Jury Finds Insurer Failed Motorist, Awards $181,000

A Laguna Beach man was awarded $181,000 Friday after a jury found that his auto insurance company had acted in bad faith by failing to represent him in an accident.

Joshua Hoy was responsible for a 1996 accident that resulted in a $30,000 claim against him, but USAA Insurance Co. refused to pay, said Lee A. Wood, Hoy’s attorney.

Wood said USAA denied the claim because company officials said Hoy, 27, had failed to pay the premium and canceled the policy before the accident. However, Wood said the jury found that USAA breached its contract with Hoy and acted with malice because a dividend check in his file was more than enough to cover the $280 premium.

USAA officials could not be reached for comment Friday.

Wood said, “This young man paid the premium. He moved and gave them notice of his new address, but USAA claimed they canceled his policy for nonpayment. . . . He was never notified that his policy had been canceled.”

The attorney said USAA’s action “ruined [Hoy’s] life.” Hoy, who had worked for five years to establish a window-washing business, ended up losing that and his truck, Wood said, because of the judgment against him.

During the trial, Wood said, Hoy produced evidence that USAA had a policy of refusing to pay judgments even when ordered to do so by a court.

Wood said he expects USAA to appeal. In addition to the $181,000 jury verdict, Hoy was awarded court costs, which will be about $35,000, the lawyer said.