$2,187,500
Awarded

HOMEOWNERS SUE CARRIER
FOR FAILURE TO PAY MOLD-RELATED CLAIM

INSURANCE
Bad Faith: Duty to Indemnify/First Party Coverage: Property

SAN DIEGO COUNTY SUPERIOR COURT
Rogers v. USAA, No. GIC803200, Central. John S. Meyer.
Jury trial: 7 days. Verdict/judgment: 1/21/2004.

VERDICT/JUDGMENT: $2,187,500
$37,500 special damages; $400,000 general damages; $1,750,000 punitive damages. Plus attorney fees and costs. The jury voted 12 to 0 on breach of contract, 12 to 0 on the breach of implied covenant of good faith and fair dealing, and 11 to 1 on punitive damages. Vote: Mixed poll. Deliberations: Not reported.

TRIAL COUNSEL
Plaintiff: Charles S. LiMandri, Law Offices of Charles S. LiMandri, Rancho Santa Fe. Richard Salpietra, Law Offices of Charles S. LiMandri, Rancho Santa Fe.

Defendant: Gregory C. Kane, Shifflet, Kane & Konoske, San Diego. Gregory P. Konoske, Shifflet, Kane & Konoske, San Diego.

FACTS/CONTENTIONS
According to plaintiff: Homeowners sued for bad faith refusal by their insurance carrier to cover mold-related damages. The plaintiffs were Richard Rogers and Donna Rogers, owners of a home in Fallbrook. The defendant was USAA (United Services Automobile Association). Plaintiffs were issued a homeowners insurance policy by defendant on or about June 27, 2001. The policy provided coverage for, among other things, loss to plaintiffs’ residence, loss to personal property, loss of use of premises, and additional living expenses. Plaintiffs alleged that a leak in a kitchen pipe and the resultant property damage should be fully covered for remediation and repair under their policy.

On February 5, 2002, plaintiffs contacted their insurance company about a leak in their kitchen. The insurance company investigated, but did not find the leak. Defendant then replaced the damaged wood flooring in the kitchen. During this process, which was completed in the summer of 2002, defendant issued a new policy with lower limits on coverage for damage. On September 23, 2002, plaintiffs again experienced a leak in their kitchen, which caused damage to the same area of the floor and surrounding cabinets. After consulting plumbing experts, they finally found the hole in a pipe underneath the kitchen concrete slab, which the plumbers concluded had caused both leaks. Plaintiffs alleged that defendant should pay for all of the water damage and the remediation of the mold because it was caused by a continuation of the prior unrepaired leak, which occurred under the original policy. Plaintiffs also sought benefits for their additional living expenses for the five months that they had to be out of their home and emotional distress and punitive damages for defendant’s bad faith breach of their insurance contract.

Defendant contended that the subsequent leak fell under the new policy, which greatly limited the amount to be paid for mold-related damage.

CLAIMED INJURIES
According to plaintiff: Mold-related injuries.

CLAIMED DAMAGES
According to plaintiff: $35,000 reconstruction and remediation costs; $2,500 medical costs.

SETTLEMENT DISCUSSIONS
Not reported.

TRIAL EXPERTS
Plaintiff: Ronald A. Simon, allergist/immunologist, Scripps Allergy, La Jolla (858) 554-8618. Everette Lee Herndon, Jr., insurance/bad faith consultant, Ranch Murieta (916) 354-8521.

Defendant: James McKinnon, insurance/claims, Claims Resource Management, Acton (661) 269-5867.

Michelin North America.