Mercury Insurance’s 20-year Legal Battle with California Settles for $41 Million

The largest property and casualty insurance penalty and interest payment in the California’s history has been levied and Mercury Insurance’s 20-year-long battle with California is now over. Under the terms, Mercury will pay the state more than $41 million. The decades-long legal dispute was over extra fees that Mercury charged to its customers.

The settlement came after the state Supreme Court last month declined to hear the company’s appeal from a lower court decision. The department said Mercury allowed its auto insurance agents to charge up to $150 in unapproved fees on top of state-approved premiums. The company collected more than $27 million in fees on more than 180,000 transactions from 1999 to 2004, the department said, though Mercury argued that the costs were legal broker fees.

A Orange County judge overturned the fine in 2016, but the state’s Fourth District Court of Appeal ruled that Mercury agents were not brokers and as a result could not charge the fees.

“Mercury’s illegal actions misled consumers and undercut competitors, which gave them an unfair advantage in the insurance marketplace,” the California Insurance Commission said in a statement.

Mercury said it “decided to settle this case so we can move forward” and that the settlement was in the best interests of its customers, employees and other stakeholders.

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More on the case:

https://www.marketwatch.com/story/mercury-insurance-ends-20-year-legal-battle-with-california-for-41-million-2019-10-02