21st Century Files Suit Relating to Fraudulent Claims

In response to a flood of insurance fraud relating to homeowners and earthquake insurance, 21st Century Insurance has filed a civil complaint against California-based Unlimited Adjusting Company and its principal Jung Ho Park. The suit alleges Unlimited and John Park illegally induced insureds into filing additional unnecessary and fraudulent claims with 21st stemming from the 1994 Northridge earthquake.

The company is ultimately seeking up to $10 million in compensatory damages, plus punitive damages to help deter activities that are costing California consumers higher insurance premiums and significantly limiting their options for homeowners and earthquake coverage.

Filed in the Orange County Superior Court of California on Dec. 16, 2002, 21st’s lawsuit cites 10 causes of action against Unlimited and John Park, including fraud, violation of the Unfair Business Practices Act, intentional interference with contractual relations and willful misconduct.

21st alleges Unlimited and John Park cold-called and sent direct mail solicitations to large numbers of homeowners in the area affected by the Northridge earthquake, promising they would obtain insurance proceeds for the homeowners for “earthquake damages” regardless of whether the homeowners had already been paid for previous claims, had any actual earthquake damage or had any legitimate basis to obtain insurance benefits.

21st further alleges Unlimited and John Park would prepare false and fraudulent reports indicating the damage was more extensive and costly to repair than it was, and/or attributing damage to the Northridge earthquake when there was no damage at all or, if there was any damage, it resulted from causes other than the Northridge earthquake. For their involvement, Unlimited and John Park would pocket up to 40 percent of any potential claims or settlements. As a result of Unlimited and John Park’s schemes, 21st has expended millions of dollars to review and investigate fraudulent reports.