Firm News

Judge Finds Grounds to Sue California Insurance Commissioner for Refusing to Investigate Industry Fraud in Recent Wildfire Claims

April 1, 2019 Announcement

Lawsuit Alleges Insurance Industry Has Illegally Used Unlicensed Out-of-State Adjusters to Cheat Victims of 2017 and 2018 Wildfires

SAN FRANCISCO, April 1, 2019: A judge is permitting a survivor of the 2017 Tubbs Fire and an advocate for wildfire victims to sue the California Department of Insurance for letting unlicensed out-of-state insurance adjusters work illegally in California and cheat thousands of recent wildfire victims.

San Francisco Superior Court Judge Ethan Schulman ruled that the suit Eisenberg v. Jones alleges facts showing that insurance companies and claims-adjusting companies lied about the employment status of several thousand unlicensed out-of-state adjusters to bypass California’s strict licensing requirements, enabling them to mislead wildfire victims and to deprive them of their full insurance payments.

“Fire survivors like me have been victimized twice—first by the fires, and then by bad insurance adjusters,” says plaintiff Jeff Sengstack, who recently broke ground on the rebuilding of his Santa Rosa home.

“We need all the help we can get from the Department of Insurance, and when it comes to cracking down on unlicensed out-of-state adjusters, we’re not getting that help,” Sengstack said.

He noted that Judge Schulman’s order was clear on insurers’ responsibility. It states: “This is an allegation that these companies are engaged in fraudulently misrepresenting the status of people who are working for them, on a large scale.”

The 2017 and 2018 California wildfires were the most destructive in state history, burning 32,000 structures and killing 120 people.

The ruling allows Sengstack and Sonoma County attorney Jon Eisenberg, both represented by the San Francisco law firm Farella Braun + Martel, to go forward with their claim that former Insurance Commissioner Dave Jones broke the law last year by refusing to hold a statutorily-required hearing on the fraudulent scheme.

“It was shocking and dismaying that former Commissioner Jones would allow this massive insurance industry deception to happen,” says Eisenberg, who lost his home in the 1991 Oakland Fire and has been providing free legal assistance to victims of the 2017 and 2018 California wildfires. “I’m hopeful that new Insurance Commissioner Ricardo Lara will soon put a stop to it.”

The lawsuit will now go forward against Commissioner Lara, who took office on January 7 but has not yet initiated the statutorily-required hearing on the fraudulent scheme. The lawsuit seeks a court order requiring him to do so.

“All recent and future wildfire victims will benefit from this lawsuit,” says Neil Goteiner, the Farella partner representing plaintiffs. “Someone has to look out for them.”

Cheryl Loof
Farella Braun + Martel LLP
415.954.4433 / [email protected]

Neil Goteiner 
Farella Braun + Martel LLP
415.954.4485 / [email protected]

Jon Eisenberg
Law Office of Jon B. Eisenberg
707.395.0111/ [email protected]