Business
California FAIR Plan continues denying smoke damage claims despite court loss and regulatory action

Despite a court loss and sanctioning by state regulators, California’s home insurer of last resort continues to deny smoke damage claims from the January wildfires — even when toxic substances have been found in homes, according to a Times review of denial letters.
The California FAIR Plan Assn. has rebuffed policyholders seeking to have their smoke-damaged homes remediated through professional cleaning or the replacement of structures and fixtures such as drywall, insulation and lighting, the half dozen letters and email exchanges sent during July and August show.
In denying the claims, the plan initially cited language deemed illegal by a Los Angeles County Superior Court judge in a landmark June decision that had required policyholders to show that their property suffered “permanent physical changes.”
Last month, the plan changed the wording and told policyholders with smoke damage claims that they must show “distinct, demonstrable and physical alteration” to their property — citing a 2024 state Supreme Court case that established that threshold in an insurance dispute over a COVID-related business closure.
Hilary McLean, a spokesperson for the FAIR Plan, said the insurer is no longer applying the language at issue in the June court decision and has been “updating all customer communications to ensure they consistently reflect the correct language.”
“Our goal is and continues to be to provide fair and reasonable coverage for wildfire-related losses while maintaining the financial integrity of the FAIR Plan for all policyholders,” she said in an emailed statement.
But attorney Dylan Schaffer, who represented the plaintiff in the June decision and shared the correspondence reviewed by The Times, said whatever the language cited by the plan, the result is denials that are unfair to policyholders.
“This stuff is going everywhere and it’s not dirt — it’s toxic,” he said, referring to smoke damage. “And you tell me that some 82-year-old is going to get up in the attic with a hazmat suit on, rip out the insulation and start vacuuming around?”
On Friday, Gov. Newsom called on the FAIR Plan to “expeditiously and fairly” process smoke damage claims arising out of the fires, saying the state has received hundreds of complaints from policyholders.
The January fires have been the worst catastrophe in decades to hit the FAIR Plan, which is operated and backed by the state’s licensed home insurers, including State Farm, Farmers and Mercury.
The plan estimates losses of $4 billion and it has assessed its member carriers $1 billion in order to pay claims.
In recent years, the plan took on hundreds of thousands of policyholders as insurers began pulling out of the state’s fire-plagued homeowners market. Enrollment in the Eaton and Palisades fire zones nearly doubled to 28,440 from 2020 to 2024, according to a Times analysis.
Schaffer believes the plan may have received more than 2,500 smoke damage claims given how many the plan reported it received for partial losses, indicating the structures were still standing.
McLean said the plan could not say how many smoke damage claims it has received due to the fires, nor the number rejected or paid.
The smoke damage policy has been controversial for years and sparked multiple lawsuits, but it wasn’t until June in a case brought by a Northern California homeowner that a judge found the policy violated state law.
That decision by Los Angeles County Superior Court Judge Stuart Rice found that the FAIR Plan’s requirement that smoke damage result in “permanent physical damage” violated the insurance code because it provides less coverage than what is required by the state’s Standard Form Fire Insurance Policy. The case is pending.
Consumer advocates had hoped the decision might prompt the plan to alter how it handled smoke damage claims, even though the ruling wasn’t issued by an appellate court. However, in several letters denying the claims, the plan said the decision had no bearing, noting in one letter “it is not controlling legal authority.”
“Trial court decisions have no precedential value in California; they bind the parties but not another court,” noted James Fischer, an insurance law expert and professor at Southwestern Law School in Los Angeles.
After the decision, the state Department of Insurance took legal action on July 31, threatening the FAIR Plan with a cease-and-desist order over the language. It also accused the insurer of failing to investigate claims fairly and denying legitimate claims without a reasonable basis.
The plan has denied wrongdoing and is seeking an administrative hearing to dispute the allegations.
In one smoke damage case, the plan acknowledged that it had received a report from a policyholder’s industrial hygienist that found a home in Pacific Palisades had been exposed to “toxic” levels of carcinogens, chemicals and particulates, according to a letter sent to the homeowner in August viewed by The Times.
The firm recommended the removal of drywall, plaster, wooden floors and other building materials, according to the letter. However, an expert hired by the plan concluded the home only needed to be cleaned and so the smoke claim was rejected.
“Under the terms of your dwelling property insurance policy, coverage for smoke damage is available only when there is a direct physical loss, which is defined in California law as a distinct, demonstrable and physical alteration of covered property,” the letter stated.
“If the hygienist recommendations call for cleaning, including cleaning of lead and/or asbestos, and there is no direct physical loss to the property, there is no coverage,” it went on to say.
The plan did offer to reinspect the home if cleaning was not successful in removing the contaminants.
Schaffer said he expects that the new language will become a point of contention in the dozens of lawsuits that he and other attorneys have filed on behalf of fire victims against the FAIR Plan.
In March, California Insurance Commissioner Ricardo Lara issued a bulletin advising insurers that the Supreme Court decision does not state “smoke damage is never covered as a matter of law.” A department spokesman declined to comment further, citing the litigation with the plan.
Altadena homeowner Maral Donoyan, 59, who spoke to The Times in April about her difficulties in dealing with the plan, said she and her husband were only able to move back into their smoke-damaged home in June after taking out a Small Business Administration loan.
The plan denied the couple’s smoke damage claim, even though their garage partially burned, she said. That forced the couple to spend close to $200,000 of their own money on remediation, with the bedroom above the garage still needing work, said Donoyan, who is a plaintiff in another lawsuit against the plan.
“Toxic, traumatic, bad faith, immoral,” is how she describes her interactions with the plan.

