The Daily Journal
July 30, 2009

Insurers Ordered to Pay Long Beach for Housing Settlement

By Ciaran McEvoy

Two insurance companies have been ordered to pay Long Beach approximately $8 million in damages for refusing to pay after the city settled an early 1990s multi-million-dollar Federal Housing Act lawsuit.

The 9th Circuit U.S. Court of Appeals ruled on July 17 that the Insurance Company of the State of Pennsylvania and Lexington Insurance were obligated to pay $6.2 million in attorneys' fees accrued in the case. The court also upheld the late U.S. District Judge Edward Rafeedie's decision that the insurers were responsible for $1.8 million of the $20 million total. The appellate court's decision stems from a 1992 lawsuit where a mother and son sued Long Beach for allegedly obstructing their efforts to build boarding homes for Alzheimer's patients. The lawsuit was settled for $20 million.

"This is a significant victory for Long Beach," said Ricardo Echeverria, of Shernoff Bidart Darras Echeverria, who represented the Long Beach in its lawsuit against the insurers. "These insurers tried to walk away from their obligation to stand behind the City," he said. "I'm glad we made them keep their promise."