A Santa Monica couple living in a hotel since the Northridge earthquake rocked their beach house in 1994 was awarded more than $5 million Wednesday in a lawsuit filed against their insurance company.
It is one of the biggest earthquake awards in the state and one of the first verdicts to come out of the hundreds of claims languishing in the wake of the devastating tremor.
A Los Angeles Superior Court jury unanimously found Chubb & Son--a New Jersey-based insurance company that specializes in high-end properties--guilty of fraud or malice in its handling of the repairs on the Santa Monica home. The jury awarded plaintiffs Stanley and Dorothy Meyer $5.35 million, including $2 million in punitive damages.
Under a pretrial agreement that set limits on the award and established a limited trial with no appeals, the Meyers can receive a maximum of $5 million.
"We were disappointed," said Edward Spell, vice president of Chubb & Son. "We will abide by the jury's decision. I can't make any further comment pursuant to the settlement agreement."
"Because Chubb is one of the most well-known and respected companies, a lot of other insurance companies are going to look at this verdict and revisit whether or not they are treating the group of earthquake victims still out there in a fair way," said William Shernoff, a consumer rights attorney who represents the Meyers and hundreds of homeowners suing State Farm Insurance over earthquake claims.
The Meyers sued Chubb after the company refused to pay the $2.5 million the Meyers said was needed to repair or rebuild their 6,000-square-foot home on the edge of the Pacific Ocean. The Meyers said the entire foundation needed to be replaced, but their insurance company disagreed, offering $880,000.
Shernoff said the method of repair Chubb proposed--injecting chemicals underneath the property to stabilize the foundation--was unsafe and did not meet building code requirements. In an interview last week, Spell said Chubb stood by the proposed method as an effective and legal repair.
The elderly couple have been lodged in two rooms in Santa Monica's Doubletree Guest Suites since the Jan. 17, 1994, quake forced them to move out of their unstable two-story home.
"After three years . . . their boot is finally off our throat," said Stanley Meyer, 83, a longtime writer who produced "Dragnet," among other television shows and movies. "The precedent that this case sets is very far-reaching. It means Chubb and all the insurance companies had better clean up their act."
The Meyers said living in a hotel while battling their insurance carrier was stressful and damaging to their health. Their two eighth-floor rooms were adequate, they said, but they felt displaced and helpless.
Now they have to decide whether to wait at least a year for their home to be repaired or move to a new residence.
"I started out trying to find a place for my wife to see the sunrise and the sunset, to enjoy the quality years of her life," Meyer said. "I want to get on with our lives . . . now that we have Chubb out of our lives. We've been vindicated."