Walker, et al. v. Farmers Group, Inc. selected as one of the Los Angeles Daily Journal's Top Plaintiff Verdicts of 2005
March 23, 2006
Los Angeles Daily Journal
Top Verdicts 2005
Plaintiff Power
By Kenneth Davis
Eleven angry juries delivered more than a billion dollars worth of verdicts that make up the Daily Journal's 2005 list of Top Plaintiff Verdicts. Of Course, by the time judges and appellate courts are finished with them, these verdicts are likely to be significantly less. But the reduced dollar figures don't necessarily lessen the rebuke these fact-finders delivered—much of it aimed at some of the world's biggest corporations. Wal-Mart, the world's biggest retailer, was slapped with a $172 million wage-and-hour verdict in Oakland, and Toshiba, the Japanese electronics behemoth, was hit with a $465 million trade-secrets verdict in Santa Clara. A number of California's top plaintiffs' lawyers agreed 2005 was a quiet year for tort claims. But Santa Monica Browne Greene predicted 2006 is "going to be a hot year."
John Quisenberry, owner of [The] Quisenberry Law [Firm] in Century City, and his colleague Heather McKeon took on insurance giant Farmers Insurance Group Inc. in a multimillion-dollar bad-faith case—and won $10 million. Walker et al. v. Farmers Insurance Group, BC312281 (L.A. Super. Ct.).
Retirees Linda Williams, 65, and B.J. Walker, 80, who share a Los Angeles Condominium, were sued by their neighbor, Juanita Wasson, 85, in 2002, after she was badly injured in a fall in front of their electric garage door.
Wasson alleged Walker was at fault because she opened the garage door by remote control before looking to see whether the driveway was clear. Quisenberry said the evidence showed Wasson probably fell in front of the garage door.
Wasson sued the two women and the homeowner association for reimbursement of $60,000 in medical bills.
The homeowners association and Williams and Walker were insured by Farmers Insurance Group. Farmers refused to defend the two women but did defend the association. And it filed a cross-complaint against Williams and Walker, alleging Wasson's fall was due to Walker's negligence. Faced with a $350,000 potential jury verdict, the two women borrowed enough money to settle with their neighbor just before trial.
They sued Farmers in March 2004 for breach of the insurance contract and breach of the implied covenant of good faith and fair dealing. In a bench trial in May, Los Angeles Superior Court Judge James R. Dunn ruled Farmers had breached its insurance contract by not providing the plaintiffs with a defense. A jury trial was then conducted to determine whether Farmers acted in bad faith in failing to provide a defense and to investigate the insureds' claims for coverage or to follow its own procedure in handling such claims.
The jury returned a unanimous verdict on liability and damages, and the court awarded the plaintiffs $10 million.
"Farmers had some very clear-written policies of how to handle a claim like this," Quisenberry said. "And they violated every single one of them."
He said that this was an important decision for those who litigate cases involving insurance bad faith or punitive damages. In recent years, insurance companies have been encouraged by a U.S. Supreme Court decision that limited punitive damage awards. State Farm Mutual Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003). As a result of that case, he said, insurance companies now feel free to deny small contract claims without fearing the consequences of substantial punitive damages.
Quisenberry hopes this case will send a message to insurance companies that they can't always hide behind the Campbell decision.
"I think it shows that insurance companies will be held accountable," he said. "And they shouldn't be encouraged by tort reform to think in serious cases they won't be held accountable by judges and juries."
The defendant's attorney, Richard Carter, a partner with Shea, Stokes & Carter, said he couldn't comment on the case because it's on appeal.
In a post-trial motion in December, Dunn reduced the punitive damages from $8.38 million to $1.5 million in a tentative ruling. The judge granted the defendant's motion that the punitive damages exceeded federal constitutional limits and were excessive under California law.
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