A prolonged legal battle has culminated in a significant ruling as the California Court of Appeal upheld terminating sanctions against two plaintiffs for their repeated non-compliance with discovery orders. The complaint, initially filed by Wild Chang and Kenneth Lo, in the Los Angeles County Superior Court, was against Fire Insurance Exchange.
The case stems from an insurance claim submitted by Chang and Lo following a fire at their home in December 2014. The plaintiffs alleged that the insurance company handled their claim in bad faith. Initially filed in February 2017, the lawsuit named Farmers Insurance Company, Inc., Fire Insurance Exchange, Stacy Chern Insurance Agency, and agent Stacy Chern as defendants. In January 2021, Chang's son Wild Chang Jr. joined the lawsuit. The consolidated actions included allegations of fraud, breach of contract, breach of the covenant of good faith and fair dealing, unfair business practices, professional negligence, and emotional distress.
The plaintiffs claimed that after the fire incident, Farmers and Fire Insurance Exchange made a grossly deficient settlement offer of $19,925.91 for damages estimated to exceed $150,000. They also accused Farmers and its agents of engaging in a fraudulent scheme to convert their insurance into a self-owned membership in an unincorporated association to avoid legal liabilities. Further accusations included failure to provide temporary housing or adequate compensation as required by the policy and threats to terminate coverage when alternative insurance was unattainable.
In addition to these claims against Farmers and Fire Insurance Exchange, the plaintiffs also sued Woolls Peer Dollinger & Scher (Woolls Peer), alleging that the law firm engaged in fraudulent activities while representing other defendants in this litigation. However, Woolls Peer successfully filed a special motion to strike under Code of Civil Procedure section 425.16 (anti-SLAPP motion), which was affirmed on appeal.
Despite multiple court orders requiring compliance with discovery requests from May 2019 through March 2022—including responses to interrogatories and production of documents—Chang and Lo consistently failed to comply. The trial court imposed several monetary sanctions totaling thousands of dollars over this period but saw no compliance from the plaintiffs.
The turning point came when Fire Insurance Exchange and Chern moved for terminating sanctions due to continued non-compliance with discovery orders and failure to appear for depositions scheduled before trial dates. On November 14, 2022—the first day of trial—the court granted terminating sanctions against Chang and Lo for willful disobedience of court orders regarding discovery obligations.
Judge Teresa A. Beaudet presided over this case (Case ID: BC650876). The judgment was affirmed by Presiding Justice Martinez along with Justices Segal and Feuer concurring.