated herein as follows:
AMENDMENT TO STATEMENT OF DECISION
Following the filing of the Court's Statement of Decision herein, and entry of
judgment, defendants filed motions for a new trial as to the issue of damages and
to vacate the judgment and substitute a judgment in favor of defendants. Central to the
motions was the contention that the court's award of punitive damages was grossly
excessive and in violation of the Due Process Clause of the California and United States
Constitutions based upon principles enunciated by the United States Supreme Court in Pacific
Mutual Life Insurance Co. v. Haslip (1991) 499 U.S. 1, TXO Productions Corp. v, Alliance
Resources (1993) 509 U.S. 433., and BMW North America, Inc. v. Gore (1996) 517 U.S. 559.
The court has carefully considered these opinions and the arguments of the parties
regarding the application of the principles enunciated therein, and has denied the
post-trial motions.
The court finds that an award of exemplary damages of $2,500,000 is not grossly
excessive, does not violate due process and is necessary to punish defendants for their
willful, malicious, fraudulent, oppressive, illegal and reprehensible conduct. In fixing
the exemplary damages at approximately 9 times the amount of compensatory damages awarded
by the court the court has considered the fact that this amount is far less than 1% of the
net assets of defendants and far less than one week's earnings of defendants. The court
finds that a lesser amount would not provide a significant punishment to the defendants,
would not provide a deterrence to a repetition of their conduct, and is necessary to
enforce the important public polices enunciated in California's Rules of Professional
Conduct and the State Bar Act of California, violations of which plaintiff pointed out to
defendants and suggested change and for which was terminated. Those statutes provide
criminal penalties for their violation. The court finds that the punitive damages awarded
are necessary to deter defendants from punishing their attorneys for expressing questions
and cancel regarding ethical and legal obligations they, and defendants have. Defendants
should be encouraging open discussion on these important matters of public policy, not
suppressing them and punishing those who do seek to discuss them.
While defendants deny that their conduct constituted violations of the Rules of
Professional Conduct and the State Bar Act, their denials took the form, only, of
testimonial denials by the employees who testified on these manners, Joseph Fern and
Stephen Price.Plaintiff testified otherwise and submitted documentary evidence in support,
The Court finds that Merrs. Fern and Price were not credible witnesses and that plaintiff
was. Accordingly, the court, in response to repeated requests by defendants that it do so,
finds that defendants Farmers Insurance Exchange and Early, Maslach & Price, by their
use of non-attorney personnel to control the defense of insureds did engage in the illegal
practice of law, and that supervising attorney-employees of defendants, including Stephen
Price, engaged in the illegal practice of law and/or assisted in the illegal practice of
law.
Dated: 4-13-2000
Soussan G. Bruguera
Judge
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