Career
He is one of the pioneers of a branch of law known as "insurance bad faith", in which he investigates the alleged bad faith and misconduct of insurance companies. This began in 1971 with his first insurance case. He has served for many years on the Board of Directors of the national insurance consumer organization, United Policyholders.
Also in 1979, he persuaded the California Supreme Court to establish new case law that permits plaintiffs to sue insurance companies for bad faith seeking both compensatory and punitive damages when they unreasonably handle a policyholder’s claim (Egan v Mutual of Omaha).
His most successful case was in the early 1990s related to Cyclone Val, a tropical cyclone that devastated American Samoa in December 1991. In 1991, American Samoa had purchased a $45-million "all risk" insurance policy from the firm Affiliated FM Insurance.
However, the firm would only pay up $6.1 million for the damages, arguing that the insurance did not cover water damage, only that driven by the wind. Shernoff investigated and discovered that the insurance company had altered American Samoa"s insurance policy to exclude damages caused by "wind-driven water", despite it still covering hurricanes.
The case was taken to court and in 1995 the jury awarded the American Samoa Government $28.9 million, and then added twice that amount ($578 million) for punitive damages.
The total award in the final judgment was $86.7 million, which is stated to be the largest insurance bad faith judgment in the state of California, in 1995. Shernoff is highly acclaimed in the legal profession in the United States and has ranked on the The Best Lawyers in America, every year since its first edition in 1983. In 2004, he was named "Super Lawyer" by Law & Politics and Los Angeles magazine and was named as one of the 100 Most Influential Attorneys in California.
