Ringing in the New Year

img00029We’ve been blessed with an inordinate amount of work lately thus my relative absence from slabbed and today is no different.  That said I managed to catch a picture of a boat coming in from the oyster reef off Pass Christian. The oysters this year are extra salty and very, very, very good.

Some random New Years eve thoughts:

I’m thinking LSU won’t get it done tonight but I’m hoping I’m wrong about that.

Is anyone else shopping the massive sale on the Naz?

Will Norton’s grandson ever answer his phone again?

Random thoughts, drunken thoughts or no thoughts can be added in the comments.

Happy New Year to all.

sop

WaPo – AIG a fulcrum of the global financial crisis

Downgrades and Downfall, the last story in a three-part series on AIG,  published today in the Washington Post  makes for some great reading between ballgames.

The contracts were flying out of AIG Financial Products. Hardly anyone outside Wall Street had ever heard of credit-default swaps, but by early 2005, investment banks were snapping them up to insure all kinds of deals in case of default, fueling one of the great financial booms in U.S. history.

During twice-monthly conference calls that originated from the company’s headquarters in Wilton, Conn., president Joseph Cassano would listen as marketing executive Alan Frost listed the latest swap transactions for associates in the firm’s offices in London, Paris and Tokyo.

Once a small part of the firm’s business, the increasingly popular contracts had helped boost the company’s profits to record levels. The company’s computer models continued to show only a minute chance that the firm would ever pay out a dime on the contracts, and it turned down deals that didn’t meet its standards. (emphasis added) Continue reading “WaPo – AIG a fulcrum of the global financial crisis”

What a surprise! Deputy Commissioner of MID joins law firm representing State Farm

The announcement in the Sun Herald  mentioned Deputy Commissioner of Insurance Lee Harrell was leaving the Department to join a law firm.

The Mississippi Insurance Department’s deputy commissioner, Lee Harrell, is leaving after 16 years to work for Baker, Donelson, Bearman, Caldwell and Berkowitz law firm…Harrell spent most of his career under former Insurance Commissioner George Dale, who was defeated for re-election in 2007. Dale, the nation’s longest-serving commissioner, now works in the government relations department of Adams and Reese law firm.

Unlike Dale, Harrell is an attorney. He was unavailable for comment Wednesday. Chaney said Harrell will focus on insurance cases in his new job. Baker, Donelson represents insurance companies and policyholders…Harrell oversaw a market conduct study of State Farm after Dale’s departure. (emphasis added)

Chip Merlin connected the dots.

Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who “oversaw” the Mississippi Insurance Department’s Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters. Continue reading “What a surprise! Deputy Commissioner of MID joins law firm representing State Farm”

New Orleans Ladder now an award-winning blog

It’s a 2008 Golden Monkeyfist for the Editilla – along with congratulations from SLABBED!

The Delta Prime Award (with hopeful clusters) To New Orleans Ladder for keeping the tragedy of New Orleans and the Gulf awake in our hearts, minds, and deeds, while this sad excuse for an Administration boldly forgot.

Way to go, Editilla! We so proud.

Hurricane damage claims score before start of today’s Bills v Patriots game

A windstorm playing in today’s game between the Buffalo Bills and New England Patriots provides data on wind damage at various speeds without any associated hurricane bias.

Winds gusting up to 75 mph tore a strip off the Bills’ practice fieldhouse and tilted both goal posts inside Ralph Wilson Stadium prior to Buffalo’s game against the New England Patriots on Sunday.

Though the blustery conditions aren’t expected to delay the start of the 1 p.m. game, work crews used ropes and a forklift to re-secure and re-center the goal posts, which shook heavily in the wind.

Very strong gusts occurred at about 8:30 a.m., when they tore a strip 2 feet wide and more than 50 feet long off the metal roof of the 12-story fieldhouse across the parking lot from the stadium. There was damage reported inside the facility, but no one was injured. Pregame events inside the fieldhouse were canceled.

The winds also tore off part of a goal post on the Bills’ outdoor practice field next to the fieldhouse…

(emphasis added)

Advocates for putting the Saffir-Simpson Scale to rest will, no doubt, find more reliable data from windstorm damage reports – mindful, of course, that scientifically speaking, windstorms are wind-only winter-weather events.

A recent article in the Houston Chronicle noted support by some scientists to replace the Saffir-Simpson Hurricane Scale with other more accurate measures of hurricane destructiveness. It is about time. Continue reading “Hurricane damage claims score before start of today’s Bills v Patriots game”

Coverage not required for claim of bad faith

While we’re seeing Katrina cases gutted before trial, the Supreme Court in Washington (state) has ruled on one where there was nothing to gut but the plaintiff’s claim of bad faith.

Insurance Law Hawaii reports on Washington Court Allows Bad Faith Action for Delay Even If No Coverage.

In a decision policy holders will appreciate, the Washington Supreme Court recently held the insured could pursue bad faith claims for delay in processing the claim even when there is no coverage under the policy. See St. Paul Fire and Marine Ins. Co. v. Onvia, Inc., 2008 Wash. LEXIS 1055 (Wash. Nov. 26, 2008).

