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$7 Million in Damages OKd in Quake Suit

Insurance: The legal action was the first to be brought under a new law resulting from the Chuck Quackenbush scandal.

June 17, 2001|NOAKI SCHWARTZ | TIMES STAFF WRITER

Culver City residents who were the first to take advantage of a new state law extending the period to file Northridge earthquake damage claims have been awarded nearly $7 million by a Los Angeles jury.

For the 430 families who live in the three-story Tara Hills complex, it could be the end of an exhausting journey that began when they first filed claims after the magnitude 6.8 earthquake in 1994.

"I just found out [we won] and am as pleased as could be," Bennie Dudley, 63, said Saturday. "There's no question in my mind they tried to just get away with not paying a claim. We paid our premium on time."

Tara Hills' attorneys say this was just one of many earthquake-related claims that were initially rejected by insurance companies that said the statute of limitations had run out. Attorney Brian Kabateck said his Century City law firm is handling five similar cases.

Kabateck was involved in writing the state law that extended the time limit until Dec. 31 to file a claim. The law that took effect in January is an outgrowth of the scandal involving former Insurance Commissioner Chuck Quackenbush, who was investigated for questionable actions related to Northridge earthquake claims.

Tara Hills homeowners paid a $26,000 annual premium to Scottsdale Insurance specifically for earthquake-related damage, their lawyer said. When a routine check revealed cracks stretching across the stucco buildings, the residents feared the 43 structures might not withstand another quake and notified the carrier, he said.

Scottsdale Insurance officials could not be reached for comment Saturday.

Kabateck said the homeowners filed a claim with the insurance company in 1995. Scottsdale sent out an investigator, but it wasn't until a year and a half later that the homeowners were notified that the claim had been rejected, he said. Scottsdale officials later said the claim was filed late, according to Kabateck.

Dissatisfied, the homeowners filed a lawsuit in October 1999.

"We knew it was a long shot and didn't know if we could get it past the statute of limitations," Kabateck said.

The case went to trial last month. For four weeks, the homeowners and the insurance company battled it out in the downtown Los Angeles Superior Court.

Kabateck said a subpoenaed file of the Scottsdale investigator's findings turned everything around for the residents. In it were reports that, contrary to what they had been told, Scottsdale investigators did find earthquake damage, he said.

The jury deliberated three days and on Friday found in favor of the homeowners. The money will go toward fixing the 10-acre property, which will take about a year to complete.

"It's been seven years and we're not a very rich association," Dudley said. "I'm so happy they found" against the insurance company.

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