Farmers Insurance is entitled to a new trial of a lawsuit brought by a former staff attorney who was awarded $150 million in punitive damages — in addition to $5.4 million in compensatory damages — unless the plaintiff accepts a reduced punitive damages award of less than $20 million, a judge has ruled.
Los Angeles Superior Court Judge Ruth Kwan heard arguments on the insurer’s motions for a new trial and judgment notwithstanding the verdict on May 13 in the lawsuit brought by Andrew Rudnicki, took the matters under submission and ruled Friday.
She denied the motion for judgment notwithstanding the verdict, but found the punitive damages to be excessive.
The judge said Farmers will get a new trial unless Rudnicki accepts a punitive damages award of $18.9 million. She gave him until June 10 to make a decision.
The jury deliberated for a short time before issuing the punitive damages award to the 70-year-old Rudnicki on Dec. 16, ordering Farmers Insurance Exchange and Farmers Group Inc. to each pay $75 million.
The second phase of trial to determine Rudnicki’s punitive damages was triggered when the jury concluded that an officer, director or managing agent of at least one of the defendants acted with malice, oppression or fraud against Rudnicki.
Rudnicki says he was fired because he was blamed for the adverse results of a gender inequity suit against Farmers and due to complaints about him to the human resources department, according to his court papers. Rudnicki was a witness in the gender case.
His firing ended a 37-year career with the insurer.
“I felt crushed and experienced shock, depression and embarrassment for a long time thereafter,” Rudnicki said in a sworn declaration. “I also endured fitful sleep and loss of appetite for at least three or four months.”
In their court papers, Farmers attorneys argued that the evidence was insufficient to prove the claims. They called the jury’s punitive damages award “grossly excessive and unconstitutional.”
The disparity ratio between the amounts of compensatory and punitive damages, about 28 to 1, arose not from any “physical trauma, violence or racial discrimination, but rather from alleged retaliation against a high-level executive who retired with millions from his job at Farmers Insurance Exchange,” according to the defense attorneys’ court papers.
Rudnicki’s lawyers “paraded a series of positive character references falsely portraying Rudnicki as a champion of women’s rights” while the Farmers attorneys “were forced to sit on the sideline,” according to the defense team’s court papers.