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February 2023

Gordon & Rees Los Angeles Team Wins Defense Verdict in Insurance Broker Negligence Wildfire Case

Gordon Rees Scully Mansukhani Partner David Jones and Senior Counsel Steven Inouye obtained a complete defense verdict in Sonoma County following a four-week jury trial in a broker negligence lawsuit filed in connection with the 2017 Tubbs wildfire. 

Following the fire, the plaintiffs alleged their insurance agent had promised to obtain sufficient insurance coverage to entirely rebuild their home “as is” in the event of a fire.  The plaintiffs also claimed that their agent owed a special duty to secure adequate coverage due to the length of their relationship and the agent’s personal knowledge of the home.  Although the insurer voluntarily reformed the policy to increase the limits, the plaintiffs claimed that they were still severely underinsured for their dwelling, other structures, landscaping, code upgrades and personal belongings.  

Litigation ensued over the next four years.  During this time, the plaintiffs never rebuilt and claimed they were forced to sell their empty lot. The plaintiffs also retained ten experts to support their underinsurance claims.  The plaintiffs ultimately sought over $1,700,000 in damages against their insurance agent. 

At trial, the defense team presented evidence and expert testimony that the agent’s actions in securing coverage did not fall below the standard of care. The team also presented evidence that plaintiffs had received adequate insurance to rebuild based upon local construction costs at the time. The team further argued that the plaintiffs’ reconstruction estimates were overly inflated and the plaintiffs had ignored opportunities to rebuild within their policy limits.  After deliberating for two hours, the jury delivered an 11 to 1 defense verdict in favor of the insurance agent.  

Steven R. Inouye
David L. Jones