Pizzeria Owner Wins Suit Over Riot Damage : Courts: Insurers are ordered to pay $7 million to Domino's franchisee. It is believed to be largest award to result from the civil unrest.

Pizzeria Owner Wins Suit Over Riot Damage : Courts: Insurers are ordered to pay $7 million to Domino’s franchisee. It is believed to be largest award to result from the civil unrest.

By ERIC MALNIC

Feb. 25, 1994 12 AM PT

TIMES STAFF WRITER

In what is believed to be the largest judgment stemming from the 1992 riots, a Los Angeles Superior Court jury has awarded more than $7 million to the owner of a Domino’s pizza franchise that was burned out during the civil disturbance.

Ordered to pay, under verdicts returned Wednesday and Thursday, were the Insurance Co. of North America and the Gold Cities Insurance Agency--which jointly refused to pay the approximately $200,000 claim submitted by Dennis Stephan, according to his suit.

Court officials said Stephan was awarded punitive damages of $6,484,790 from the insurance company, along with more than $500,000 in compensatory damages, attorneys fees and other expenses from the insurance company and the agency.

The franchise owner’s attorney, Jay Elliott, said his client feels vindicated by the verdict returned in the court of Judge Ray Bennett.

The offices of David Gorney, attorney for the agency, and Stewart Brody, lawyer for the insurance company, did not respond to requests for comment.

In his suit filed in April, Stephan said that several months before the riots, he entered into an oral insurance contract with Gold Cities under which insurance was to be provided for his pizza shop at 643 E. El Segundo Blvd., which was on an unincorporated strip of land between the cities of Los Angeles and Compton.

Elliott said his client understood that this coverage would provide him with $100,000 coverage for personal property, along with coverage for the loss of up to 12 months income. When the place was gutted by fire April 30, 1992, Stephan filed a claim for the losses, which totaled about $200,000.

The suit alleged that the companies refused to pay the full benefits to which he was entitled, saying the oral contract did not provide the coverage Stephan claimed.

In their verdicts handed down Wednesday and Thursday, the jury found that Gold Cities was negligent and that the Insurance Co. of North America breached “its duty of good faith and fair dealing.”