CA Court of Appeal: Prop 17 Backer Mercury Insurance “Intentionally Dishonest,” Behavior Was “Despicable” In Handling of Small Business Insurance Claim

Published on

Advocates Say “Intentionally Dishonest” Is Par for
the Course for Prop 17 Sponsor Mercury

(Cross-posted from, sponsored by Campaign for Consumer Rights.)

Santa Monica, CA – Mercury Insurance’s treatment of
its policyholder Amerigraphics, a printing and graphics business in of
Sherman Oaks, California, was “despicable” according to a Court of
Appeal ruling issued earlier this week.  Mercury Insurance is the
sponsor and 99% funder of Proposition 17 on the June ballot, which would
give auto insurance companies a new way to raise premiums on California

The Court’s strong language came in the case Amerigraphics, Inc.
v. Mercury Casualty Co.
(Case #B208654).  Mercury had appealed the
case after being found to have engaged in bad faith with “malice, fraud
or oppression” for refusing to pay a reasonable claim in a timely manner
after its policyholder’s business was flooded.

“Mercury tries to spin the facts,” the Court explained in its
decision.  But, the court also wrote, “the evidence showed that Mercury
was intentionally dishonest and showed a conscious disregard of
Amerigraphics’s rights.”

“Voters shouldn’t trust a ballot initiative fully funded by a company
that judges called ‘dishonest’ and ‘despicable’ in its treatment of
policyholders,”  said Doug Heller with Stop Prop 17.  “Mercury’s
multi-million dollar campaign to sell Prop 17 and the auto insurance
surcharges it would allow is just as dishonest as Mercury’s treatment of
its customers.”

The Court upheld the ruling in favor of Amerigraphics, though it
reduced the jury-awarded punitive damages Mercury had to pay, from $1.7
million to $500,000, in order to comply with Court-mandated limits on
damage awards.  The decision can be downloaded at:

Earlier this year, the California Department of Insurance released
documents exposing more than a decade of bad behavior by Mercury.  In
the reports, the Department found that Mercury had written and unwritten
rules to surcharge or deny policies to members of the military,
self-employed customers, the unemployed and unmarried people living
together.  Describing Mercury’s behavior in a 2009 legal action against
the company, government regulators wrote: “Mercury has a deserved
reputation for abusing its customers and intentionally violating the law
with arrogance and indifference.”

Prop 17: Another Way to Abuse California Insurance Customers

Prop 17 would create an insurance surcharge on drivers,
including soldiers and seniors, who have had a lapse in car insurance
coverage for virtually any reason during the past five years, or who
missed a single payment.  Under the measure, people who stopped driving
and didn’t need insurance for a time would be required to pay up to a
thousand dollars more for car insurance when they sought to restart
coverage.  Currently, insurance companies are prohibited from imposing
such a surcharge in California.

The initiative is opposed by consumer and citizen groups including
Consumers Union, Consumer Watchdog, Consumer Federation of California,
California Alliance of Retired Americans and

– 30 –

For more information, please visit:
or find us on twitter at:
– and facebook at:

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Latest Videos

Latest Articles

In The News

Latest Report

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More articles