• Insurance Squabble

    LOS ANGELES (CNS) – Mercury Casualty Co. owes thousands of dollars in
    damages to 49 claimants underpaid  by the insurer after their homes were
    damaged by residue from the 2009 Station Fire, an attorney told a jury today.
    “Mercury was looking for excuses not to pay the claims or to pay as
    little as they could possibly get away with,” lawyer Michael Cohen said during
    his final argument in trial of his clients’ lawsuit against the company.
    Cohen recommended damages ranging from $8,600 to $36,000 to make his
    clients whole, plus another two to three times their individual damage amounts
    to each for their emotional distress.
    The plaintiffs’ homes were not damaged by the flames, but instead by
    smoke, soot and ash. They lived in an area roughly spanning from Pacoima to
    An attorney for Mercury will give his closing argument this afternoon.
    In his opening statement in early May, defense lawyer John Hager said a public
    adjusting firm, Advantage Loss Group, inflated claims and signed up most of the
    people who eventually sued Mercury in December 2010. He also said the
    plaintiffs were compensated fairly and that some claims were brought nearly a
    year after the fire began.
    In their court papers, attorneys for the plaintiffs say many of their
    clients found out later that their damages were worse than originally believed.
    The lawyers also contend that Mercury used only two industrial hygienists to
    inspect each claim and that each report contained nearly identical results,
    regardless of how far a residence was from the fire.
    “It was designed to pay far less than what could be reasonably taken to
    restore their homes to the condition they were in before the fire,” Cohen
    said. “They pre-judged each of these claims and treated them as if they were
    fraudulent claims from the very beginning.”
    Cohen also said Mercury did not meet its ethical obligations to customers.
    “The company put their interests ahead of the claimants throughout this
    process,” Cohen said. “Every Mercury employee was given an incentive to pay
    as little as they could.”
    Five of the 49 claimants received no money from Mercury at all because
    their damage was not considered severe enough, he said.
    Instead of following the insurance industry standard and using Xactimate
    software to calculate the claimants’ losses, Mercury hired a small cleaning
    company with no experience in restoring smoke-damaged homes, Cohen said. The
    company gave cleaning estimates that did ignored damage to walls, ceilings and
    mattresses, he said.
    The Station Fire began along Angeles Crest Highway and eventually became
    the largest blaze ever in Los Angeles County in terms of the amount of land
    burned — more than 160,000 acres, according to James McMullen, a fire
    protection consultant who testified earlier in the trial.
    McMullen said the fire began on Aug. 26, 2009, in a ravine, and
    firefighters had to battle steep terrain and sharp updrafts of wind.
    The fire, which was not contained until Oct. 16, 2009, burned 250 square
    miles, destroyed more than 200 structures, including 89 homes, wiped out the
    community of Hidden Springs, and killed two Los Angeles County firefighters
    trying to protect their mountain camp.

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