A $7-Million Order : Pizza Maker Tastes Victory After Suing Insurance Firm Over Riot Loss
Dennis Stephan may soon be rolling in dough.
And we’re not talking about the pasty base to that Pepperoni and Sausage Deluxe that he was happily flipping in the air Tuesday.
The 33-year-old Willowbrook pizza maker was wearing an ear-to-ear grin because of a $7-million verdict he has won against an insurance company that failed to honor its policy after his Domino’s Pizza outlet was destroyed in the 1992 riots.
Instead of the $225,000 in coverage that he thought he would be paid for his store in a gutted strip mall, Stephan was offered a $20,000 settlement by the Philadelpia-based Insurance Company of North America.
In the superheated fast-food business, that’s barely enough to replace a single oven--not a computerized, stainless steel-and-tile high-speed kitchen capable of cranking out a pizza-to-go every 30 seconds.
Soon, parts of Stephan’s life were starting to topple like dominoes.
He had to permanently lay off his 20 employees at the wrecked store at 643 E. El Segundo Blvd. Then he started falling behind on bills at the two other pizza outlets he runs in neighboring Carson. As he tottered on the brink of closing them too, the bank foreclosed on his family’s home in Redondo Beach.
“I’m a pizza man, not a lawyer,” Stephan says. But when the insurance company stubbornly ignored his protests that the policy number on the settlement offer was mysteriously different from that on his pre-riot insurance certificate, he sued.
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After a 2 1/2-week trial in Los Angeles that ended last week, a jury awarded Stephan $249,416 in compensatory damages and another $6.5 million in punitive damages. Legal experts say the judgment is the largest of its type to emerge from the riots.
“Nobody should have to go through what I’ve been through,” Stephan said, taking a breather at one of his Carson outlets after positioning pepperoni, sausage, green peppers, onions and mushrooms on the Deluxe and whipping it onto the oven conveyor belt.
“I can’t describe what it felt like when my livelihood went up in smoke. And I can’t describe what it was like afterward--my insurance company put me through hell.”
On April 30, 1992, Stephan was watching television when his burning store flashed on the screen. But it was his future that flashed before him 12 days later when the insurance company rejected his claim.
He tried to employ his Willowbrook workers at the Carson stores, but soon those outlets were in jeopardy too. With his cash flow cut by a third, Stephan rapidly fell behind in paying his landlords, the utility companies and the vendors who supply him with pizza ingredients.
He was about $200,000 behind in his business bills when the bank foreclosed on his Redondo Beach home. Stephan, his wife, Josie, and their 6-month-old son, Jacob, have been ordered out by the end of next month.
“Bill collectors are calling constantly, every day,” said Stephan’s 35-year-old brother, Norm, who works as business manager for the franchises.
Said Stephan’s lawyer, Stephen L. Thomas of West Los Angeles: “He’s been absolutely destitute. It’s taken a lot of grit to hold on when he didn’t really have the wherewithal to hold on.”
Attorneys for the insurance company did not return calls Tuesday. But the case is not yet over, said Mike Krill, whose staff acted as agents for Insurance Company of North America. He has been ordered to pay a $249,000 share of the judgment.
“We are certain that the verdict is not justified,” said Krill, president of an insurance agency in Northern California. “We hope that further legal proceedings will correct the situation.”
Stephan said he is not worried about an appeal. And he vowed that becoming an instant millionaire will not change him.
He plans to invest his award in new Domino’s outlets in the Compton-Carson-Willowbrook area. “I want to help rebuild L.A. while I rebuild myself,” he said.
