Day: December 28, 2008

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”