Have you ever wished you had done just one more thing with a close friend or relative before they passed? Kermith Sonnier promised and invited me to watch him cook and taste his gumbo. When a true Cajun makes such an invite, don’t miss the treat.
Many understandably thought of Kermith Sonnier with bewilderment. How could a person with a language that is often not decipherable successfully work in the adjustment and expert witness world of property insurance? Most do not know the rich professional history of my friend.
The landmark adjustment and case Kermith Sonnier will be most known for arises out of the Northridge Earthquake, where Kermith sued Farmers for improper claims practices and won a $9 million verdict, as reported in the Los Angeles Times. 1 The Farmers’ appellate brief noted Sonnier’s professional adjustment history leading up to that verdict:
Plaintiff Kermith Sonnier was hired in 1979 by an independent catastrophe insurance claims adjusting firm, Crawford and Company. Crawford trained him as an insurance claims adjuster and sent him from catastrophe to catastrophe across the United States (hurricanes, floods, oil spills) to adjust catastrophe insurance claims and to monitor remediation on behalf of the insurers that contracted for Crawford’s services. Sonnier became licensed as a general insurance adjuster in Texas and Oklahoma, and he gained experience adjusting claims and supervising others.
In 1993, Sonnier left Crawford and joined Pilot & Associates, another independent insurance claims adjusting firm, to help establish a new environmental cost control division and to assist with business development for its commercial claims adjusting services. For Pilot’s environmental-cost-control venture Sonnier was a salaried employee, with a $3,000 monthly salary, health insurance and benefits, and paid vacations. Sonnier also worked as a catastrophe claims adjuster, a ‘storm trooper,’ for Pilot’s clients. As a catastrophe claims adjuster, however, Sonnier had no commitment as to where Pilot would send him, how long he would be asked to work, or whether he would be called at all. Along with Pilot’s other independent adjusters, he entered into a written agreement with Pilot for his claims adjusting services, agreeing with Pilot that he would work ‘when needed and when available,’ he would determine the number of hours required for the assigned tasks, he would hire the staff and equipment needed to prepare the reports required for his work, and he would maintain his own insurance…
Pilot asked Sonnier to go to Southern California to work as an adjuster following the massive January 17, 1994 Northridge earthquake. He arrived on January 20, and the very next morning began working as one of a number of independent commercial claims adjusters Pilot provided to adjust claims on behalf of the Exchange and affiliated entities. The Exchange’s contract with Pilot called for Pilot to provide it with ‘independent adjuster’ services. The Exchange also staffed the earthquake catastrophe with its own in-house adjusters and with independent adjusters from another catastrophe claims adjusting firm, Wardlaw Claims Services.
From January 21, 1994 until August 8, 1997, over three and one-half years, Sonnier remained in Southern California adjusting earthquake claims. Sonnier evaluated policyholders’ earthquake loss claims, estimated the cost of covered repairs, recommended to the Exchange appropriate reserves, obtained advance payments if requested by the insured, regularly advised policyholders of the status of their claims, and determined whether and when repairs had been completed and other prerequisites met that would entitle a replacement-value policyholder to recover additional benefits. He was considered one of the better commercial adjusters on the project by those with whom he worked at the Exchange, and he received top reviews from policyholder representatives.
In January, 1994 Sonnier and the other Pilot and Wardlaw adjusters were instructed to identify themselves to policyholders as Farmers representatives, and for that purpose they were told to purchase items such as magnetic car-door signs, jackets, and hats with the Farmers logo, and they were advised to use calling cards and stationery that referred to them as Farmers’ representatives. However, in May 1995, still more than two years before Sonnier’s work ended, the Exchange instructed Pilot and Wardlaw to end that practice and to have the independent adjusters thereafter identify themselves as Pilot or Wardlaw adjusters working on the Exchange’s behalf.
Kermith Sonnier was a hard-working, successful independent catastrophe adjuster long before he became a public adjuster. There are many lessons from this case about how “storm trooper” catastrophe adjusters go about their work, appearing to be actual employees of various insurance companies while actually being employed by an independent adjustment company. However, the point of this landmark lawsuit is that the primary carrier actually controls what and how the independent adjuster does the work.
Farmers’ brief noted how Kermith complained about Farmer’s unfair claims practices, which led to him being asked to return his files and then his suit against Farmers for retaliatory discharge:
Sonnier testified that he complained to the Exchange’s personnel that its handling of a number of issues was improper and unfair, all to no avail.
…
On August 7 or 8, 1997, the Exchange told Sonnier to turn in his remaining files for reassignment…
Sonnier sued, claiming wrongful employment termination in violation of public policy. He alleged that in reality he was the Exchange’s employee and that the Exchange violated public policy by terminating that employment in retaliation for his asserted complaints about its claims handling practices. His evidence to that effect was purely circumstantial. It consisted primarily of two circumstances: (1) everyone (including the supervisors to whom Sonnier said he complained about the Exchange’s practices) rated Sonnier as one of the better commercial claims adjusters on the job and (2) although Sonnier said he had voiced his complaints throughout 1995, 1996, and 1997, the Exchange released him after (he claimed) he had complained with increasing frequency and acrimony in 1997.
