The ABA Journal is reporting on Kodrin

And staff writer Martha Neil once again linked us. We’re Martha positive here at slabbed, here is the story:

An award of punitive damages and attorney fees in a bad-faith case against an insurance company has been overturned by the 5th U.S. Circuit Court of Appeals.

State Farm Fire and Casualty Co. was mistaken when it denied coverage for wind-based damage from Hurricane Katrina, wrongly attributing the destruction of a home to uncovered water damage. But the plaintiff homeowners, Michael and Judy Kodrin, didn’t establish that the insurer acted without a good-faith basis in denying coverage. Hence, although they are still entitled to an earlier $200,000 jury award for the wind damage to their home, they will no longer get additional punitive damages and an award of attorney fees for bad faith under the 5th Circuit decision, the Associated Press explains.

“The only evidence that the Kodrins offered to demonstrate that this denial was in bad faith is the fact of the denial itself and their expert’s testimony that wind actually caused the damage to the home. This is evidence that State Farm was wrong about the cause of damage, but without more, it is not evidence of bad faith,” the appeals court states in its written opinion (PDF) yesterday.

“An insurer cannot be held to have acted in bad faith simply because it eventually turned out to be wrong about the cause of the damage,” the opinion continues. “Where there is a serious dispute as to the nature of the loss, thus leaving the question of coverage in doubt, the insurer’s refusal to pay the claim is not arbitrary, capricious or without probable cause.”

The bad-faith damages were awarded under a Louisiana statute that sets requirements for adjusting an insurance claim.

“Felt like I got punched in my stomach. So did my clients,” says attorney John Redmann, who represents the Kodrins. He says they are considering whether to ask the 5th Circuit for an en banc rehearing, the AP reports.

To lawyers like the Kodrin’s John Redmann, I’ll publicly say there is no reason in 2009 to take a gut punch, especially a needless one in a wind-water case. Beyond being a blog we are a resource, a public resource that is absolutely free of charge. We are blessed to have some of the finest consumer insurance lawyers in the southeast post with us. Beyond steering some sunshine on these wind-water cases we facilitate information sharing to anyone that can click a mouse. The die was cast on Kodrin long before us and I’m not casting stones at Mr Redmann. But we also have other cases with fact patterns just like Kodrin where the 5th Circuit went in the exact opposite direction BECAUSE OF HOW THE CASE AND THE EVIDENCE WAS PRESENTED. A lawyer representing a consumer in a wind-water case in 2009 is committing malpractice IMHO to not use the free information and expertise available here at slabbed and other spots on the internet.

I’m off my soapbox now as we return to our regular programming…..

sop

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