Jury Awards $1.5 Million in Car Case : State Farm Told to Pay in Accident Caused by Drunk

An Orange County jury awarded more than $1.5 million in damages against State Farm Mutual Insurance Co. Monday in a verdict designed to punish California’s largest seller of auto insurance for refusing to settle a claim for injuries inflicted by an uninsured drunk driver.

The verdict was in favor of Julie Gourley, 45, of Santa Ana, who suffered broken bones and chronic tendonitis after a drunk driver crossed a median on Jamboree Road on Dec. 19, 1981, and struck head-on the car her husband was driving.

“I think basically we are glad it’s over,” Gourley said after the verdict was reached in Superior Court in Santa Ana. “It seemed so preposterous from the beginning that our insurance company would blame us for an accident instead of a drunk driver.

“I’m happy the jury agreed with us,” said Gourley, a former high school English teacher with two children. “I hope the verdict will help save others from the frustration and irritation of having to fight their own insurance company when they need support.”

Jurors said it was State Farm’s attempt to avoid or limit damages because Gourley was not wearing a seat belt that justified the large verdict.

Gourley had at one time agreed to accept $60,000--more than double State Farm’s $25,000 offer, but well under the $95,000 award granted by an arbitrator in the case in 1984.

Jurors voted 9 to 3 to award Gourley $1,576,500 in punitive damages and $15,765 as compensation.

Compromise Figure

The figure, which jurors said was a compromise, is in addition to compensation Gourley received after arbitration--a procedure required by the policy--and was intended to punish State Farm for the “malice, oppression and fraud” the firm showed in failing to deal fairly and in good faith with the Gourleys.

State Farm attorneys asserted that they were justified in raising a valid legal defense--a claim attacked as “foolish, absurd, silly, preposterous and senseless” by Santa Ana lawyer Wylie A. Aitken, past president of the powerful California Trial Lawyers’ Assn. and a consistent courtroom foe of the insurance industry.

California motorists now are required to use seat belts, a statute not in effect at the time of Gourley’s accident. The fact that more drivers are buckling up today means the standard of care is higher, and failure to wear a seat belt is more likely to be considered as careless by a jury, State Farm attorney James L. Crandall said.

But Aitken pointed to surveys that showed fewer than 20% of all Californians used seat belts five years ago.

The jury award was not a record but was a bitter pill for State Farm, which writes more auto and fire insurance than any firm in the country and just last year was rated among the best in California in terms of customer complaints, according to a study of justified consumer complaints compiled by the state Department of Insurance.

Jury foreman John Andrew, 45, of Mission Viejo said he had pressed to award greater damages. But other jurors were concerned that the firm would raise rates to cover any award, Andrew said.

“I really do think State Farm won this case,” Andrew said after the verdict was issued. “I don’t think there is a number we could have come up with that State Farm wouldn’t make money with. They will use that to raise premiums.”

Andrew, a drivers’ education instructor at Silverado High School, said he has threatened to flunk student drivers who fail to buckle up. But he acknowledged that six years ago he often forgot himself.

Will Consider Appeal

Crandall said State Farm will consider an appeal. He said the firm may ask Orange County Superior Judge John C. Woolley, who presided, to order a reduction in damages or grant a new trial.

Crandall sought to turn legal tables on Aitken, contending that the plaintiff’s lawyer was the one who failed to deal with State Farm in good faith and claiming that the firm never received up-to-date information on Gourley’s injuries.

But Aitken said Monday’s verdict should “send a message” to insurance firms about the need to deal fairly with customers. “How can you blame a person who’s sitting there minding their own business? They’re supposed to anticipate that some drunk driver would cross over and hit them?” he asked.

“The legal standard is the ordinarily prudent person, and it’s clear that person would not wear a seat belt back then (in 1981),” he said.

Crandall said he thought the case was an “isolated” one. “This is a unique case. There are very few seat-belt cases that get to trial. I don’t think the jury’s saying State Farm’s a bad company,” he said.