Jury Awards Allstate in False-Claims Suit

A federal jury awarded Allstate Insurance Co. $3 million in damages against a building contractor and others for filing false claims after the Northridge earthquake, attorneys said Monday.

Allstate lawyers charged that the contractor, an engineering company and an insurance adjuster submitted inflated invoices for work that was unnecessary or never performed at properties in Malibu and the San Fernando Valley.

The Santa Ana jury handed down a unanimous verdict in favor of the insurance company, awarding $3 million in punitive and compensatory damages, said Allstate attorney James E. Fitzgerald.

“Insurance fraud hurts everyone except the crooks who profit from it,” Fitzgerald said. “Fortunately, the jury recognized that the defendants tried to capitalize on a catastrophic situation for their own personal gain.”

“It’s unusual for an insurance company, much less any corporation, to be awarded such a substantial amount,” Fitzgerald added. “It shows the disdain for this kind of conduct.”

The three defendants found liable were Harry Booth, a former employee for an independent insurance adjusting firm; Don Ames of Western States Geotechnical; and Gene La Porte of Dunn Rite Construction Co., all of whom refused to take the stand during the trial, said Fitzgerald and defense attorney Stephen Garcia.

Tom Conrad, an employee of Western States Geotechnical and a contractor with William Morretti, agreed to pay $400,000 in restitution for their roles in the conspiracy, Fitzgerald said.

Garcia, who represented defendants Booth and La Porte, said he wasn’t allowed to present evidence that would have helped the jury understand his clients’ side of the story.

“The jury was not told that my clients had cooperated with federal authorities and gone on ‘20/20’ in an effort to expose Allstate’s conduct,” Garcia said. “That’s why they got sued.”

Lawrence Longo, the attorney for Ames, could not be reached for comment.

Fitzgerald said the defendants had an opportunity to proclaim their innocence on the stand but refused.

As for their cooperation, he said, “They claimed to be whistle-blowers, but how can you be a whistle-blower if you refuse to testify and plead the 5th Amendment?”