ORANGE COUNTY - On July 22, 2019, after a two week jury trial in Orange County, California, Los Angeles partner Robert A. Latham III obtained a unanimous (12-0) defense verdict for Farmers Group affiliate Fire Insurance Exchange (FIE) against a homeowner in a case brought for breach of contract and “bad faith” breach of the implied covenant of good faith and fair dealing. At issue was displacement of a swimming pool, paver decking, and a cabana at the plaintiff’s home and FIE’s denial in 2013 of coverage for residential earth movement loss, an excluded risk, whether caused by the mechanical breakdown of the pool’s hydrostatic valve or water discharged from it, whether sudden and accidental or not.
The trial demand was $998,000 for repair costs and diminution in value. During trial, FIE offered to waive costs in exchange for dismissal. The homeowner’s last pretrial demand was $187,500, the “other structures” policy limits, and FIE’s last pretrial offer was $22,500.
To prove the policy exclusions, Bob sought throughout the trial to guide the jurors through the facts and science of the mechanical breakdown, the water discharge, and the long-term earth movement, through the testimony and exhibits of FIE’s geotechnical and mechanical engineers. Afterwards, all twelve jurors and one alternate commented to Bob that from opening statement through closing argument, he remained on message and provided them with the roadmap they needed to follow. When he asked them whether it was difficult to rule in favor of an insurer, they all responded that this was one of the easiest decisions they had ever made, that the insurer was right on this one and the homeowner was wrong.
Since the defense verdict exceeded pretrial offers of $5,000 and $22,500, FIE will be recovering about $75,000 in litigation costs from the homeowner. The case is Jechart v. Farmers Group Inc. et al, Orange County Superior Court Case No. 30-2014-00704773-CU-IC-CJC.