Insurer Must Pay $9.9 Million for Denying Coverage

By Brian Vargo

Published on July 22, 2005

On July 15, jurors ruled that Farmers should have covered policyholders B.J. Walker and Linda Williams. An 86-year-old neighbor sued them because their garage door fell on and injured him. The neighbor also sued the homeowner association that governs the condominium homes where Walker, Williams and the neighbor live.

Farmers refused to cover policyholders Walkers and Williams. But the insurance company did defend the homeowners association. The couple said they are members of the homeowner association and the association insurance policy should cover them. Separate from the association, the couple also has policies with Farmers.

Walker, 80, and Williams, 65, borrowed money from friends, and their credit cards, to settle with the neighbor just before trial. They sued Farmers in March 2004 for breach of contract and acting in "bad faith."

The jury award includes $51,900 in contract damages, $1.5 million in emotional distress and $8.3 million in punitive damages.

It is unknown whether Farmers will appeal the ruling.

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