Bad Faith Verdict against Mercury Insurance

For those who do a lot of pro bono work for Mercury (we don't pay no stinkin' mediators) Insurance Company, the following report might be of interest.

A Los Angeles Superior Court jury has returned a special verdict of fraud and breach of the implied covenant of good faith and fair dealing against Mercury Casualty Co. and awarded compensatory damages of $170,000 and punitive damages of $3 million.

At trial, Jo Anna Moore, Mercury's senior vice-president of claims, testified that her company had no property claim handling guidelines in effect during 2003 and 2004, a violation of California state law requiring all insurance carriers to maintain guidelines for the prompt processing of insurance claims. Moore also testified that Mercury's own internal training guidelines taught claims adjustors to "never use your top dollar to begin negotiations," to "use time as your ally," and to "remind claimants that a judge or jury would find them at comparative fault" if they sued. Moore also testified that when she became vice president of Mercury, those guidelines were "withdrawn."

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