Lawsuit Filed Against State Farm and Environmental Consultant for Bad Faith Smoke Damage Practice
Lawsuit cites new California Department of Insurance market conduct report finding State Farm's claims handling unlawful
Los Angeles, CA – A lawsuit has been filed on behalf of plaintiffs Shawn Johnson and Eileen Johnson against State Farm General Insurance Company and EFI Global, Inc. The suit alleges that State Farm, in partnership with EFI Global, systematically mishandled the Johnsons' smoke and ash damage claim following the devastating Eaton Fire of January 2025, and that State Farm's conduct is part of a widespread, unlawful pattern of claims mishandling that has harmed thousands of California policyholders.
The complaint, filed in the United States District Court for the Central District of California, is believed to be the first lawsuit arising from the January 2025 Los Angeles wildfires to incorporate the California Department of Insurance's Market Conduct Examination findings issued on May 4, 2026. That report, which followed a formal investigation launched in June 2025, documented 398 alleged violations of California insurance law across a sample of just 220 wildfire claims finding that State Farm engaged in a pattern of slow and inadequate claim investigation, underpayment, repeated and disruptive adjuster reassignments, and failure to communicate adequately with policyholders.
The Johnsons, residents of Altadena, California, own a home that survived the Eaton Fire but sustained severe smoke, ash, and toxic contamination infiltration. A comprehensive environmental assessment conducted by certified industrial hygienist Dawn Bolstad-Johnson of Kaizen Safety Solutions concluded that the property requires full remediation, potentially including a complete tear-down, due to the presence of cyanide, lithium, lead, chromium, and numerous other carcinogens and contaminants.
Rather than honoring the Kaizen Report's findings, State Farm engaged EFI Global to conduct a second inspection of significantly limited scope. EFI Global's personnel, who are not certified industrial hygienists, conducted arbitrary sampling without a defined scientific protocol and failed to perform the roof, electrical, crawl-space, or CAM-17 metals testing that State Farm itself had cited as necessary. State Farm then used EFI Global's deficient reports to manufacture doubt about the Kaizen Report's conclusions and deny the Johnsons the full coverage to which they are entitled.
During the course of the claim, the Johnsons were assigned at least eight different State Farm adjusters, were repeatedly denied approval for stable long-term housing, and were forced to take out an SBA loan to fund remediation after State Farm refused to make a timely coverage determination.
"State Farm delayed, denied, and manipulated our clients at every turn, even after its own adjuster called the Kaizen Report 'a really good report' that would support full coverage, while EFI Global conducted sham testing without scientific rigor or protocol to give State Farm the pretext it needed to deny coverage," said Michelle Meyers, Partner at Singleton Schreiber and lead attorney for the Johnsons. "The California Department of Insurance has confirmed what our clients experienced firsthand. State Farm has engaged in systemic, unlawful claims mishandling that left a family with two young children displaced, financially devastated, and living with unresolved toxic contamination in their home. This is not an isolated case, and we are committed to stopping it."
The complaint asserts causes of action for insurance bad faith, breach of contract, breach of contract under the third-party beneficiary doctrine, negligence, and violations of California's Unfair Competition Law (Cal. Bus. & Prof. Code § 17200, et seq.). Plaintiffs seek general and special damages, punitive and exemplary damages, injunctive relief, restitution, and attorneys' fees.
About Singleton Schreiber
Singleton Schreiber is a client-centered law firm, focusing on mass torts/multi-district litigation, fire litigation, personal injury/wrongful death, civil rights, environmental law, insurance bad faith, tribal law, and sex abuse/trafficking. Home to the nation’s largest fire litigation practice, the firm has represented over 30,000 wildfire and explosion victims caused by utilities, government negligence, railroads, and corporate misconduct. Its nationally recognized team has played a leading role in high-profile cases including the 2025 Eaton Fire, 2025 Moss Landing Battery Fire, 2025 Esparto Fireworks Explosion, 2023 Maui Fires, and is also actively litigating wildfire cases throughout New Mexico, Colorado, Texas, Oregon, and Washington. They are also pursuing groundbreaking litigation against Tesla for misrepresenting their autopilot system, which recently resulted in a historic verdict. Additionally, the firm advocates for survivors of abuse involving hotel chains in California and Washington. With deep experience in complex claims, the firm is committed to helping individuals, families, and communities recover and rebuild.
