Federal Judge Sues Texas Insurance Firm : * Court: Laughlin E. Waters of Los Angeles alleges that the firm acted in bad faith after his house was damaged by fire.

In an unusual move, veteran Los Angeles federal Judge Laughlin E. Waters filed a lawsuit on his own behalf Friday, alleging that a Texas insurance company acted in bad faith in handling Waters’ claim after his Hancock Park house was seriously damaged in a fire.

Waters, 76, appointed to the federal bench 15 years ago, said it was the first time in his long legal career that he has filed a suit on his own behalf. “It was with great reluctance that we filed, but we were compelled to do it,” he said in a brief interview.

Unless the case settles, it will be necessary for a federal judge from another district to be brought in to preside. All the judges in this district would have to recuse themselves because of their relationships with Waters.

The suit, filed in federal district court here, alleges that Waters’ insurer, United Services Automobile Assn. of San Antonio, breached its duty of good faith and fair dealing.

The complaint asserts that the company attempted to “low-ball” Waters and his wife, Voula, on repairs to their large, elaborately decorated home, which suffered severe fire damage last December. For example, an estimate submitted for the cost of repairs put a figure of $3,500 to replace an antique silver Waterford chandelier, which the Waters’ say has a value of $18,000 to $24,000.

Overall, the Waters’ suit contends, the estimate was about $120,000 below what they say is the true cost of repairs.

United Services declined to comment.

The judge’s attorney, William M. Shernoff of Claremont, asserted that it was a “common practice for insurance companies to attempt to pressure individuals into” taking less than they are entitled to in situations similar to this case.

“But they picked the wrong guy,” he said of Waters. “He’s not going to knuckle under.” Shernoff said Waters’ life had been thrown into turmoil by the intransigence of the insurance company, forcing them to rent a house for the past seven months and causing them considerable mental distress.