Kermith privately told me that he refused orders from Farmers claims managers to wrongfully change his estimates because his license and ethical obligations prevented him from wrongfully underpaying Farmers policyholders. Obviously, the jury agreed and found for him with the blockbuster $9 million award, which I often reference in my speeches about ethical claims practices.
The American Association of Justice described the case as one of the worst examples of widespread claims handling: 2
Farmers’ most high-profile run-in with state regulators occurred in California after the 1994 Northridge earthquake, which killed 72 people, injured nearly 12,000, and caused over $12 billion in damages. Many of the homeowners were covered by Farmers. Despite paying out over $1.9 billion for 37,000 claims, the company was hit with a wave of bad faith lawsuits for failing to pay policyholders the full value of their homes. In one case, a Farmers’ subsidiary was sued for bad faith and fraud by a condominium homeowners association after the company refused to pay to rebuild the severely damaged building. The homeowners, who were mostly minorities, were helped in their case by the testimony of a former claims adjuster, Kermith Sonnier, who admitted that a supervisor told him to settle the claim for a target amount, despite never having seen the damage firsthand. In March 2000, over six years after the quake struck, a jury awarded the homeowners association $3.98 million in compensatory damages and was deliberating punitive damages when Farmers agreed to settle the case for $20 million. Sonnier, who had been fired by Farmers, also successfully sued the company for compensatory and punitive damages.
None of the story above should be a surprise if anybody spent any substantial time with Kermith Sonnier. You would know the man could be stubborn and very opinionated if somebody was doing wrong. For example, in a 2008 Hurricane Ike claim, he once accused the late Steve Mostyn of wrongfully attempting to increase the amount of an estimate Kermith prepared. Mostyn had hired Kermith as the expert estimator, and Kermith was not going to say anything other than his view of the truth and what the proper amount should be. Steve called me knowing of my friendship with Kermith and protesting about Kermith refusing to consider portions of the damage and asked if I could do something about Kermith. I laughed and told Mostyn nobody could control Kermith once he made his mind up about something.
Even a cursory search of “Kermith Sonnier” will indicate that Kermith was actively engaged in property insurance litigation. He was always trying to talk attorneys, including yours truly, into bringing whistle-blower qui tam lawsuits 3 versus insurance companies doing National Flood work. He was listed in hundreds of cases as an expert witness, usually in Texas and Louisiana hurricane cases as an estimator.
Kermith’s partially successful wage and hour claim versus Crawford made it all the way to a petition for writ of certiorari 4 with the United States Supreme Court where Crawford noted:
From 1983 until October 1993, Sonnier worked on a part time basis for Crawford as a catastrophe adjuster. Sonnier started to work for Crawford on the Ashland oil spill, in Pittsburgh in January of 1988. From March of 1989 to October of 1989 he worked in Alaska on the Exxon oil spill and then returned to Pittsburgh where he worked on the Ashland oil spill through June of 1991.
Sonnier filed his action in the U.S. District Court for the Western District of Pennsylvania on October 18, 1994 against his former employer, Crawford, for (i) vacation pay for the period from 1984 to Sonnier’s termination of employment with Crawford in September, 1993, and (ii) overtime pay under the Fair Labor Standards Act for work performed from 1988 through June of 1991. On September 23 and 24, 1996, the District Court…conducted a non-jury trial on Sonnier’s claims. The District Court ruled in favor of Crawford and against Sonnier with respect to his vacation pay claim… However, it ruled in favor of Sonnier and against Crawford on Sonnier’s claim for overtime pay under the F.L.S.A. for work in excess of 40 hours per week…
Kermith enjoyed it whenever I brought my better half, Donice Krueger, along to our meetings. He was a religious man and gave Donice these two prayer medals. One is of Joan of Arc, and the other of Saint Isidore:
Given how Joan of Arc was so loyally French, stubborn and unrepentant, leading to her execution, I understood why Kermith would have that metal in his possession.
Kermith Sonnier was intellectually curious and always asking my opinion about legal precedent and Xactimate software miscalculations. It was always with a gleam in his eye and a wiry smile about how we were going to find the insurance company adjusters and experts up to no good by chiseling on claims payments.
I always smiled and laughed when I saw his face or learned of an attorney in our firm hiring Kermith as an expert. Kermith usually filed two resumes in cases rather than just one. He told me the judge had to know about his personal and professional backgrounds. I did not find much difference because his work and fondness for it was a major part of his life.
The video of the day is worth your time to better understand and appreciate this Cajun property insurance and public adjuster.
I will miss him, and all of us are at a loss when we lose such colorful and unique personalities. I deeply regret missing the experience of his gumbo. Maybe that regret is the most important lesson of this post.
Thought For The Day
The Cajun people have a wonderful sense of humor and a zest for life.
—George Rodrigue
Video of the Day
1 $9 Million Awarded to Fired Quake Insurance Adjuster, Los Angeles Times, (Feb. 23, 2000).
2 The Ten Worst Insurance Companies In America, American Association for Justice (2008).
3 U.S. ex rel. Sonnier v. Allstate Ins. Co., 3:09-cv-01038 (M.D. La. [Complaint filed Dec. 11, 2009]).
4 Crawford & Co. v. Sonnier, No. 97-1426 [Petition for Writ of Certiorari] (Mar. 2, 1997).
