Kermith Sonnier and William Kirchhoff stood up for what was right and were terminated for their efforts, but thanks to their respective attorneys they did not go home empty-handed.
By Deborah Rosenthal
The public's interest in seeing its laws followed is vigorously guarded, in part by the common law tort of wrongful termination. This violation of public policy has expanded through case law to protect a wide array of workers who resist employer misconduct. In addition, in today's more transient work population, unwavering loyalty to one's boss may have lost some of the imperative nature it had in the Old Economy.
Kermith Sonnier v. Farmers Insurance Group of Companies
Plaintiff Kermith Sonnier worked as a commercial claims adjuster for Farmers Insurance from 1994 to 1997. His job included evaluating the largest losses sustained by apartment buildings and condominium associations in the Northridge earthquake of 1994.
Sonnier alleged that beginning in 1996, Farmers began to pressure him to groundlessly lower his loss estimates. He refused, and Farmers terminated him, despite a clean work record, on the purported grounds that it was reducing its work force.
Through his attorneys, Stephen C. Ball and Derrick Fisher, Sonnier brought an action against Farmers for wrongful termination in violation of public policy. Sonnier's counsel state that their biggest challenge was not proving Farmers' impropriety but establishing the existence of an employer-employee relationship between Farmers and Sonnier. According to Ball, when Sonnier began as an adjuster for Farmers, his services were provided through a firm that contracts out adjusters. Following catastrophes where there are multiple claims, says Ball, insurers often have to retain additional adjusters. The general custom of the insurance companies is to employ the adjusters as independent contractors, thereby limiting the companies' liability.
In the Sonnier case, Ball and Fisher argued that despite Sonnier's official title, he and other adjusters who work on special assignments are "really are coming in as special employees," says Ball.
"Insurance companies would like to maintain this fiction [that] these people are independent contractors so that when they're sued, they can always say, 'It's not us. They're not our employees,'" Ball says.
However, as Ball argued in the trial, the amount of control that Farmers exerted over the everyday adjusting activities of these workers belied the title of independent contractor.
As an added challenge, Fisher reports that for the purposes of the summary judgment motion, Farmers conceded that Sonnier was an employee. Furthermore, Fisher says that until the first day of trial, Farmers verbally agreed that it would sign a written stipulation to that effect so that no evidence would need to be presented at trial with regard to that issue. Then, on the first day of trial, Farmers recanted, so Ball and Fisher were forced to present evidence to show that Sonnier was in fact a "special employee" of Farmers. Both Ball and Fisher were quick to point out that Farmers' eleventh-hour change in position appeared to them to be Farmers' corporate decision, as opposed to a tactic by Farmers' counsel, David G. Freedman, whom Ball and Fisher describe as a "terrific lawyer."
The issue of whether Sonnier was an independent contractor or a special employee was "huge," says Ball. "The jury was out a week on that issue alone."
Nevertheless, when the jury returned, they found 9-3 that Sonnier was, by law, a special employee of Farmers. The jury also found that Sonnier was terminated in violation of public policy, and awarded Sonnier $1.46 million in compensatory damages and $9 million in punitive damages.
Ball credits his victory in large part to the plaintiff's credibility. Sonnier, says Ball, had "a phenomenal memory," while Farmers witnesses "got on the stand and had absolute amnesia, so a lot of what he said absolutely went unrefuted."
In addition, Sonnier had an impeccable work history and construction expertise for which Farmers had repeatedly hired him to work on very large, important projects. The plaintiff's documentary evidence included copies of many of the files Sonnier had adjusted, as well as numerous letters from insureds to Farmers praising Sonnier.
"The insureds really liked this guy," says Ball. "We had a lot of letters of recommendation that basically said, 'Gee, Farmers, Mr. Sonnier is the reason we're going to insure with you.'"
At trial, Ball and Fisher argued that it was precisely this trust that Farmers attempted to exploit.
"They gave him the hardest projects because he was so credible with their insureds," Ball says.
"He truly tried to be what adjusters should be - the guy in the middle, going back to the insurance company and saying, 'Here's what it's going to take to fix it' - and Farmers wanted him to be their organ and use the trust people had in him against them," Ball says.
In post-trial discussions with the jurors, Ball found that, like the insureds, the jury (eight women and four men, mostly Hispanic, including an engineer, a lawyer, a retired banker, a postal supervisor, a writer and a union foreperson) respected and trusted Sonnier.
"The jury had a sense that termination is a big deal when you've worked your whole life," says Ball. "I think they felt for the guy that tried to do the right thing and was fired for that."
Furthermore, jurors reported that if they could have made an award for the way Farmers treated its insureds, they would have given more than $100 million.
Defense counsel David G. Freedman, of the Los Angeles office of Crosby, Heafy, Roach & May, declined to comment on the outcome of the matter other than to say that the defendant has filed motions for a new trial and judgment notwithstanding the verdict on a number of grounds, including insufficiency of the evidence and excessive damages. The motions are scheduled to be heard Thursday.