Welcome to SLABBED Louis Guirola, Jr. United States District Judge – Spansel v State Farm

…This evidence, viewed in the light most favorable to the Spansels, tends to show their claim was denied on October 19, before an adjustor had set foot on their property, reviewed photographs of the loss, or received any data other than the property’s location along Bay St. Louis. State Farm management affirmed this denial based solely on the property’s proximity to the Gulf of Mexico. This creates question for the jury as to whether State Farm lacked a legitimate arguable reason for denial of wind coverage under the homeowner’s policy…State Farm is not entitled to judgment as a matter of law on whether it lacked an arguable, legitimate reason for denial.

Because there is evidence that State Farm denied the claim without any adjustment or investigation, a question of fact exists as to whether State Farm acted at least in reckless disregard of the Spansels’ rights under the policy. Therefore, State Farm is not entitled to judgment as a matter of law on this portion of the bad faith claim either.

Next, the Spansels seek a declaratory judgment that the anti-concurrent clause is ambiguous and unenforceable. The anti-concurrent clause is cited in the previous section. State Farm argues that this clause has been held unambiguous and enforceable by the Fifth Circuit. Since that time, the Mississippi Supreme Court has rejected this contention. Corban, 20 So. 3d at ¶48. Corban held that the anti-concurrent clause was ambiguous and unenforceable to the extent that it purported to exclude any wind loss if it occurred separately from and in any sequence to excluded water loss. Id. at ¶¶32, 40-41. State Farm has not shown it is entitled to summary judgment on this portion of the declaratory judgment claim.

Although Judge Guirola granted most of State Farm’s motion, his reliance of decisions made by other members of the court and/or other courts makes his Memorandum Opinion and Order Granting in Part and Denying in Part Partial Summary Judgment extremely interesting reading.  However, before looking further at his Opinion – Order, his Order Denying State Farm’s Motion in Limine to Exclude Evidence merits a mention: Continue reading “Welcome to SLABBED Louis Guirola, Jr. United States District Judge – Spansel v State Farm”

Behavioral Finance 101: Expectations, Reality and the Total Return Swap.

Russell sent me this from the Wall Street Journal and it is quite good. The concept is fairly simple as Jason Zweig illustrates:

David Salem is president of the Investment Fund for Foundations, which manages $8 billion for more than 700 nonprofits. Mr. Salem periodically asks trustees and investment officers of these charities to imagine they can swap all their assets in exchange for a contract that guarantees them a risk-free return for the next 50 years, while also satisfying their current spending needs. Then he asks them what minimal rate of return, after inflation and all fees, they would accept in such a swap.

Does this concept translate to the average Joe saving for retirement? You bet it does as we continue:

Robert Veres, editor of the Inside Information financial-planning newsletter, recently asked his subscribers to estimate long-term future stock returns after inflation, expenses and taxes, what I call a “net-net-net” return. Several dozen leading financial advisers responded. Although some didn’t subtract taxes, the average answer was 6%. A few went as high as 9%.

We all should be so lucky. Historically, inflation has eaten away three percentage points of return a year. Investment expenses and taxes each have cut returns by roughly one to two percentage points a year. All told, those costs reduce annual returns by five to seven points. Continue reading “Behavioral Finance 101: Expectations, Reality and the Total Return Swap.”