Welcome to Slabbed Mr Moran and Our Condolences for the Way You Were Treated on the MID Farm…

Anita Lee has a way of finding the perfect example to illustrate the complex chain of events that has become the post Katrina experience on the coast. I have had far more ideas for posts than time to write them but I’ll lay my plans for this morning aside because Mr Moran’s story is too good to keep from our readers.

Before I get to the Anita’s report I’ll backtrack to set up the slabbed background for the story. It all started when Jim Hood announced he settled his State civil case against State Farm, kicking off the rather predictable shill response from the combo of partisan Jim Hood haters and insurance types. We weren’t shy about calling out the spinmeisters and their self serving revisionist history of those particular events by presenting less biased contemporary news accounts from the time.

What started as another Jim Hood cyber dog pile morphed to the ridiculous when former disgraced insurance commissioner George Dale and current commissioner Mike Chaney chimed in claiming Jim Hood deserved none of the credit for the second State Farm round of mediation and claims re evaluation saying the Mississippi Insurance Department deserved it.

The sheer stupidity of the pols claiming credit for what happened with State Farm after the storm lead us to visit the history beginning with the first MID mediation program which was deeply flawed and allowed for an officially sanctioned platform for insurers to fleece their policyholders. My remembrances from the time was the elderly were especially vulnerable to being taken advantage of by George Dale’s mediation process. Revisiting that issue also raised a legal question and Nowdy’s post and the resulting comments further illuminated why the slabbed largely viewed MID’s mediation as a sham. We continue to give George Dale and Mike Chaney at MID the credit they so publicly craved for helping a large insurance company screw the citizens of the Mississippi Gulf Coast.

This leads us back to Anita Lee’s excellent account of Mr Roland Moran and his battle with the Good Neighbor. I do hope Commissioner Chaney calls Mr Moran to let him know he and George Dale deserve the credit for his predicament rather than Jim Hood. Interesting that the process has morphed from one of properly adjusting Mr Moran’s claim to giving him the minimum due. We have source documents from the story here and here. The elderly were especially vulnerable in George Dale’s mediation as Mr Moran’s story again illustrates.

State Farm has told Roland Moran he can take or leave a final payment for damage from Katrina.

Moran must decide by Friday whether he will settle for the $57,000 State Farm is offering. The company refuses to pay the amount set through an arbitration process – $170,150 for additional wind damage – but the state and courts have left him little if any recourse. His other option may be zero.

“I feel that they just run over people,” Moran said. “They offer them something and hope they’ll take it and just go on.”

State Farm disputes Moran’s view of his claim.

“State Farm has gone through every process and procedure in an effort to satisfy Mr. Moran,” spokesman Jeff McCollum said Tuesday. “And even at this point when we are not obligated to pay more, we are making another attempt to pay additional money.”

The Morans lost their St. Martin home to Hurricane Katrina. By State Farm’s measure, 5 feet of Back Bay water flooded the house, which Moran had paid off in 1991. In January 2006, State Farm denied his claim. He had no flood insurance.

Moran, who retired from Northrop Grumman Shipbuilding, hired a public adjuster to document his losses from Category 3 winds.

Differences were settled in a state-run mediation program. Moran accepted a check for $90,000 – around 18 percent of his State Farm policy limits – and relinquished his right to sue over the damage in dispute.

In response to complaints about State Farm, the Mississippi Insurance Department in March 2007 ordered the company to re-evaluate policyholders’ losses Coastwide, including those previously settled through mediation. For homeowners such as Moran who were left with only piers or slabs, total payments from State Farm for all coverages available – structural, personal property, loss of use – had to equal at least 50 percent of structural policy limits.

State Farm offered $57,000, or about 52 percent of Moran’s policy limits, which he rejected. He chose another option the Insurance Department had for re-evaluation, non-binding arbitration.

Each side stated its case in the wind vs. water debate. Moran wanted $267,000. State Farm offered $76,388.

Seven days later, the arbitrator finalized his decision, finding Moran was entitled to $170,150 for additional wind damage. State Farm refused to pay that amount.

Moran sued, seeking policy limits, $50,000 for emotional distress and $5 million in damages to punish the company for “gross reckless negligence.” The lawsuit was filed in state court, but moved at State Farm’s request to federal court.

The case was thrown out. 


Timeline

Jan. 17, 2006: State Farm denies St. Martin resident Roland Moran’s Katrina claim, citing the flood exemption in its policy.

Sept. 14, 2006: Moran accepts $90,000 from State Farm at mediation and relinquishes his right to sue unless additional damage is discovered.

March 19, 2007: State Farm agrees to reopen claims, including those settled in mediation. Moran is offered an additional $57,000 for wind damage.

Aug. 7, 2007: In non-binding arbitration, State Farm offers Moran $76,388, which he rejects.

Aug. 14, 2007: The arbitrator concludes State Farm owes Moran an additional $170,150 for wind damage, an amount the insurer refuses to pay.

Oct. 22, 2007: Moran sues State Farm, seeking policy limits, $50,000 for emotional distress and $5 million to punish the company for treating him with “gross reckless negligence;” State Farm has the case moved to federal court.

July 2, 2008:Judge Sul Ozerden dismisses Moran’s lawsuit because he signed a legal release in mediation and has documented no additional property damage since then.

Aug. 26, 2008: State Farm’s final offer to Moran is $57,000.

8 thoughts on “Welcome to Slabbed Mr Moran and Our Condolences for the Way You Were Treated on the MID Farm…”

  1. While Moran gets my sympathy for what he suffered in he storm, I’m not sure why he is due condolences as far as the mediation goes. He participated in a mediation with the help of his public adjuster. It looks pretty clear that there were in fact damages not covered as they resulted from flood. He accepted $90,000 to setlle the wind claim. Why is that an indictment of the mediation process? He had the option of rejecting the offer and pursuing litigation, as he ended up doing later.

  2. Mediation becomes dangerous when one party has oversized negotiating power over the other. The goal of mediation is to reach a compromise. Insurers decided the value of the claim in advance of mediation and made it a take it or leave it proposition.

    For an older guy or gal in a FEMA trailer with no prosepcts of rebuilding when they were initially denied such bullyting tactics later on proved very effective.

    It is why you have policyholders quoted in the media saying the process reduced them to begging. Mr Dale’s predecessor is a veritable rocket scientist for taking credit for that.

    sop

  3. justme, if arbitration is binding then why isn’t State Farm paying the amount that came out of that process? How can they get by with that?

  4. Because the arbitration was not binding Nowdy. Basic policyholder protections that Senter rejected as too weak in Woullard were completely absent in Mediation Part Deux.

    In hindsight Mr Moran should have taken the 57K then because State Farm had the fix in thanks to George Dale and Mike Chaney (since he wants that credit) and he was SOL after he took money in mediation Part one.

  5. So State Farm can just blow off the arbitration and make folks sign away any related legal rights – all with the blessing of the Mississippi Department of Insurance, Sop? That really sucks.

  6. Yeah that pretty much sums it up Nowdy. You think Mr Moran has heard from Commissioner Chaney today claiming credit for George Dale’s MID programs?

    Herded and fleeced……..

    sop

  7. State Farm could decide not to pay the arbitration award since it wasn’t binding. They couldn’t “make folks sign away any related legal rights”. Moran always had the option and ability to not accept a settlement and pursue litigation, as he did later and as others have.

  8. Just like they decided not to provide the coverage people paid for, just me.

    Effective mediation requires an effective Mediator and some obviously weren’t – and it requires good faith on the part of both parties.

    People who have already denied a claim are not good candidates for mediation IMO the power gap between the parties was just too wide.

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