Ayati-Ghaffari v. Farmers Insurance Exchange
Dallas Court of Appeals, No. 05-17-00864-CV (December 11, 2018)
Justices Myers, Evans, and Brown (Opinion linked here)
Citing alleged misrepresentations of material facts the policyholder (Ayati), Farmers Insurance denied a claim under a homeowner’s policy for $600,000 worth of property (including “bricks or bundles of Zimbabwean currency, a 103” TV, an antique King-size bed, and several Persian rugs”) reported stolen from a second-story condominium. Ayati sued Farmers, and the discovery battles began. Farmers repeatedly complained to the court of Ayati’s incomplete answers to written discovery, as well as evasive or untruthful deposition testimony.
The trial court held five discovery hearings in 14 months, and repeatedly ordered Ayati to produce requested documents and information related to his financial condition; claims, litigation, and criminal history; acquisition of the allegedly stolen currency and other property; eBay transactions; and other matters. (During this period, Ayati was represented by a series of at least three attorneys; the first two withdrew because of “irreconcilable differences” or lack of communication.) Finally, after finding Ayati had not complied with its previous orders and had provided testimony that “strains credibility,” the trial court struck Ayati’s pleadings, dismissed his claims with prejudice, and ordered him to pay court costs.
The Dallas Court of Appeals reviewed the record, including the trial court’s 13-page order detailing the chronology and explaining its conclusion that less stringent sanctions would be insufficient. Applying the standards articulated in its own opinions and by the Supreme Court of Texas, the Court held the trial court had not abused its discretion. In short, the Court determined the sanction “had a direct relationship to Ayati’s conduct and was not excessive.”