A Video Explaining How a Bad Faith Suit Created a Flood of Mold Claims and Suits

The Ballard Allison Case

See the full video at https://youtu.be/p5uTc4ynvyk

The fear of mold claims was engendered in the insurance industry by the trial court decision in Ballard v. Fire Insurance Exchange, No. 99-05232 (Texas District Court, Travis County, June 1, 2001), cited in Jury Awards: $32 Million to Texas Homeowner in Mold Coverage Action, 6, No. 12, Mealey’s Emerging Insurance Disputes 11 (June 20, 2001 and “What Coverage Attorneys Need to Know About Mold,” Tort and Insurance Practice Law Journal, Fall 2002 (38:1), at page 45). The fear was mostly misplaced.

The verdict was the result of poor claims handling. Almost the entire $32 million verdict was punitive damages that did not withstand appellate review.The Texas Court of Appeals, Third District, at Austin, reversed much of the trial court’s opinion in Ronald Allison/Fire Insurance Exchange v. Fire Insurance Exchange, A Member of the Farmers Insurance Group/Mary Melinda Ballard and Ronald Allison, et. al, 98 S.W.3d 227 (2002), and explained the factual background that resulted in an improper and excessive judgment against the Fire Insurance Exchange (FIE). The Court of Appeals describe the evidence presented at trial in detail necessary to the understanding of the decision.

Although the Ballard Allison trial verdict was touted as a “mold” case, it was, in fact, a claims-handling case. The jury was offended by the admission that the adjuster, McConnell, lied to the insured and decided to punish them with excessive punitive damages.


© 2020 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant  specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at http://www.zalma.com and zalma@zalma.com.

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 52 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

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