Policyholder rights – a movement in our midst

I doubt there will be a comparable day of national day of celebration – or even a date that would have related significance – but I do believe there will come a time when policyholders are treated fairly without a post-event legal battle – and, in that regard, we in Mississippi, once again, have a movement in our midst.

Like all movements, this fight for policyholder rights has had its defining moments, its heroes and its victims – many  unrecognized and even more to come, no doubt, before victory is won.

One of those unrecognized moments may prove to be the recent Louisiana court decision reported by Rebecca Mowbray: Appeals court finds that it was legal for homeowner to file suit after deadline.

A state appeals court opinion issued Jan. 7 says that it was legal for New Orleans homeowner Brenda Pitts to have filed a lawsuit against Louisiana Citizens Property Insurance Corp. months after the deadline for initiating litigation because a class action lawsuit had stopped the clock from running out.

If the unanimous decision from the Fourth Circuit Court of Appeal stands, Citizens, the state sponsored insurer of last resort, believes that the ruling will open the door for new people to file lawsuits against the company over their 2005 hurricane claims. (emphasis added)

“We obviously don’t agree with the ruling. We will appeal it to the Supreme Court,” said John Wortman, chief executive of Citizens, which has had a goal of resolving all claims from Katrina, Rita, Gustav and Ike by the start of hurricane season June 1.

Although comments from the industry reported in Mowbray’s story focused on the potential cost of this ruling, I hope that one day we will see a  court  dispense a similar full measure of justice to those who, as Glenda Shows’ claim stated, experienced “mediation fraud” in the State Farm – Dale/MDI mediation process.

While the opinion only concerns Citizens, Greg LaCost, an attorney with the Property Casualty Insurers Association of America, believes that dissatisfied policyholders could make the same argument against any other insurance company if a class action lawsuit is pending with similar claims — and that means practically any insurer in the state because so many class actions have been filed.

LaCost said that insurers will be disappointed at the news, because they consider the statute of limitations on filing suits in calculating their potential exposure to litigation when setting rates.

How many people who didn’t file lawsuits within the stated deadline of two years after the storms who may suddenly decide they’re dissatisfied with their payments is an open question, LaCost said. “It all depends on how creative the trial lawyers are in advertising that you’ve got another shot at the apple,” he said.

Mr. LaCost appears to be the kind of thinker who saw no injustice in “separate but equal” and blamed civil unrest on civil rights lawyers.  However, as Soren Gisleson’s response points out, creative advertising won’t be needed.  Gisleson, head of the insurance section at the Louisiana Association for Justice, told Mowbray:

…news of the Pitts v. Citizens opinion has started to spread, and some policyholders who have found that they didn’t collect enough money to repair their homes have inquired about filing suit. “Some attorneys have had calls,” he said.

Adding more background on Pitts v Citizens, Mowbray provides food for thought about Katrina litigation.

In the Pitts case, the homeowner’s grievances were originally covered by two class action petitions that had been filed against Citizens. One of those cases was thrown out, and the other had its proposed class definition narrowed by the court in January 2008 in such a way that it no longer included Pitts’ complaint that her payments were “grossly inadequate.”

In February 2008, Pitts filed an individual suit against Citizens, before the notice about the narrowing of the class in Chalona v. Louisiana Citizens was sent out on April 24, 2008.

I don’t know if there is a comparable example in Mississippi.  Here ,the SOL ran three years and not two as it does in Louisiana.

I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression, will be transformed into an oasis of freedom and justice.

p1010049-oasis2

Today, we dream a different dream as we swelter with the  heat of injustice inflicted on policyholders such as the ruling a right to claim wind damage is nullified by acceptance of an NFIP payment.

How and when we overcome such injustice, I can not say – only that we shall overcome and what you see in this picture is not the oasis of a Mississippi in anyone’s dream – or the product of any trial lawyer’s creative advertising.

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