Sarullo v. Transamerica Insurance Co.
Building Owner Awarded Verdict of $2.25 Million
Sam Sarullo owned a building in Bakersfield which housed a pizza restaurant
and a nightclub. While Mr. Sarullo was hospitalized in Los Angeles for
open-heart surgery, the building caught fire and 60% of it burned. The
defendant insurance company delayed payment of insurance benefits. The
carrier continuously asked for receipts of repairs made to the building,
despite notice that the receipts had burned in the fire.
Because of zoning changes, Mr. Sarullo was precluded from re-building a
restaurant on the premises and intended to instead build a commercial
building. His insurance company took the position that unless he used
the insurance proceeds to re-build a replacement restaurant on the same
piece of property (where building was now prohibited), he could not recover
the actual cash value of replacement costs; an increased benefit which
he had paid extra premiums for.
After suit was filed, the carrier paid $251,551 in benefits which it had
previously denied. Biren Law Group proved at trial that the insurance
company had acted in bad faith. The verdict was for $2.25 million more,
consisting of $400,000 in general damages, $150,000 in attorney's
fees and $1.75 million in punitive damages.
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