$7M Jury Verdict Reached in Northridge Case

A jury awarded almost $7,000,000 in earthquake repair costs and bad faith damages on June 15 to a Culver City condominium homeowners association in a lawsuit against Scottsdale Insurance Company, according to Brian S. Kabateck, the association’s attorney.

The Los Angeles law firm of Quisenberry & Kabateck LLP also announced that this was the first trial and first jury verdict for earthquake insurance benefits under a new law, SB 1899. The legislation was enacted to extend the statute of limitations for claims brought by policyholders for damage resulting from the 1994 Northridge earthquake. Kabateck, a plaintiff’s attorney and partner in Quisenberry & Kabateck was instrumental in drafting SB1899. The new law allows policyholders to file suits against their insurance companies for earthquake damage until Dec. 31, 2001.

In the case of Tara Hill Homeowners Association v. Scottsdale Insurance Company, Wheeler & Gray (Case No. BC 219 457, Los Angeles Superior Court), the Tara Hill homeowners alleged that their insurer, Scottsdale Insurance Company, deliberately misled them in first advising them they had suffered no earthquake damage at all, and then lowballing and underestimating the damage once the homeowners renewed their claim under the new legislation.

After a five-week trial, the downtown Los Angeles jury returned a verdict of $5,200,000 as the cost of repairing the earthquake damage and $2,000,000 in damages due to Scottsdale’s bad faith handling of the claim. The jury also determined that the policy’s deductible was $500,000.

Quisenberry & Kabateck further stated the jury had also concluded that Scottsdale had acted with malice and defrauded the homeowners out of their insurance benefits, thus entitling the homeowners to ask for an award of punitive damages.

However, Judge George Wu, the trial judge, ruled that the new legislation itself was punishment enough, and did not allow the jury to deliberate further on the amount of the punitive damages the jury felt appropriate.

Latest Comments

• March 31, 2004 at 3:31 am

  Wayne Kurtz says:

  Do recipients of earthquake awards have to pay income tax on their settlement money? Thank you.