The case came to the Court on certified questions from the U.S. District Court, Western District of Washington. St. Paul did not act in bad faith in refusing to defend, settle, or indemnify against a third-party liability claim because there was no coverage under the policy. But the issue was whether the insured could pursue common law bad faith and claims under the Consumer Protection Act based on St. Paul’s delay in handling the claim.

The insured tendered the suit to St. Paul. It took nine months for St. Paul to deny coverage and a defense. The insured settled the underlying suit, which included assigning its rights to sue St. Paul. The suit for declaratory relief alleged St. Paul violated a number of insurance claims-handling regulations in bad faith, including failing to timely acknowledge and act upon the notice of the claim and tender of defense, and by failing to promptly or reasonably investigate the claim.

The Court decided St. Paul had acted in bad faith even though there was no coverage under its policy. Under Washington law (similar to Hawai`i law), every insurer had a duty to act promptly, in both communication and investigation, in response to a claim or tender of defense. Therefore, a third party insured had a cause of action for bad faith claims handling that was not dependent on the duty to indemnify, settle, or defend. However, the insured could not take advantage of the remedy of coverage by estoppel with the harm presumed. Instead, the insured had to prove actual harm and “damages were limited to the amounts incurred as a result of the bad faith . . . as well as general tort damages.”

The Court also held that the insured could bring suit under the Consumer Protection Act even though there was no duty to settle, indemnify, or defend. But again, the remedy would be limited to the statutory remedies available to any successful claimant under the Consumer Protection Act.

Under Hawaii law, a claim for the tort of bad faith does not turn on whether the claim for benefits are due, but instead turns on the conduct of the insurance company in handling the claim…

Allegations that Katrina claims handling was violating Mississippi’s Consumer Protection Act were among those made by Attorney General Hood following the storm Continue reading “Coverage not required for claim of bad faith”

Rebecca Mowbray and the Times Picayune chip in with Dickerson coverage

The importance of the recent Dickerson decision at the Fifth Circuit Court of Appeals can not be understated. Though the case was litgated under Louisiana law IMO some of the logic, including the portion on extra contractual damages that can result from bad faith dovetail well with Mississippi’s Broussard v State Farm and another case I’ll circle back to at the end of this post. First up is Ms Mowbray’s story which includes some analysis from noted insurance defense lawyer Randy Maniloff:

In a rare win for policyholders in an appellate court, the 5th U.S. Circuit Court of Appeals said this week that insurers can be held responsible for mental anguish damages when they show bad faith in paying claims.

The decision upheld a ruling from federal court in New Orleans in the case of Marrero homeowner Dale Dickerson, who was forced to live in his bathtub-refinishing shop and take showers under a cold garden hose while standing on a wooden pallet in an unheated room for a year and a half while fighting Lexington Insurance Co., a unit of AIG , for proper payment of his Hurricane Katrina claim.

A three-judge panel upheld U.S. District Court Judge Carl Barbier’s finding that Lexington acted in bad faith for dragging out payment of Dickerson’s claim without reason and should be held responsible for inflicting unnecessary stress on Dickerson. Bad faith means that an insurer was abitrary and capricious in its claims-handling, and failed to pay without probable cause. Continue reading “Rebecca Mowbray and the Times Picayune chip in with Dickerson coverage”

not like kissing your sister – Merlin on claims settlement

In my non-lawyer world, you either win, lose or tie – and I’ve more or less applied that understanding to the claims disputes following Katrina.

Consequently, my view of a settlement agreement has been “like kissing your sister” – a tie, not a win or a loss.

Thanks to two very candid posts by Chip Merlin, I have a more enlightened perspective. Since I’m genetically predisposed to fight for a cause I believe in, I had to read each of Chip’s posts twice before the lights turned on; but, he clearly explains how settlement can be a big win, not just a win.

The first, Effective Endgame Communication, is an eye-opener or the preparation that goes into the settlement process.

Most cases resolve before a trial. Continue reading “not like kissing your sister – Merlin on claims settlement”

Lawyer-Insurer communication about claims not work product or privileged- how’s that for an intervening authority?

Having gotten past the list I made and checked twice, I’m back to the “to do” list for slabbled and thought anyone else not out shopping might find this as interesting a read as I did.

…when a lawyer handles claims, or gives an insurance company advice in the ordinary course of claims handling business, the communications are not privileged and are not work product. That is true whether the lawyer is in-house counsel or outside counsel.

Not convinced? Case law is clear on this point, but, if you need additional convincing, look at what insurance companies have said about this. When insurance companies get involved with internecine disputes regarding allocation or reinsurance or any number of issues, they often make the same arguments that they dispute when the argument comes from policyholder’s counsel. A good example of this is the recent Southern District of New York decision in AIU Insurance v. TIG Insurance, No. 07 Civ. 7052, 2008 U.S. Dist. LEXIS 66370 (S.D.N.Y. Aug. 28, 2008) (“AIU”). Continue reading “Lawyer-Insurer communication about claims not work product or privileged- how’s that for an intervening authority?”