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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