Thursday, September 25, 2008

Farmers Insurance loses $130-million jury verdict to Oklahoma homeowners

Farmers Insurance loses $130-million jury verdict to Oklahoma homeowners
From Bloomberg News
September 25, 2008

Farmers Insurance Co., the Los Angeles-based subsidiary of Zurich Financial Services, lost a $130-million jury verdict to a group of Oklahoma homeowners who alleged the company underpaid on claims.

The homeowners, who said Farmers improperly failed to pay for general contractors, contended breach of contract, bad faith and fraud. This cost each one an average of about $575 in unpaid bills for fixing damaged homes, said Derrick Morton, one of their attorneys. The group includes about 76,000 people, he said.

The Lawton, Okla., jury last week awarded the homeowners $50 million for breach of contract, $50 million for bad faith and $30 million in punitives. The verdict includes duplicate actual damages, which will reduce the total judgment to $80 million, homeowners' attorney Michael Burrage said.

"The $50 million will have to be collected on the contract claim or on the bad-faith claim," Burrage said in a phone interview. "We can't collect it twice." The homeowners will also receive 15% interest on actual damages and attorneys' fees if the verdict is upheld, he said.

Farmers will appeal the award, company spokesman Jerry Davies said in a phone interview. He declined to comment further.

The jury verdict is the 14th largest in the U.S. this year, according to data compiled by Bloomberg.

The homeowners include Farmers customers in Oklahoma who made claims from June 1994 through mid-2007, Morton said. The homeowners say Farmers should have covered compensation for overhead and profits for general contractors.

Source: LA Times

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Thursday, September 18, 2008

Farmers Insurance Loses Class Action: Ordered to Pay Millions

Lawton Jury Returns With Farmers Insurance Verdict
Thursday, September 18, 2008
It could turn out to the one of the biggest judgements in state history. A Commanche County jury Wednesday ruled against Farmers Insurance Company in a class-action lawsuit alleging the company failed to pay millions of dollars in homeowners' claims. Attorney Michael Burrage in Oklahoma City says the jury ordered Farmers to pay 50 million dollars for contractual benefits, 50 million dollars for bad faith and fraud and 30 million dollars in punitive damages. Burrage says he is pleased with the verdict. He says the jury did the right thing. The verdict affects 76-thousand policyholders in Oklahoma.

Multi-million dollar judgement
Thursday, September 18, 2008
Lawton_A Comanche County jury handed down a multi-million dollar judgement against Farmers Insurance company Wednesday as part of a class-action lawsuit. They ordered $50 million in actual damages, and $30 million in punitive damages, plus interest, which could push the total judgement to $200 million.
The suit was originally filed in 2001 on behalf of 76,000 policyholders in Oklahoma by Bill Burgess, Senior. His sons, Bill and Brad, both attorneys, have been on the case from the start. Their contention was that Farmers had wrongfully withheld millions of dollars in claims that should have been paid to policyholders.
The case finally reached the jury this month, and after two weeks of testimony and five hours of deliberation Wednesday, they returned the judgement. It's the largest ever in Comanche County, and may turn out to be the biggest judgement in Oklahoma history.

Farmers Insurance Class Action Web Site:
Burgess v. Farmers Insurance Company
A class action lawsuit involving homeowner’s insurance issued by Farmers in Oklahoma may affect your rights.

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