A Victoria couple is suing State Auto Insurance for $7.5 million, claiming the company caused their business to go under by failing to compensate them for a devastating 2016 fire.
“You buy insurance for peace of mind and security. It ought to protect a client from tragedy – not cause (it),” said Marvin Jones, an Amarillo attorney representing the couple, to jurors during his opening statement Tuesday.
Victoria attorney Bernard Klimist, who is representing State Auto Insurance, disagreed with that portrayal of the case, saying the business folded because of a declining oil industry rather than any failure by his client.
“This case stretches back to 2011 when oil was priced at $110 a barrel,” Klimist said in his opening statement. “Four days after the fire, oil was at $27 a barrel. … It’s not always the big, bad insurance company at fault.”
Testimony in the trial over the lawsuit filed against State Auto by Wayne and Kelly Pozzi, the former owners of Excalibur Rentals, began Tuesday morning and continued through the week. Jurors will decide an appropriate amount of monetary damages to award the Pozzis if they find the insurance company liable.
“That’s what’s called a 401(k) retirement,” Klimist said of the damages request. He added he thought the lawsuit was an attempt by the Pozzis to cash out on a failing business.
Klimist estimated the trial would last well into its second week. Testimony is scheduled to resume 9 a.m. Monday.
The trial comes more than three and a half years after a fire razed a 16,000-square-foot industrial building housing the Pozzis’ oil-field equipment rental company, Excalibur Rentals, 16108 Northwest Zac Lentz Parkway, in February 2016.
Jones said although an Excalibur employee caused the fire, the resulting damage should have been covered by State Auto’s insurance agreement.
According to their lawsuit, the total payout was assessed at $1,115,963.30.
That payment was completed by May 28, 2018, “but only after unreasonably delaying payment and failing to conduct a reasonable investigation,” the lawsuit states.
More than two years had passed.
State Auto also was required to pay off the destroyed business’ mortgage, which was about $7,500 each month, but did not do so until July 28, 2017, almost a year and a half after the blaze.
The insurance company was required to pay that mortgage even if it refused the Pozzis’ claim, which was required to have been paid or denied within 90 days.
“During the interim, plaintiffs were required to make mortgage payments to Wells Fargo on a building that no longer existed,” the lawsuit states.
And the financial difficulties imposed by those continuing payments caused Kelly Pozzi to suffer a stress-induced autoimmune disease that caused her considerable pain, Jones said.
That disease manifested after the fire and was documented by physicians, he said.
“There are things that could have been avoided had there been a timely payout,” Jones said.
State Auto representatives repeatedly delayed the payout for the fire, Jones said, in part because they sought to prove the Pozzis had lied on their insurance application.
They began looking into a single response on the application – that no explosive devices were present on the property – after learning through a newspaper article that fire officials had contradicted that claim.
But Jones said the Pozzis had simply signed the insurance application without reviewing it and the “no” answer to the question regarding explosives had been completed automatically by a computer system.
Jones said that meant the Pozzis had not lied and their claim should have been valid.
Jones added that State Auto waited month after month to contact Victoria insurance agent Jim Fly, delaying the payout pointlessly.
Finally on May 9, 2016, that delay caused Fly to write to State Auto representatives to demand they take action.
“You need to pay this man. If you don’t pay this man … we’re going to get dragged into court,” that letter reads.
Jon Wilcox reports on courts for the Victoria Advocate. He may be reached email@example.com or 361-580-6515.