Trial Magazine

Jean Pierre Khoury and Lisa Khoury insured their home, which was built on a concrete slab foundation, with State Farm General Insurance Co. Under the terms of the policy, the insurer was to provide coverage and benefits to the Khourys for all covered losses.

In 2019, a copper water pipe supply line in the concrete slab burst, causing water damage to the property. The Khourys timely reported the incident to State Farm and hired a plumber to replace the failed water line. They also retained a water mitigation company to dry the property.

State Farm concluded that the failed pipe was below the concrete slab, and, therefore, the resulting damage fell under an exclusion to the policy.

The Khourys sued State Farm, alleging breach of contract and breach of the implied covenant of good faith and fair dealing. The plaintiffs argued that the defendant had failed to inspect their property in connection with the claim and failed to train and supervise their adjusters regarding the claim. Moreover, the plaintiffs asserted that the defendant was untruthful regarding their claim.

The jury awarded the Khourys more than $639,500, including $500,000 for emotional distress.

Citation: Khoury v. State Farm Gen. Ins. Co., No. 20TRCV00601 (Cal. Super. Ct. Los Angeles Cnty. June 18, 2024).

Plaintiff counsel: AAJ members Boris Treyzon, Sara McClain, and David Bederman, all of Encino, Calif.