Jury Makes $12-Million Award to Homeowners : Courts: Judgment is made in suit against insurance company over crack that developed in Bonita home.

A Bonita couple has won a $12-million judgment against an insurance company that denied their 1987 claim for structural damages to their home.

A Superior Court jury in El Cajon ordered the Transamerica Insurance Co. to pay Denise and Dominick Tomaselli $11.3 million in punitive damages and $500,000 in compensatory damages, in addition to $260,000 to fulfill the claim, said Jack Winters, the attorney representing the Tomasellis.

The Tomasellis discovered a half-inch crack running through the floor of their kitchen in 1987 and filed a claim for the damages with Transamerica, which had been their insurance carrier since 1977, Winters said.

The insurance company at first agreed with the claim for the repair, which would have cost the company about $200,000, but then denied it, saying that the Tomasellis should have addressed the problem four years earlier when a hairline crack was discovered in the bathroom, Winters said.

“Eleven million in punitive damages is literally a day and a half of net profits after taxes for Transamerica,” Winters said, defending the large judgment that was handed down on Monday.

“This would be akin to a $300 fine to a person who makes $50,000 a year after taxes,” he said.

But Transamerica plans to appeal both the jury’s finding of fault and the amount of the judgment, its attorneys said.

“Needless to say, the check is not in the mail,” said Colin McRae, general counsel of Transamerica, who plans to appeal, alleging trial errors and an inflamed jury.

“Just by the size of the verdict compared to the amount of damage suffered by these folks, it’s almost intuitively excessive. This is a significant amount of money to us,” McRae said.

The company’s first recourse will be to ask Superior Court Judge Donald Meloche, who heard the case, to reverse the jury’s findings or reduce the judgment, McRae said. If is not satisfied with Meloche’s decision, it will ask the Court of Appeal to hear the case, he said.

The award is the largest bad-faith judgment ever levied against the insurance giant, McRae said.

But even Winters expressed doubt that the Tomasellis, who are now divorced and rent out the Bonita home, will ever see a dime from the insurance company.

“They won’t (pay the claim) because they will appeal it all the way to the Supreme Court, and, even if they do pay, the manner in which they treat thousands of other claims still puts them ahead,” said Winters, who contends that the insurance company systematically acts to deny valid claims.