Grit and grocer win $3.5 million – Ferrara v Lafayette Insurance (Corrected)

Credit the New Orleans firm Capitelli and Wicker with the grit to win a $3.5 million jury award for Ferrara’s Supermarket.  The grocer had been in business 99 years before the Elysian Fields location was destroyed by Hurricane Katrina.

Attorneys Carey Wicker and James Watkins brought home the bacon for the Plaintiffs with evidence  Lafayette’s engineer was not licensed to practice in Louisiana or supervised by a Louisiana licensed engineer as the law requires “direct control and personal supervision”.

While the engineer’s qualifications were clearly a significant issue, the Plaintiffs had a strong case against Lafayette.  A reader from New Orleans provided SLABBED with a summary of the case tried in State court:

During Hurricane Katrina, wind and driving rain opened spaces in the roof, walls, doors and windows of the supermarket, and water and moisture entered the premises causing extensive damage.

Additionally, uplift forces on the flat roof (wind blowing over parapet) caused structural damage to the north-facing wall of the building as well as roof framing members’ connection to that wall. That structural damage, solely caused by wind forces, rendered the building a total loss because of the cost and time associated with repair compared to demolition and rebuild.

After inspecting the building, an Adjuster retained by Lafayette recommended a total loss, due to wind, and payment of policy limits on the building ($592,700), $111,000 in business personal property (contents), and an initial payment on the business income loss of $75,576.00 through 11/30/05.  The adjuster then recommended depreciation of -$296,350.00 on the structure, -$33,300.00 on the contents and subtracted a deductible of $10,000.00 for a suggested payment of $439,626.00.  Lafayette did not accept this adjustment.

Instead, Lafayette sent its own adjusters, including an “expert” who would testify at trial, to “re-adjust” the claim and hired an engineer who found the building damage was caused by flood waters.  Lafayette adjusters concurred with this assessment, and Lafayette accepted this adjustment and paid $15,494.44 (less $10,000 deductible) for the building, $0.00 for the contents and $4,047 for one week of business income loss/continuing expense.  With application of co-insurance: this amounts to a difference of $420,000 from the initial estimate.  It should be noted that the engineer retained by Lafayette and and all of the Company’s own adjusters reported interior damage (assessed at approximately $10,000.00) that was never paid.

Ferrara, Inc. hired their own engineer who confirmed the earlier assessment of the general contractor: the building had suffered structural damage as a result of uplift forces in the roof of the building rendering the building a total loss caused by wind.

The insurance industry heavily promoted the image of the “New Orleans Flood” in an attempt to shift responsibility for covered wind damage to the excluded damage from flood.

SLABBED congratulates Carey Wicker and James Watkins and wonders just how many property owners in New Orleans have similarly been denied the coverage they purchased.

Ferrara, Inc. paid $258,372.40 to Lafayette in premiums over the period 1999 – 2005.

Wind comes before water in a hurricane!

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