AHP Investor’s Decade-Long Court Battle Pays Off

Published on December 5th, 2017 by Saeed Baeshen

Jim Demetre won his battle with Indiana Insurance

An AHP investor found himself in a David-and-Goliath-esque battle against his insurance company that is emblematic of the way big business preys on ordinary Americans.

Jim Demetre purchased coverage from Indiana Insurance, which is owned by Liberty Mutual Group, the fourth-largest property insurer in the United States. The policy covered a vacant lot which had once been a gas station.

“My father-in-law came out of the army and opened up his first gas station there,” Demetre shared. “Back in 1945 there weren’t any of the environmental regulations we have today.”

A consequence of this was that the underground petroleum tanks were prone to corroding and rusting, and the soil beneath the property was contaminated with gasoline. But this problem, which the Kentucky Department for Environmental Protection took very seriously, was rectified before Demetre took ownership.

The underground tanks were removed in 1998, and this process included digging up and replacing the contaminated dirt. “They took fifty truckloads of contaminated dirt out, and they put fifty truckloads of clean dirt back in,” Demetre said.

So Demetre had no reason to think when he took over the lot two years later that he would have anything to worry about. But in 2008, he received notice that the family living in a property next to the lot was claiming that they had suffered both medical and financial damages as a result of gasoline emissions from the lot.

What ensued was a three-way legal battle between Demetre, the Harris family next door, and Indiana Insurance, who did everything in their power to avoid paying, including suing Demetre himself. They alleged that he had known about gasoline contamination before insuring the property.

“The first meeting with the insurance company we had, I had an attorney with me. In fifteen minutes we became suspicious that they were trying to screw me,” Demetre recalled.

Demetre’s case was given to an agent named James Magi, who had a reputation within Indiana Insurance for being able to close these types of cases without paying a cent to the claimants. 72% of his cases ended up this way.

The Harris Family’s claim was settled in 2012, but by this point Demetre had already spent nearly $400,000 of his own money fighting Indiana Insurance. He had kept the legal woes from his ailing wife for several years, but she eventually found out. The situation was taking its toll on both of them, and Demetre was left with no other option but to fight on.

A jury awarded Demetre damages for emotional and mental distress due to Indiana Insurance’s actions. However, Indiana Insurance was not ready to give up, and they appealed the decision all the way up to the Kentucky Supreme Court.

“That’s what they do,” Demetre said. “They delay the case as long as possible in hopes you’ll give up.”

The Court ruled in August 2017 to uphold the jury’s verdict, reaffirming the decision against Indiana Insurance. “Based on the evidence, we conclude there was sufficient clear and satisfactory proof presented to sustain the jury’s award of emotional distress damages,” Chief Justice Lisabeth Tabor Hughes concluded.

Demetre admitted to being uneasy when his case was brought before the jury. “You don’t know what to expect from a jury,” Demetre said. But he believes that a jury trial ultimately worked in his favor, as his predicament resonated with the everyday Americans on the jury.

“My attorney made a statement that I think really spoke to them,” Demetre explained. “‘You cannot come to Campbell County, Kentucky, and do to Jim Demetre what this insurance company has done to him and get away with it.’” This call to solidarity for Main Street against big business did the trick.

“We sent a message to Boston [where Liberty Mutual is headquartered] that they cannot get away with this,” Demetre said proudly.

It’s not hard to see why jurors may have been eager to rule in favor of Demetre: the insurance industry is a prime example of big business exploiting the 99%. They pay their CEOs more than any other industry and often use underhanded tactics to avoid paying for claims.

Demetre’s attorney, Jeffrey Sanders, said that for his client the money was secondary. “It’s about standing up to large corporations that don’t follow the rules,” Sanders said.

The 77-year-old Demetre hadn’t been planning on retiring any time soon, but, he said, “I might consider it now!” He is also planning to celebrate with a trip to Chicago; he was one of American Homeowner Preservation’s earliest investors and is mulling over using some of his settlement money to invest again.

Demetre also reflected on how many other Americans may be suffering from this type of behavior by their insurance companies, especially after hurricanes Harvey, Irma, and Maria. “Can you imagine what people are going through in Texas, Louisiana, and Florida right now?” he asked. “The insurance companies aren’t going to pay them – they’re going to delay, delay, delay, just like they did with me.”

Demetre’s story is a reminder that sometimes the little guy can stand up to big business and win.

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