Calif. Appeals Court Dismisses Claims of Former State Farm Agents

A California appellate court in San Francisco dismissed the claims of two former State Farm insurance agents in a lawsuit filed against the giant insurer over wrongful termination. The court also ordered a new trial in the case, and reversed a previous ruling by a Mendocino County judge.

Richard Pyorre of Fort Bragg, Calif. and John Wier of Crescent City, Calif., were awarded a combined $12.6 million in damages resulting from a seven week trial against State Farm Automobile Insurance Company in Aug. 2002 (See IJ West, Sept. 2, 2002). Months later, Mendocino County Superior Court Judge Richard Henderson overturned the jury’s award, stating jurors may have been confused by the meaning of some of the terms in the case (See IJ West, March 10, 2003).

The case unfolded when, back in February of 1999, Pyorre was terminated by State Farm for allegedly not attending a mandatory ethics training class, and Wier terminated over a dispute with a computer agreement. State Farm later sued the two agents for allegedly disclosing trade secrets and breach of contract.

The two countersued for wrongful termination and interference and were awarded the $12.6 million in emotional and punitive damages. The jury found that Pyorre and Wier were not guilty of State Farm’s allegations, including disclosure of trade secrets and breach of contract, and that State Farm interfered with Pyorre and Wier’s contracts with Mercury Automobile Insurance.

A three judge panel from the California Appeals Court ordered a nonsuit on Pyorre and Wier’s claims on Dec. 27, 2004, and granted State Farm’s motion for a new trial. They also reversed the trial court’s order denying a Judgment Notwithstanding of the Verdict (JNOV) for State Farm, essentially reversing the jury’s decision in favor of State Farm.

“It’s utterly ridiculous,” Pyorre said. “[The appeals court] said it was crystal clear that State Farm owned the trade secrets, and they quoted that part of the contract. But when they quoted it, right in the middle they left out 20 words, which said: ‘except information and records of policyholders insured by the Companies pursuant to any governmental or insurance industry plan of facility …’ That was a big basis of our case–that’s the reason that the jury found in favor for us; they said I had a right to use that information.”

Pyorre said he pointed this out to the panel, but was ignored. He requested another hearing and was denied.

Pyorre also alleged that State Farm is guilty of committing perjury to the IRS by claiming that Pyorre and other agents operated as independent contractors (thereby rendering Pyorre’s termination for not attending a mandatory training unlawful.)

Pyorre said he plans to appeal to the California Supreme Court.

State Farm representatives were not available for comment.

Topics California Agencies Claims