WOODWARD — A judge found Farmers Insurance and its subsidiary, Foremost Insurance Group, liable for more than $15 million for claims three residents made after a tornado here on April 15, 2012.
District Judge Ray Dean Linder on Feb. 28 awarded each of the three plaintiffs — Sterling Parks, Jeff and Mary Sharpe and Kim and Linda Louthan — $2 million each for bad faith and breach of duty and $3 million each in punitive damages.
In addition, for breach of contract, Parks was awarded $49,278.26, the Louthans were awarded $224,202.82 and the Sharpes were given $245,967.58.
“I was shocked at the disservice that was rendered by the defendants in each of the three cases,” Linder said in his verdict.
The companies were found guilty of fraud, actual and presumed malice and acting with a complete indifference to a duty to treat their policyholders fairly.
In response to the verdict, a spokesman for Farmers offered this written statement: “We are reviewing the court’s decision and evaluating our options.”
Attorney Jeff Marr, who filed the case in August 2012 on behalf of the homeowners, said the insurers’ actions included underpaying claims and using engineers they knew would offer low estimates. He said the same conduct has been seen by Farmers and other insurers after other destructive tornadoes in the state.
“They had no plans to change anything,” Marr said. “One told me they couldn’t tell how big the verdict would have to be to change things.”
In 2006, Marr led a successful class action lawsuit against State Farm Fire & Casualty Co. for families whose homes were damaged by the May 3, 1999, tornadoes.
In that case, a Bridge Creek couple were awarded nearly $13 million, including $9.9 million in punitive damages and $3 million in actual damages.
The company settled with 70 others outside of court.
Marr also represents more than two dozen clients in cases resulting from the May 19 and 20 tornadoes.
One homeowner’s story
When the tornado barreled through Woodward on April 15, 2012, Parks wasn’t concerned about his own home.
A Woodward police officer at the time, Parks worked through the night responding to the disaster in his community.
“I had insurance, so I wasn’t worried at all,” Parks said.
“I just figured I’d call my agent and everything would be fine,” Parks said.
When his insurer said there were no signs of structural damage, he hired his own engineer, who said the home was totaled.
The payment Parks did receive was used for repairs, he said, but he also had to take out a second mortgage.
For now, he’s still living in the home.
“I notice new cracks every day. You can hear the wind at night in the ceiling. It’s never going to be the same,” he said.
Now a firefighter, Parks said he’s looking forward to receiving his settlement so he can buy a new house and get out of debt — but he doesn’t intend to quit working.
“My life has been on hold basically for two years,” he said. “It’s nice knowing I will eventually get something.”