Jury rejects $20M claim for Montecito mansion damaged in fire

A jury in Los Angeles returned a complete defense verdict for Federal Insurance Company. The plaintiff sought $20 million because the insurer refused to finance restoration of her Montecito mansion partially destroyed by the 2017 Thomas wildfire and subsequent flood.

“We were able to tell a very bulletproof story, and we trusted the jurors to set aside all emotions and knee-jerk reactions, follow the facts, and get the right result,” said Leah Godesky, a partner at O’Melveny and Myers LLP, who led the defense for the Chubb-owned insurance company.

Attorneys at Foran Glennon Palandech Ponzi and Rudloff PC were also on the defense team.

David M. Halbreich, a partner at Reed Smith LLP, was the plaintiff’s lead lawyer. He could not immediately be reached for comment.

At trial, the plaintiff claimed that the insurance company violated a policy “to fully indemnify” her for damage to her Montecito mansion. The jury trial, which began on Jan. 2 before U.S. District Judge Christina A. Snyder in Los Angeles, lasted 10 days. The jury reached a unanimous verdict on Jan. 17, after two hours of deliberation, according to the defense. Katherine L. Malkin v. Federal Insurance Company, 2:21-cv-00172 (C.D. Cal., filed Jan 8, 2021).

Godesky said she was able to convince the jury that the plaintiff already received a $1 million insurance payment for smoke and water damage and had plans to demolish the property and build a new home “well before the 2018 Thomas Fire that was at the center of Malkin’s claim.”