Widow of Salon Meritage Owner Sues Insurance Co. Over Their Handling of Shooting Rampage

Sandi Fannin claims the salon's insurer "treated the worst moment in my life like it was just a small problem."

The widow of the owner of a Seal Beach beauty salon where eight people were killed last year in the worst mass killing in Orange County history filed a lawsuit on Tuesday alleging that her insurance company did not fully pay off on a policy for work interruption.

Sandi Fannin, who recently sold the business to another hairstylist friend, sued Employers Mutual Casualty Co. in Orange County Superior Court.

“All I wanted was for this company to do what my husband, Randy, and I paid them to do,” Fannin said. “Instead, they treated the worst moment in my life like it was just a small problem.”

Her attorney, Howard Shernoff, said the company initially sent his client check for $5,000, or what it calculated to be about a month of service interruption at Salon Meritage.

“They repeatedly asserted ... the insurance policy only covered 30 days of business interruption,” Shernoff said. “So they issued a check for $5,000 for those days. Then later they sent another check for $15,000, failing to say what that was for. And then after reaffirming the 30 days position, another check mysteriously appeared for $8,000, which was called an accommodation to my client.”

The insurers said they paid for five to six months of service interruption, Shernoff said.

“She should have been paid for 12 months and double the rate the insurance company was using to compute” the payout, he said.

Fannin's attorneys estimate the company owes her $50,000 to $70,000, according to Shernoff, who said she is also seeking unspecified damages for emotional distress.

A representative of Hirsch, Closson, McMillan and Schroeder of San Diego, a law firm representing the insurance company, said there would be no comment on the lawsuit.

The Fannins had a “fairly common policy that does not include a specific time limit for business interruption because in 99 percent of business interruption cases there's no dispute,” Shernoff said.

“This was a very different situation,” he said. “All the hairdressers that comprised the hair salon were dead and the salon itself was scarred with bullets and blood.”

Also, Sandi Fannin was too “emotionally distraught” to go back to work within a month, Shernoff said.

The landlord told Fannin that “he could not re-lease the property. He tried with several other businesses ... and the salon would not have a chance unless it went with a full rebuild,” Shernoff said.

The insurance company objected to that, as well, according to Shernoff.

Salon Meritage is expected to reopen in mid-November, with a friend of Sandi Fannin taking it over, Shernoff said.

Initially the property had a “stigma” to it, but Seal Beach is a “pretty tight community and it kind of flipped and everyone was trying to support the reopening,” Shernoff said. “The community has vowed not to let that stigma keep them away.”

Fannin is “not litigious. She didn't want to sue anybody,” Shernoff said. “She just wants to be treated fairly and have a tiny bit of closure.”

Scott Evans Dekraai is charged with eight counts of murder in the Oct. 12, 2011, rampage.
Dekraai is accused of bursting into the salon and gunning down his 48-year-old ex-wife, Michelle Fourner, with whom he had been involved in a bitter child custody battle, along with Randy Fannin, 62; Victoria Ann Buzzo, 54; Lucia Bernice Kondas, 65; Laura Lee Elody, 46; Michele Daschbach Fast, 47; Christy Wilson, 47; and David Caouette, 64.

The lone survivor was a woman in her 70s.

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