Business
How a Macy's parking structure became L.A.’s latest luxury apartment complex

An unlikely corner of one of L.A.’s once-famous/now-dead malls is open for business again this week as residents move into luxury apartments on the spot that used to be a Macy’s parking lot.
The Westside Pavilion was one of the city’s premier shopping venues and a cultural touchstone for generations of Angelenos, appearing in movies, television shows and music videos.
1992 photo of interior of Westside Pavilion that was designed like a Paris arcade.
(Randy Leffingwell)
Built on the site of California’s first drive-in movie theater, the center played prominent roles in the 1995 film “Clueless” and the video for musician Tom Petty’s 1989 hit “Free Fallin’.”
But like many other indoor malls, the Westside Pavilion fell out of favor in the 21st century before closing in 2019 to be converted to offices for rent.
Now the former mall also has housing, which is even more in demand than offices these days. New residents will be allowed to start moving in this week.
On a spot once occupied by what the developer called an “absolutely horrible, obsolete” parking structure, there are now 201 luxury apartments — a six-story complex that includes townhouses with front doors that open onto a residential street.
“You have your own stoop,” developer Lee Wagman said of the townhouses. “It’s kind of like a brownstone.”

Developer Lee Wagman of GPI Companies in the rooftop lounge area at the Overland & Ayres apartments.
(Juliana Yamada / Los Angeles Times)
Wagman is managing partner of GPI Cos., the Los Angeles real estate company that built the Overland & Ayres apartments and converted the mall’s former Macy’s building into the West End office complex. The combined cost of both builds was $350 million.
Wagman said the company got the temporary certificate of occupancy for the apartment complex just last week and move-ins can start as early as this week.
The rest of the former mall was in the process of being converted to offices for rent to Google when it was purchased last year by UCLA. The university is turning the old shopping center into a nearly 700,000-square-foot research center that will focus on immunology, quantum science and engineering.
The biomedical research center, which is set to open as early as next year, will be trying to tackle towering challenges such as curing cancer and preventing global pandemics.

The pool area at Overland & Ayres.
(Juliana Yamada / Los Angeles Times)
The new apartments will be convenient for people working at the research center or other nearby job centers, such as UCLA in Westwood, Century City or Culver City.
As has grown more common for buildings competing at at the top of the apartment market, Overland & Ayres has amenities such as a gym with a resort-style pool deck and spa, an outdoor lawn for working out, a sauna and a cold plunge tub.
It has a large rooftop space with both indoor and outdoor lounging, dining areas and gas grills. There is a game room and two event kitchens. The building also includes an outdoor dog park and a spa for pets.

The dog park at the Overland & Ayres Aapartments.
(Juliana Yamada / Los Angeles Times)
Services available to tenants for a fee include personal training and private yoga instruction, dry cleaning pickup and delivery, car washing, dog walking, grocery delivery and housekeeping. Plans also call for commercial tenants along Overland Avenue that would serve the building, such as a restaurant or Pilates studio.
Rents range from $3,800 per month for a studio apartment to $8,500 per month for a townhouse.
The mall makeover is part of a decades-long trend of repurposing dead shopping centers, devastated by the pivot to online shopping.
Once the kings of retail, indoor shopping centers fell out of favor and lost customers to e-commerce, as well as outdoor “lifestyle” centers — places such as the Grove and Westfield Century City, which feature fancy restaurants, entertainment and pleasant spaces to hang out, even if you’re not buying anything.

