News

The Daily Journal recently covered a lawsuit filed on behalf of Pacific Palisades homeowners, represented by Devin McRae and Peter Scott of Early Sullivan, against State Farm after last year’s devastating Palisades and Eaton wildfires. The suit alleges that the insurance company deliberately underestimated reconstruction costs and did not honor a full-coverage policy.

The piece notes that, in a rare result against an insurance company, Devin and Peter won a writ of attachment against State Farm on behalf of their clients, Robert and Stacy Berman, in November. Peter explains to the Daily Journal that after losing their home entirely, the family was nowhere close to receiving compensation for the policy limits from State Farm prior to filing.

“The entire home was gone when they came back the next day, and State Farm wouldn’t even pay the policy limits,” Peter tells the Daily Journal. “They had to fight for seven months to even get them close to policy limits, and they were still hundreds of thousands of dollars away from policy limits before they had to file suit.”

Devin echoes Peter’s sentiment, adding that he believes State Farm knowingly and deliberately misrepresented the cost of reconstruction.

“The claim is that from the top of the company, it was well aware that its predictive modeling was undervaluing the claims or the cost of rebuilding, that the company knew that all of these folks that were insureds of it could be subject to not having enough insurance in the event of a catastrophe like the Palisades fire, and therefore there’s responsibility on their part for the under insurance,” Devin concludes.

In a separate article, the Daily Journal later covered a February 23 hearing, in which U.S. District Judge Mark C. Scarsi oversaw oral arguments from Peter on behalf of the plaintiffs in the case. The article states that Peter told Judge Scarsi that claims against State Farm for mail and wire fraud do not require allegations of fraudulent misrepresentation.

“They just have to be used incident to the fraudulent scheme, which I think is alleged sufficiently here,” Peter stated at the hearing.

The article notes that Judge Scarsi stated that he will issue a ruling after reconsidering the issues presented by both parties at Monday’s hearing.

To learn more about the suit and read the rest of Devin and Peter’s comments, read the full articles in the Daily Journal below (subscription required).

Palisades homeowners sue State Farm over alleged underinsurance

Judge weighs RICO claims against State Farm in Palisades fire case