Homeowner sues FAIR Plan over denied Eaton Fire claim

An Altadena homeowner has filed a lawsuit against the California FAIR Plan Association, accusing the state's fire insurance provider of bad faith after it denied his claim for property damage allegedly caused by the Eaton Fire -- despite the policy being issued just one day before the blaze began.

"We are seeing a clear and troubling pattern with the FAIR Plan systematically delaying, denying and, in the case of our client William Hutchinson, outright rejecting valid wildfire claims," said Kiley L. Grombacher, the attorney representing the homeowner.

Hutchinson claims he discovered the damage to his property and its contents on Jan. 12, five days after the Eaton Fire ignited. He informed the California FAIR Plan Association the following morning by telephone and was given a claim number, he said. He received a reservation of rights letter on Feb. 15 and a status letter on March 2 informing him that further review was needed, his complaint said. The California FAIR Plan Association informed him on April 13 that his claim was denied, his complaint said.

The lawsuit claims insurance bad faith and breach of contractual duty. It notes that the policy was issued to Hutchinson on Jan. 6, one day before the fire broke out. He said he made an electronic payment on Jan. 8, which the CFPA allegedly processed. William Day Hutchinson v. California FAIR Plan Association, et al., 25STCV16444 (L.A. Super. Ct., filed June 5, 2025).

Grombacher is a co-founding partner of Bradley Grombacher LLP. The firm partnered with Aylstock, Witkin, Kreis & Overholtz PLLC at the California Fire Victims Law Center. These firms and others have accused the FAIR Plan of delaying or underpaying claims stemming from the January wildfires.

The California FAIR Plan is a state-mandated insurance program designed to provide basic property insurance to homeowners and businesses who can't get coverage through the regular insurance market, usually because they live in high-risk areas for wildfires or other disasters. Lawsuits against the Fair Plan soared following the Los Angeles County wildfires, and it is accused of stonewalling thousands of insurance claims.

Hutchinson's complaint was filed one week after the FAIR Plan's president asked the state Assembly to pass a bill to shift homeowners from the insurer of last resort back to the private market.

"We're going to have to get to a point where we can depopulate," FAIR Plan President Victoria Roach told the Assembly Insurance Committee on May 29. "I think everybody wants that. It is part of the sustainable insurance strategy."

Meanwhile, a redacted letter posted on X that appears to have been sent from the California FAIR Plan tells a Malibu property owner that he has two claims and two deductibles stemming from the Palisades Fire, one for wind damage to the roof, and another for the fire damage itself. A FAIR Plan representative did not confirm or deny the authenticity of the letter but referred the request to a public relations representative.

"The California FAIR Plan cannot comment on individual policies or claims. We can share that the California FAIR Plan evaluates each claim on its own merits, and that the FAIR Plan pays all covered claims consistent with California law and its policy forms, which are approved by the California Department of Insurance," the PR representative, Hilary McLean, CEO of ALZA Strategies, wrote in an email.

If the letter is real, the FAIR Plan's position does not hold up well to legal scrutiny, according to an insurance recovery specialist who reviewed the copy of the letter that was posted online.

"Here, it's reasonable to conclude there was a single occurrence because the wind and fire were part of the same firestorm, conceptually, temporally, and the wind is what brought the fire to the property and the law is going to side with the insured's objectively reasonable expectations," said Merlin Law Group's senior managing attorney, Daniel J. Veroff.

"I would expect the FAIR Plan to argue their interpretation is reasonable because damages caused by wind versus fire are demonstrably distinct. But even if that's a reasonable interpretation, the law will side with the insured's reasonable expectation in the event of a tie," Veroff continued.