The kitchen and living room area of a two-bedroom den unit at the Overland & Ayres apartments.
(Juliana Yamada / Los Angeles Times)
The Sherman Oaks Galleria, a legendary indoor mall used in the filming of “Fast Times at Ridgemont High” and “Valley Girl,” is now mostly offices.
Lakewood Center, one of the largest enclosed malls in Los Angeles County, spanning 2 million square feet, has been sold to developers who plan to transform it by adding housing, green spaces and entertainment venues.
“A lot of malls now are going towards mixed use,” said Wagaman, who helped turn an indoor mall in Pasadena into an outdoor mall with apartments more than two decades ago.
It is not just old mall space. Struggling office buildings are also looking at transitioning to residences.
With downtown L.A.’s office rental market struggling with high vacancies and falling values, stakeholders are lobbying for city support to convert high-rises to housing. The hope is that this could help address the city’s persistent housing shortage.
Among the suggested targets for conversion are elite Financial District towers that commanded top rents before the COVID-19 pandemic’s stay-at-home orders shut down offices, leaving many buildings more than one-third vacant.
Business
Trump moves to cut more than 500 Voice of America employees despite court ruling
The Trump administration has moved to lay off more than 500 employees who work for the federally funded network Voice of America, which provides global reporting in places with restricted press freedom.
In March, Trump officials first attempted to close down some of the organization’s newsrooms. But Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia called for the network’s restoration last April, citing a law that requires the Voice of America broadcast to be continued.
Despite the ruling, Kari Lake, the acting chief executive of Voice of America’s oversight agency, posted on social media on Friday evening that 532 government positions were eliminated.
Before the downsizing, Voice of America was responsible for broadcasting news in 49 languages to 360 million people every week, including in Russia and China. Now, the network airs programming in four languages: Persian, Mandarin, Dari and Pashto.
The layoffs “will likely improve [the agency’s] ability to function and provide the truth to people across the world who live under murderous Communist governments and other tyrannical regimes,” wrote Lake on X.
Most of the 1,300 Voice of America journalists had already been fired or remained on paid leave prior to these layoffs. Only 100 journalists and other staff members remain employed by the organization.
After being asked by the remaining employees to ensure the administration was in line with his April ruling, Lamberth found that they appeared to be noncompliant.
Earlier this week, he ordered Lake to provide sworn testimony at a deposition and threatened to hold her in contempt for going against court orders. He also blocked the administration from firing Voice of America director, Michael Abramowitz, the day before these layoffs were announced.
Business
Consulate of India signs lease in downtown Los Angeles

The Consulate General of India is carving out new space in Los Angeles with a lease for a full floor in a downtown skyscraper.
The Indian consulate is moving into the AON Center at 707 Wilshire Boulevard, once the tallest building in downtown. The 10-year lease covers 20,507 square feet and is a bright spot amid high office vacancy rates in the area.
The space will be the consulate’s second office in California. A consulate has been operating in San Francisco since the 1950s.
The move signals expanded cooperation between Los Angeles and India as Southern California prepares to host global events, including the 2028 Olympics and parts of the 2026 FIFA World Cup.
The chance for a stronger relationship between the two communities also comes as Indian business owners in Los Angeles brace for higher prices on imported goods. President Trump signed an executive order last month to impose a steep 25% tax on shipments from India.
“Los Angeles is the most important U.S. city in the western hemisphere,” said Gunjan Bagla, chief executive of the U.S. and India consultancy firm Amritt. “Having a local diplomatic presence here is crucial, and up until now, we have not had that.”
More than half a million Indian Americans reside in Southern California, and Los Angeles relies on Indian tourists and those seeking education in the U.S. to bolster its economy, Bagla said. With cricket—a hugely popular sport in India—coming to the Olympics, tourism from the country is expected to skyrocket, he said.
California is the only state to host two Indian consulates, according to Bagla. The Los Angeles consulate will also serve Arizona, New Mexico and Nevada.
The move into the AON Center comes as downsizing and tenant move-outs in downtown have sent the office vacancy rate to a record high of 22%, according to commercial real estate company Costar. The consulate chose downtown for its proximity to constituents and Los Angeles City Hall, and because the State Bank of India has a branch in the same building.
“Securing a home at AON Center not only provides a world-class office environment but also places the consulate at the heart of the city, making its essential services more accessible to the Indian-American community across Southern California,” said NAI Capital Executive Vice President Tina LaMonica, who represented the consulate in the transaction.
The AON Center opened in 1974 and underwent renovations after a fire in 1988. The building has lost some of its prestige since its prime, but remains a presence in the downtown skyline.
Bagla said the prominent location will heighten the impact for business leaders across industries.
“American business leaders in entertainment, aerospace, electric vehicles, telecommunications and biotech will now have direct access to Indian diplomats for trade, investment, and cultural connections,” he said.
The newly leased office space will be ready for occupancy in November. The Indian consulate will join a handful of other foreign missions downtown, including the Consulate General of the Arab Republic of Egypt and the Consulate General of the Republic of Indonesia.
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