Facts

In 2000, plaintiff Isabelle Arnold was the national mold manager for defendant Farmers Insurance Exchange, with responsibility for reviewing, processing, and approving claims. In early 2003, she discovered that a claim submitted by Joe Nixon initially had been denied, but then approved by Jim Daues, a vice-president for property claims. A supplemental payment of $13,000 also was tendered for damage done to NixonÆs driveway by a contractor during the remediation. Nixon was a member of the Texas House of Representatives known to be a strong supporter of tort reform legislation. Arnold believed she should have been involved in the processing of the claim and questioned whether NixonÆs damages were covered by his policy. She emailed Daues on April 30, 2003 asking him why he had overridden the initial decision to reject the claim. Daues responded on May 4, 2003 that he been contacted by John Hagerman, FarmersÆ Texas Chief, Kevin Kelso, a Farmers division president, and Mark Toohey, an Austin lobbyist. They expressed a desire that Nixon be a friend of Farmers in the legislative session and each stated that an additional payment would further this cause. In June 2003, Arnold was terminated. She was told that the action was taken in response to her alleged retaliation toward another employee, William Wallace, who had complained about her management of the mold department. Arnold filed suit against Farmers, its general counsel, and Wallace. She alleged several causes of action including wrongful termination, retaliation, defamation, and invasion of privacy. The latter two were dismissed by summary adjudication.

PLAINTIFF'S CONTENTIONS:
Arnold claimed that she was fired in retaliation for her objection to the approval of NixonÆs claim and that this was in violation of public policy because the claim was approved for the purpose of currying political favor. She further claimed her termination improperly was motivated by complaints she made about both FarmersÆ failure to set adequate reserves in violation of state law and its improper response to court-ordered discovery in a Texas lawsuit. Specifically, Arnold believed that the court order precluded removal of certain files from the building. At trial, Arnold additionally contended that she had not yet been able to find a full-time replacement position.

DEFENDANTSÆ CONTENTIONS:
Farmers denied any wronging. It contended that the payment of NixonÆs initial claim was legitimate as was the additional supplemental payment of $13,000. Farmers also claimed that although Arnold did raise a question about the reserves in a meeting in 2001, her question was answered and there was no evidence that any lack of reserves caused any underfunding or denial of claims. Farmers further contended ArnoldÆs concerns about removal of the discovery documents was unfounded. Farmers claimed both that the order did not preclude removal and that Farmers addressed ArnoldÆs concerns the same day they were made by photocopying the files in question instead of removing them from the building. Farmers maintained that Arnold had been terminated as a result of her alleged retaliation against Wallace. Farmers argued that Arnold could have mitigated her loss-of-earning damages by finding a new job. Farmers further contended that these damages should be reduced based upon the after-acquired evidence doctrine. This argument was based upon FarmersÆ allegation that ArnoldÆs resume contained false information and that Farmers would have terminated Arnold for this had it been discovered while she still was employed.

Settlement Discussions

Unknown.

Damages

Arnold sought $317,642 for past lost wages, $1,967,000 for future lose wages, about $1 million in emotional distress damages, and unspecified punitive damages.

Result

The jury found in ArnoldÆs favor and awarded her $260,000, comprised of $250,000 for lost wages and $10,000 for emotional distress.

Deliberation

two days

Length

two weeks