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L.A. jury learns how Austin works
Saturday, 19 November 2005
L.A. jury learns how Austin works
NOBODY is saying state Rep. Joe Nixon improperly pressured Farmers Insurance Group two years ago to pay him more than he had coming in a settlement over severe mold damage to his home... After a two-week trial, the jury determined that the insurance giant had wrongfully terminated Isabelle Arnold, national mold manager, for objecting to paying Nixon more than he had coming to him...Nixon was a friend to all insurance companies. He was a leader in "tort reform" legislation designed to lower jury awards.
Houston Chronicle
L.A. jury learns how Austin works


By RICK CASEY
Copyright 2005 Houston Chronicle


NOBODY is saying state Rep. Joe Nixon improperly pressured Farmers Insurance Group two years ago to pay him more than he had coming in a settlement over severe mold damage to his home.

But then he did, apparently, receive at least $13,000 in insurance claims for mold in his house that other Farmers premium payers would not have received.

So it's OK if he has to explain once again how politics works in Austin as he block-walks for his state Senate campaign.

Travis County District Attorney Ronnie Earle had his public integrity unit look into the matter and found no wrongdoing by Nixon, a Republican.

But a jury in Los Angeles this week did find wrongdoing by Farmers.

'Smoking gun' document

After a two-week trial, the jury determined that the insurance giant had wrongfully terminated Isabelle Arnold, national mold manager, for objecting to paying Nixon more than he had coming to him.

Arnold's attorney, Stephen C. Ball, said the jury didn't believe Farmers' contention that it fired Arnold for retaliating against a subordinate. The key piece of evidence: An extraordinary e-mail exchange between Arnold and a Farmers executive that was made public by my colleague Clay Robison.

"Rarely do you have a document like this, a smoking gun," Ball said.

'A friend of Farmers'

In her e-mail, Arnold wrote to Jim Daues, vice president for property claims, asking why he had approved payments for damage to Nixon's home that was not covered by his policy.

"This is not your style to overwrite a decision by claims, especially under these circumstances," she wrote. "Was this decision made by someone else above you?"

Daues responded: "John Hageman, Mark Toohey and Kevin Kelso all called me about this claim and wanted Mr. Nixon to be a friend of Farmers in the legislative session. Each one strongly suggested that an additional payment would be very helpful to the cause."

Hageman was Farmers' Texas chief, Toohey an Austin lobbyist for the company and Kelso, division president.

Actually, Nixon was a friend to all insurance companies. He was a leader in "tort reform" legislation designed to lower jury awards.

The California jury awarded Arnold $260,000 in lost wages and $10,000 in other damages. That was far less than the $100 million Arnold sought.

A spokeswoman for Farmers says the company hasn't decided whether to appeal.

Ironically, at the time this controversy broke, Nixon, who is a lawyer, was representing another insurance company that was fighting a severe mold claim by Oak Ridge Baptist Church, near Spring.

That insurance company, Utica Lloyd's of Texas, didn't get off as lightly as Farmers.

"We tried the case and got about a $5.2 million judgment, and they paid us," said Fred Hagans, attorney for the church.

At the time, Hagans suggested that Nixon was brought into the legal team simply for his power to obtain a "legislative continuance." Because the Legislature was in session, the trial was delayed.

Nixon insists that was not the reason he joined other lawyers from his firm on the case, and he says he was not paid "extra" for the continuance.

"I actively participated in the trial," he said.

Hagans admits Nixon conducted a few examinations and cross-examinations but not nearly as many as his colleagues in the five-week trial.

"One was me, on my attorney's fees," said Hagans. Based on testimony by the winning lawyers, and sometimes by experts, the jury decides how much the losing defendant must pay the lawyers for the other side.

"His examination was so withering that the jury awarded us every penny we asked for," said Hagans.

You can write to Rick Casey at P.O. Box 4260, Houston, TX 77210, or e-mail him at rick.casey@c.hron.com

 
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