Judge Rules Fidelity National Must Pay $5.1 Million in Wildfire Dispute

The Insurance Journal
November 11, 2005

An insurance company has been ordered to pay punitive damages of more than $5.1 million to a couple who said they were underpaid on their claim for a home destroyed during the 2003 wildfire season.

Attorneys for the plaintiffs said the verdict followed the first insurance trial stemming from the Southern California fires. The couple, Larry Stone and Linda Della Pelle, lost their home in Claremont, Calif., on Oct. 25, 2003, and subsequently filed a claim with Fidelity National Insurance Co.

Fidelity eventually agreed to pay $433,000, less than the couple said was needed to return the home to pre-fire condition. They said the company failed to consider all the rebuilding costs, including flooring, architectural and engineering fees, mold testing, and contractor supervision fees, said Ricardo Echeverria, the couple's lawyer.

"They never properly investigated to determine what was in the house," Echeverria told the San Jose Mercury News.

On Wednesday, a jury found the replacement cost should have been $616,000. With its verdict, jurors said Fidelity breached its contract with the couple and that its conduct met the legal definitions of fraud, malice and oppression.

Lawyer John Hennelly, who represented Fidelity during the trial, said the company plans to appeal. He said the judge made several errors regarding what could be admitted into evidence.

Echeverria said he expected the judge to award the couple the difference between the $616,000 and the $433,000 -- a total of $183,000 -- along with punitive damages of $5,163,217.

Hennelly said his clients would object to paying both amounts.

Copyright © 2005 by Wells Publishing Company

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