Palisades Fire Victims Seek Court Order to Obtain Claims Documents

Introduction to the Lawsuit

A Pacific Palisades couple is seeking a court order that would force California’s insurer of last resort to turn over claims documents following allegations it has delayed payments to fix their fire-damaged home.

The Allegations Against the FAIR Plan

The lawsuit by Scott and Lissette Jungwirth accuses the California FAIR Plan Assn. of bad faith, breach of contract and other wrongdoing in seeking a temporary restraining order and injunction to obtain photographs taken by their field adjuster, as well as the adjuster’s narrative reports and communications with the plan. The Los Angeles County Superior Court lawsuit said the home remains standing but was infiltrated by soot, ash and fire debris carried inside through a broken window. Testing done by a professional hygienist allegedly found heavy metals, lead, cyanide and other contaminants, which would require demolition, removal of dry wall and flooring, and other repairs.

Impact on the Family

That has forced the couple and their young daughter to live in hotels, with friends and relatives and in Airbnbs, yet the plan has failed to restore the home — and turn over the documents so they can better understand the delay, according to the lawsuit, which seeks an injunction that would apply to all policyholders.

Response from the FAIR Plan

A spokesperson for the FAIR Plan said it does not respond to pending lawsuits. The litigation was filed by the same two law firms — Edelson and Kerley Schaffer — that handled a lawsuit brought by 10 FAIR Plan policyholders last month that accused the insurer of bad faith and breach of contract because of the plan’s alleged refusal to properly investigate and pay for the cleanups of homes damaged by wildfire smoke.

Similar Litigation and Industry Response

The FAIR Plan maintains it covers smoke damage claims as required by law and pays for independent industrial hygienists as needed to properly assess what level of remediation a home requires. Monday’s litigation similarly names as defendants the state’s biggest home insurers, including State Farm General. The Los Angeles-based FAIR Plan is operated by California’s licensed home insurers who govern it and share in the plan’s profits, expenses and losses based on their weighted market share. State Farm General did not immediately respond to a request for comment.

Attorney’s Allegations

Dylan Schaffer, one of Jungwirth’s attorneys, alleged the plan does not turn over adjuster documents because it would show homes are more badly damaged and in need of more remediation than the plan is willing to pay for. “A lot of these adjusters are telling California FAIR Plan the truth: These houses are really badly damaged,” he said. “They need all kinds of work. And California FAIR Plan takes those and they slash them.”

Legal Precedent and Ongoing Disputes

The lawsuit contends the plan has for years refused to turn over claims-related documents, despite 2001 legislation arising out of the 1994 Northridge earthquake that amended the insurance code and granted consumers the right to such documents. It also cites a Jan. 6 decision in Fresno County Superior Court that granted a FAIR Plan policyholder who suffered wind damage in 2022 access to her claims documents. Schaffer, who also handled that case, said it involves the same issues encountered by the Jungwirths.

Additional Lawsuits and Industry Challenges

The request for an injunction was the second lawsuit filed by a Jan. 7 fire victim against the FAIR Plan in the last two weeks. Luis Cazares, an Altadena homeowner, sued the plan on May 2, alleging bad faith and breach of contract. He alleges his home was made uninhabitable by fire and smoke damage, yet the plan only paid him $55,850, which is inadequate to repair it. The lawsuit notes that levels of lead in residual ash in Altadena exceed the amount deemed safe, according to a study done by the Jet Propulsion Laboratory and Caltech.

Conclusion

The ongoing disputes between homeowners and the FAIR Plan highlight the challenges faced by those seeking compensation for fire and smoke damage. The lawsuits underscore the need for transparency and fairness in the insurance claims process, particularly for those who have suffered significant losses. As the legal battles continue, it remains to be seen how the courts will rule on these matters and what impact it will have on the insurance industry and policyholders in California.

FAQs

1. What is the California FAIR Plan?

   • The California FAIR Plan is the state’s insurer of last resort, providing coverage to homeowners who are unable to obtain insurance through traditional means.

2. What are the allegations against the FAIR Plan?

   • The FAIR Plan is accused of bad faith, breach of contract, and other wrongdoing, including delaying payments and failing to provide necessary documentation to policyholders.

3. What is the significance of the Jan. 6 decision in Fresno County Superior Court?

   • The decision granted a FAIR Plan policyholder access to her claims documents, setting a precedent for other policyholders seeking similar information.

4. How many lawsuits have been filed against the FAIR Plan in relation to the Jan. 7 fires?

   • At least two lawsuits have been filed, with attorneys indicating that more cases are expected to be filed.
5. What is the response from the insurance industry to these lawsuits?
   • The industry has largely declined to comment on pending litigation, but an industry trade group has characterized the lawsuits as "defy[ing] logic" and advancing "meritless claims."