It was the largest award of its kind in county history.

The jurors ordered Farmers Insurance Inc. to pay Gustavo Perez $25 million in punitive damages and $863,000 in compensatory damages.

Punitive damages are awarded to make an example of and punish defendants found guilty of acting in bad faith or with malice. Compensatory damages repay economic loss and pain and suffering.

"I can't remember anything that's even close," said Jennifer Shirk, president of the Tulare County Bar Association. "Twenty-five million in punitive damages is just astronomical in Tulare County. It's the stuff that you read about in lawyer magazines. Everyone was walking around the courthouse with their mouths open."

The case began in 1998 when Perez borrowed a tractor from his employer, DeJong Dairy, just off of State Route 63 north of Visalia.

Perez hired a day laborer and used the tractor to dig post holes for a corral at his nearby home. Later that night, the laborer was returning the tractor to the dairy across the highway when he caused it to stall.

Jesus Jimenez, who was hauling oranges in a big rig, collided with the tractor, which didn't have its lights on. The laborer who drove the tractor ran away after the crash and wasn't seen again.

Both vehicles were damaged. Jimenez suffered serious injuries and later sued Perez. The insurance company refused to hire an attorney to defend Perez. Jimenez in 2000 was awarded $413,000 for his injuries.

Fire Insurance Exchange, owned by Farmers, provided liability coverage, but Perez's policy had an exclusion for injuries resulting from the use of a motor vehicle. The policy defines a motor vehicle to include "a motorized land vehicle designed for travel on public roads."

During the two-week trial that ended Wednesday, the insurance company argued that it denied the claim because the farm tractor was designed for travel on public roads. Perez's attorney, Stuart Chandler, convinced jurors that the farm tractor was not designed to use on public roads. "This insurance company absolutely abandoned him," Chandler said.

Perez sued the company the following year for breach of contract, acting in bad faith, and infliction of emotional distress.

Jurors reached a verdict about the compensatory damages Tuesday and awarded the punitive damages the following day.

Farmer's Insurance spokeswoman Mary Flynn said company officials plan to appeal.

"We're confident that the verdict will be overturned," she said.

Perez said he understands there is still a long way to go before the case is over, but he's happy with the verdict.

"I've lost sleep and suffered headaches," he said. "I'm very happy that a large load has been taken off my shoulders."

Visalia attorney Victor Moheno, who has practiced law for more than 25 years, said the appeal process could take up to four years.

"In that time, people start to settle," Moheno said. "People can't wait as long as insurance companies can wait. I've been down that road, and it will be appealed and resolved for a significantly lower amount."

The reporter can be reached at ccarcamo@fresnobee.com or at 622-2419.