SLABBED Daily – April 27

Call this the evening edition – but if I’d resolved my computer problem early enough to post this morning, I would have faced the problem of no news.  Even at this hour there wasn’t much but – just in case you haven’t heard – here goes:

We’re getting closer to having a FEMA director (and closer to hurricane season, too).  The Time Picayune reports:

In a quick, unanimous voice vote this afternoon, the Senate Homeland Security and Governmental Affairs Committee approved the nominations of Craig Fugate to be Administrator of the Federal Emergency Management Agency…

“As Director of the Florida Division of Emergency Management, Mr. Fugate has provided strong leadership, helping guide the state of Florida and relevant local governments through a range of challenges, including several devastating and deadly hurricanes,” said Committee Chairman Joseph Lieberman. “Mr. Fugate has the support of his peers, and everything I know of his record suggests he is an excellent choice for this job…

Eleven of the 16 members of the committee were on hand for the vote. Sen. Mary Landrieu, D-La., who also strongly supported Fugate’s confirmation, was in New Orleans announcing her support for keeping Jim Letten, a Republican, as U.S. Attorney for Louisiana’s Eastern District…

Say what, Senator? The TP had the story but no picture of the Senator who likely was wearing her flip flops.

U.S. Sen. Mary Landrieu said today she will recommend that Jim Letten retain his post as U.S. Attorney for Louisiana’s Eastern District. Continue reading “SLABBED Daily – April 27”

A Kuehn Appraisal Postscript: Hired Guns and Childrens Imagination Station v Prime Insurance Syndicate

Our posts on Kuehn v State Farm have created a good bit of buzz in certain insurance and legal circles as interested parties have flooded us with information on the appraisal clause, insurance cases involving appraisal and of course its misapplication in Dwyer which I profiled earlier today. Chip Merlin picked up our Kuehn coverage on his blog writing a couple of posts that copiously linked us. We’re grateful to be listed on Chip’s blogroll.

Unlike Chip I’ve never worked with Scot Spragins, the partner at Hickman, Goza & Spragins representing State Farm in Kuehn so I do not have that personal experience to add to my opinion of him. Like everyone else who hasn’t worked with Mr Spragins I only have the evidence submitted into the record of Kuehn to judge his professionalism by which I’ve concluded is very lacking. Simply put Mr Spragins and his firm are steppin’ out from literally hundreds of years of case law and insurance lore on both the appraisal clause and its application and he is smart enough to know it.

In my career as a CPA I’ve seen more than a few people refused legal services by ethical lawyers who recognized their prospective client’s legal position was contrary to established law. That is as it should be IMHO, practicing lawyers are the gatekeepers to our judicial system in respects and it keeps crap from clogging the court system. In looking at the Katrina insurance related litigation it has become clear there are certain lawyers, both plaintiff and insurance defense alike that will pump a dog legal position if the money is right. It is there that I still think Scot Spragins and his law firm resides.

Beyond the emails in the Kuehn evidentiary record we found there is a good bit of case law in this area. One such recent case was heard by Judge Louis Guirola little more than a year ago in the Children’s Imagination Station v Prime Insurance Syndicate that addressed these issues spot on. Like State Farm in Kuehn, Prime Synidcate was unhappy with the results of appraisal.  Unlike Kuehn and its blockbuster exhibition of bad faith by Team Spragins, Prime’s lawyers did not try to interfer with the process itself while the appraisal was ongoing. Prime simply tried to negate the results which was quickly bounced out of court house. I noted one final commonality with Kuehn in that appraiser Lewis O’Leary was involved, this time as umpire. Prime fought Children’s Imagination Station tooth and nail from ever getting the appraisal pursuant to the policy provisions, probably because they knew they lowballed the damage.  Here are some snippets from the granted motion for partial summary judgment against Prime: Continue reading “A Kuehn Appraisal Postscript: Hired Guns and Childrens Imagination Station v Prime Insurance Syndicate”

A bit more on the Appraisal Clause NFIP style as Edith Jones strikes again: Dwyer v Fidelity National Part 1

We’ve seen some brain dead decisions out of Edith Jones at the 5th Circuit. Some thought her infantilized analysis of anti-concurrent causation in Leonard could not be beat for setting new lows in judicial ignorance but Dwyer v Fidelity National might give Leonard a run for it’s money. We’ve been sitting on this case for several weeks now trying to find a way to fit it in. With State Farm’s counsels outrageous behavior in Kuehn v State Farm as our foil we’ll find how insurers are using appraisal at the court house steps as a way of dragging out litigation. In Dwyer we’ll also  find some old fashioned wind-water ambiguity and how the NFIP, Fidelity and it’s lawyers successfully exploited it before insurer friendly 5th Circuit Judge Edith Jones.  Let’s start with a short synopysis of the case courtesy of the 5th Circuit Court of Appeals:

The Dwyers purchased an SFIP (Standard Flood Insurance Policy) from Fidelity to protect their home in Slidell, Louisiana, obtaining $250,000 coverage for the building and $100,000 for its contents. Hurricane Katrina’s wind and flood buffeted the home in August 2005. Following inspection by an independent adjuster, Fidelity paid the policy limit for contents and $86,6291 for flooding-related building damages.

The Dwyers seem very responsible homeowners buying both the maximum amount of flood insurance allowed by law as well as wind insurance. Fidelity National, the nation’s largest WYO “Write Your Own” (Government backed Flood insurance) carrier wrote the NFIP coverage while Travelers underwrote the Dwyers wind coverage. As we’ll see this case is somewhat strange and includes the intersting undercurrent in that Dave Maurstad’s expedited claims procedures were evidently not followed in terms of the blanket tender of the flood policy, perhaps because the inherent conflict of interest involved when the WYO carrier also underwrites wind coverage was not present in this case as the Dwyers used a dedicated NFIP WYO underwriter to handle their coverage and thus their adjustment. (Rebecca Mowbray’s coverage of the linked GAO report can be found here.)

On February 21, 2006, Dwyersent a certified letter to both Fidelity and Traveler’s Insurance Company (“Traveler’s”), whose homeowner’s insurance policy on the Dwyer dwelling covers wind damage. The letter stated that a contractor’s estimate to repair the house was roughly $100,000 more than the combined amounts paid by Fidelity and Traveler’s. Dwyer wrote that neither he nor the contractor could accurately distinguish between wind and flood damage, so Dwyer recommended each company pay the additional expenses in proportion to the amount it had already paid. Based on this calculation, he requested an additional $85,471.89 from Fidelity.

We get a hint Ms Jones marches to the beat of a different insurance law drummer to the point of judicial activism preferring to ignore literally hundreds of years of case law as the case synopsis concludes: Continue reading “A bit more on the Appraisal Clause NFIP style as Edith Jones strikes again: Dwyer v Fidelity National Part 1”