Jury Awards $32 Million

AUSTIN — A Travis County District Court jury awarded a Dripping Springs family $32 million Friday after finding that a subsidiary of Farmers Insurance Group mishandled the family's homeowner's claim for black mold damage.

The jury concluded that Farmers Insurance Exchange committed fraud in the way it dealt with Melinda Ballard and her husband, Ron Allison.

In the lawsuit, the couple said the company failed to adequately and swiftly cover repairs for a water leak, allowing the toxic mold stachybotrys to overrun their 22-room mansion and damage their family's health.

"The message this sends is how important it is for insurance companies to deal with people's problems promptly, instead of using delay tactics to try to coerce people into taking less," Fred Hagans, a Houston lawyer who represented Ballard, said in Saturday's editions of the Austin American-Statesman.

Hagans said instead of trying to fix the problem, the insurance company looked for every possible way to cut its costs, and even failed to acknowledge that the toxic mold had spread to the family's separate living quarters.

Bill Miller, a spokesman for Farmers, said the company would decide whether to appeal the case after seeing if Judge John Dietz reduces the jury's award when he enters the judgment.

"If an appeal is necessary, we're confident we will prevail," said Miller, who declined further comment.

The jury agreed 11-1 to award the family $6.2 million in actual damages, finding that the house will have to be decontaminated, leveled and rebuilt. They also awarded $12 million in punitive damages as an example to other insurers, $5 million for mental anguish and $8.9 million in lawyers' fees.

Attorneys for Farmers agreed Ballard's home was contaminated, but said she was only due $1.8 million to cover cleanup of the house. They argued that Ballard contributed to the problem by refusing to make repairs with the insurance checks that were issued.

Hagans countered that the insurance company repeatedly agreed to pay for repairs weeks or months past the point when those repairs would have fixed the growing problem.

The family originally sought $100 million based in part on allegations of severe health problems.

However, Dietz ruled that lawyers could not introduce medical testimony on the health effects of mold because a Texas Supreme Court decision mandates a level of scientific proof that has not yet been reached.