Bias Costs Farmers $5 Million
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by Susan Seager A retired Los Angeles trash collector won a $5 million jury award against an insurance company he claimed treated him unfairly because he was black and advised by a law firm that represented mostly minorities, his attorney said yesterday. The Los Angeles Superior Court jury, in a verdict reached late Monday, also ordered Farmers Insurance to publish a written apology to their policyholder, C.J. Molett Jr., 56. "I feel good because I got what I asked for," Molett said yesterday from his South Central Los Angeles home. "They did me wrong. My blood is as red as any white man's so they should treat me the same. I think this will open up their eyes not to mess with other people." Molett's attorney, John C. Taylor of Brentwood, claimed during the three-week "bad faith" trial that Farmers disputed a police report about Molett's 1980 auto accident, delayed paying his $6,500 claim for 1 years and offered him "low-ball" settlements because he was black. Farmers also treated Molett unfairly, Taylor charged, because his lawyers were on a secret 19 year-old list compiled by Farmers of law firms representing mostly minority clients. Farmers officials denied during courtroom testimony that they treated Molett differently because he was black. They said the list of attorneys was drawn up to "develop rapport" with the attorneys, Taylor said. A spokesman for the Los Angeles-based Farmers Insurance Group of Companies said he had no immediate comment. The jury voted 10-2 to award Molett $5,006,500 in punitive damages and $50,000 in compensatory damages, a court clerk said. Farmers officials had written "black male" on several of Molett's claim documents, and one Farmers attorney wrote, "I've retitled this claim, 'What's that funny smell?'" Taylor said. A Farmers attorney testified during the trial that he knew that a list of law firms with minority clients existed, although he had never seen it. He said he and others were told to "drag" those lawyers' cases into arbitration and make low settlement offers, Taylor said. Taylor said Farmers attorneys waited two years before interviewing Molett about the November 1980 accident, ignoring their own internal rules to interview a policyholder within 30 days. Instead, Farmers officials interviewed the uninsured motorist who rear-ended Molett, and the officials believed his claim that the accident occurred in a liquor store parking lot, Taylor said. Police who responded to the scene of the accident wrote in their report that the accident took place on a residential street, Taylor said. Molett, who was a Farmers policyholder for about two years, filed a claim for $6,500 for his lost wages, medical bills and "pain and suffering" related to the accident. He filed the claim with the help of the law firm of Dirnfield and Zelner, one of the firms on Farmers' alleged list of secret minority law firms. Farmers offered to pay $4,000, but Molett refused, and the case went before an attorney selected to arbitrate the matter. The arbitrator awarded Molett the $6,500 he requested, and Farmers paid the claim in May 1983, 2 years after the accident, Taylor said. Dirnfeld and Zelner filed a "bad faith" lawsuit against Farmers on Molett's behalf, claiming the company violated the state insurance code by delaying the claim payment and refusing reasonable offers of settlement. Taylor later took up the case. Taylor said he believes future bad faith lawsuits like Molett's may be jeopardized by a recent state Supreme Court decision. The court said accident victims no longer may sue another person's insurance company for bad faith. The higher court did not rule on the legality of bad faith lawsuits brought by policyholders who sue their own insurance companies. But Taylor said he fears that insurance companies will try to apply the ruling to those lawsuits, too. Taylor said the no-fault insurance initiative backed by the insurance industry also would ban such bad faith lawsuits. |
