Behind a towering hedge in the Los Angeles neighborhood of Pacific Palisades sits a house that Tom Cruise bought in 1990 and Nicole Kidman sold after their divorce. A few doors down is Steven Spielberg’s estate. Across the street is Bill Cosby’s.
The property shares a fence line with that of the boxing legend Sugar Ray Leonard — “our dogs bark at each other,” said Austin Beutner, who bought the house from Ms. Kidman in 2002.
Few blocks in America hold more fame, money and access. But nearly 21 months after the house was damaged in the Palisades fire, it sits empty. Valued at around $20 million, it is uninhabitable, its walls laced with lead at levels far above what federal regulators consider hazardous, according to testing commissioned by the family.
On Monday in Los Angeles County Superior Court, Mr. Beutner and his wife, Virginia, sued their insurer, Chubb — whose subsidiary Bankers Standard Insurance Company issued their policy — and two environmental consulting firms Chubb hired. The suit accuses Chubb of breach of contract and professional negligence for refusing to pay for the full cleanup of lead and other toxins. In a letter to Chubb last month, the family’s lawyer accused the company of relying on “pay-to-play” consultants and “junk science.”
A Chubb spokesman, Michael Tomaso, declined to comment. The two consulting firms did not immediately respond to requests for comment.
The lawsuit joins a mounting pile of litigation filed by homeowners whose houses survived the January 2025 fires, but not the smoke. What sets it apart is who filed it.
Mr. Beutner has spent his career in rooms where decisions are made. At 29, he became the youngest partner at the Blackstone Group, and then co-founded the investment bank Evercore. He is the former deputy mayor of Los Angeles, the former publisher of The Los Angeles Times and the former superintendent of the nation’s second-largest school district. In 2022, he authored a ballot measure that now sends around $1 billion a year to arts and music programs in California’s public schools.
“I’ll be fine either way,” he said in a telephone interview before filing the suit. “But there are thousands of others who have claims like mine who may not have the agency I do. They may not be able to afford the lawyers.” Insurers are pushing families back into contaminated homes and keeping the danger quiet — a public health crisis — and litigation might be one of the few ways to sound the alarm, he said.
The Los Angeles fires killed 31 people and incinerated more than 16,000 buildings. Of the more than 40,000 insurance claims filed in the aftermath, approximately 13,000 — or nearly one out of three — were for smoke-damaged homes, according to the California Department of Insurance.
Many of those claims remain unsettled and families continue to be displaced, according to advocates for policyholders.
At the heart of this issue is a regulatory vacuum: With no state or national standards for when a smoke-damaged home is considered clean, insurers often test only for soot, char and ash — the visible traces of a fire — and pay for equally visible fixes: vacuuming, wiping and painting, a New York Times investigation found.
Last month, Gov. Gavin Newsom, a Democrat, signed two bills that are meant to address that issue. One directs the state to create science-based standards for measuring and cleaning heavy metals and other contaminants inside homes. The other requires insurers to pay for cleanup in line with those standards, and presumes that smoke damage in a fire zone is a result of a fire.
Those laws, the first of their kind in the nation, take effect over the next three years and are not retroactive, stranding homeowners like the Beutners and thousands of others of lesser means.
Disputes over insurance claims normally unfold out of sight, in adjusters’ letters and confidential settlements. But the scale of the Los Angeles fires has pushed them into the open. The 2025 fires were the costliest wildfire disasters on record for insurers, with estimates putting insured losses at as much as $35 billion, more than double the previous record, set by the 2018 Camp fire, according to Verisk, an insurance data firm.
Smoke has turned out to be one of the main reasons: In the first 30 days after the fires, 30 percent of homeowners’ claims were for smoke damage, compared with just 3 percent after the Camp fire, according to data collected by Verisk.
The Beutners had insured their home with Chubb for 18 years, paying millions of dollars in premiums, the lawsuit says. And while Chubb writes only around 2 percent of homeowner premiums in California, it took an outsize hit: In 2025, it recorded about $1.7 billion in California homeowner losses — roughly five times the premiums it earned on those policies, state data show.
On Jan. 7, 2025, the Palisades fire swept through the Beutners’ neighborhood but stopped short of their house, even as 100-mile-per-hour winds drove soot, char and ash inside. The family’s first Chubb adjuster called it the “worst house we have seen,” according to the suit filed on Monday.
Two weeks after the fire, Chubb sent Environmental Testing Associates, one of the two firms now being sued, to test the house. The firm’s 17 tape samples measured soot, char and ash, but not the heavy metals inside them, nor did it test in concealed spaces like wall cavities and attics. The firm recommended air filters, cleaning and vacuuming — treating the damage “as if the problem could be fixed with Lysol wipes,” the Beutners’ lawyers later wrote.
Like so many other families affected by the wildfire, the Beutners soon found themselves locked in a battle of experts. When the family hired its own industrial hygienist to test the house, he found alarming levels of toxins — including in the ceiling of the front hallway, which contained 9,575 micrograms of lead per square foot, a reading that is 239 times the federal limit for lead found indoors, according to the testing results shared with The Times.
The consultant described the home as “hazardous” and recommended tearing out the walls, ceilings and insulation — essentially a gut renovation.
By contrast, the consultant hired by Chubb insisted that the lead came from old paint in the home, built in the 1940s, and that lithium and arsenic came from the soil or else from the Earth’s crust, according to the reports they produced, which were shared with The Times, as well as the family’s suit.
Chubb has paid millions of dollars in claims so far for repairs and relocation assistance for the Beutner household. Mr. Beutner said that money has amounted to less than a quarter of the cost of remediating the smoke damage, Mr. Beutner said.
Regulators have set limits for the amount of lead found inside homes, but there are no such limits for the numerous other poisons unleashed in an urban fire — including lithium and arsenic, as well as cadmium and chromium. Several of these toxins are regulated in workplaces such as factories, but the lack of a corresponding standard for residential settings has left families in limbo.
The families who have sued are only a small share of the more than 13,000 households whose homes survived the fires but not the smoke. For many, time is running out: January marks the deadline to sue their insurer.
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