“Who Dat” Judge Martin Feldman – the 5th Circuit’s Opinion in Versai v Clarendon

Sop is fluent in Louisiana while I, on the other hand, know little more than I’ve learned from college football and Hurricane Katrina about the State – barely enough to recognize the name  Martin Feldman when I read the Fifth Circuit’s February 19, 2009 Opinion in Versai Management v Clarendon America Insurance Company et al.

Feldman is a Federal District Judge in the Eastern District of Louisiana with a biography so contrary to the Fifth’s reversal in part of his decisions in this care that I felt the need to know “who dat” this judge who made these decisions.  Is he the reportedly “Intelligent, Pompous, egotistical, pushy, arrogant, unfair, no empathy for poor people and workers who come before him, his heart is with business” or the scholar:

“… a visiting lecturer at Cambridge University, and an Honorary Master of the Bench of the Inner Temple Inn of Court, London. Judge Feldman is a member of the Advisory Committee of the American Association for the Advancement of Science…”[who]… “was a lecturer in Constitutional Law and war powers at Syracuse University’s Maxwell School of Public Administration…Princeton University’s Distinguished Visiting Jurist in the James Madison Program of American Ideals and Institutions…and has been a guest lecturer at Amherst College in constitutional interpretation and the philosophy of the Rule of Law”?

Whether he is both or either, Judge Feldman has been a familiar name to the members of the Firth Circuit since at least 1984  – the year the Fifth Circuit reversed his Decision in Louisiana World Exposition Inc v. R Logue because his “order did not dispose of all the matters before the District Court”. What matters more than many times Feldman’s decisions have been appealed since that first year following his appointment to the federal bench is what those decisions that have been reversed suggest about Judge Feldman. For example, the Fifth Circuit’s 1993 Opinion “reversed and remanded” his decision in Buford v Rowan, a case in which:

…employee’s substantial rights to fair trial were impaired by defendants’ inferring that employee brought fraudulent claim from fact that his counsel had previously represented former co-worker in similar lawsuit, by likelihood that jury heard trial judge threaten employee’s counsel with jail during sidebar, and by trial court’s preventing employee’s counsel from countering defendants’ aspersions. (emphasis added)

It is in this  context – the juxtiposition of a Constitutional scholar and Judge whose own conduct was deemed potentially prejudicial to the decision reached by a defendant’s Constitutionally endowed jury – that we examine Fifth Circuit’s Opinion on Judge Feldman’s decision in Versai:

Appellant Versai Management Corporation (Versai) appeals the district court’s grant of summary judgment in favor of Appellees Clarendon AmericaInsurance Company (Clarendon) and Employers Fire Insurance Co. (EFIC) on (1) Versai’s contract claims for unpaid insurance proceeds for property damage, business interruption, replacement costs, and code compliance upgrades; and (2) Versai’s claims that EFIC and Clarendon violated Louisiana law by failing to promptly settle claims and by misrepresenting the terms of their policies. Versai also asks this court to find that the district court abused its discretion bydenying Versai’s motion to extend the deadline for filing expert reports. We affirm in part and reverse in part.

Versai, the Opinion noted, managed “the Versailles Arms Apartments in New Orleans”:

Versailles Arms Apartments are federally subsidized through the Department of Housing and Urban Development. The apartments consist of fifty residential buildings, each consisting of four first-floor apartments and four second-floor apartments. Forty-nine of the buildings suffered extensive damage during Hurricane Katrina during August of 2005 and were rendered uninhabitable until the property was repaired. The fiftieth building was destroyed in a natural gas explosion during the storm.

Property value that exceeds a certain limit, most often but not always commercial property, has surplus line coverage for the value in excess of that covered by what is known as an admitted carrier.

February of 2006, Versai retained SCC Ventures, L.L.C., to conduct repairs on the property. That month, SCC Ventures estimated that the repairs would cost $17,878,326. Lloyds of London, which provided $2.5 million in “all risk” property insurance, paid its policy limits in full in April of 2006. Versai’s flood insurance provider, the Standard Fire Insurance Company, was originally party to this suit but settled its claims with Versai for approximately $6 million. The remaining defendants, Clarendon and EFIC, together provided “non-flood” insurance on the apartments in excess of the $2.5 million provided by Lloyds, and this coverage was limited to a maximum recovery of $13,411,288. The Clarendon and EFIC policies follow the same terms of the underlying Lloyds Policy, but provided excess coverage once the Lloyds insurance limits were met…

Versai’s insurance policies with Clarendon and EFIC contained a requirement for submitting a proof of loss to obtain insurance payments…The plain reading of this section reveals no requirement for additional documentation to support a proof of loss. Despite their failure at oral argument to cite any language from the policy imposing such a requirement, EFIC and Clarendon urge us to read this requirement into the policy because “all” similar insurance policies require documentation. If this is so, their policy breaks the mold. We will not read in such a requirement where none exists…

This situation suggests “the presence of arguable factual contradictions that must be resolved by a fact finder, an exercise proscribed at the summary judgment stage of the case.” Carroll v. Metro. Ins. & Annuity Co., 166 F.3d 802, 808 (5th Cir. 1999). Therefore, summary judgment was unwarranted…

The Fifth Circuit reversed “the grant of summary judgment onVersai’s claims for property damage and business interruption” but affirmed “the district court’s grant of summary judgment  for building code compliance and replacement costs”.

Versai argues that it has raised a genuine issue of material fact regarding whether EFIC and Clarendon (1) acted in bad faith in failing to pay claims by the deadlines set out in sections 1892(B)(1) and1973(B)(5) after receiving satisfactory proofs of loss; and (2) violated section 1973(B)(5) when their independent adjuster, Bill Adams, made misrepresentations to Versai concerning the availability of code upgrade coverage. We address these claims in turn…

EFIC and Clarendon attempt to distinguish the facts of this case by showing that their eventual payment and the length of delay compare favorably with the actions of the insurer in Louisiana Bag, but merely behaving in a less-arbitrary and capricious manner does not absolve insurers of the consequences of delay… Thus, EFIC and Clarendon are not entitled to summary judgment…

Versai is also entitled to a reversal of the district court’s grant of summary judgment on its claim of misrepresentation under Louisiana Revised Statutes section 22:1973B(1). Versai argues that it provided evidence that EFIC and Clarendon’s adjuster, Adams, misrepresented the availability of insurance upgrades for compliance with updated building codes. A “misrepresentation” occurs when an “an insurer either makes untrue statements to an insured concerning pertinent facts [of a policy] or fails to divulge pertinent facts to the insured.”

The district court’s award of summary judgment on these issues was also reversed by the Fifth Circuit.  However, the Fifth affirmed the district court’s “denial of Versai’s motion to extend the expert report deadline” and it is this portion of the Opinion that invites controvery:

Finally, Versai argues that the district court abused its discretion when it had denied Versai’s motion to extend the deadline to produce expert witness reports. A district court’s scheduling decision is reviewed for abuse of discretion, and that discretion is “exceedingly wide.”…Versai argues, without support, that when the court extends a deadline for one party, the court abuses its discretion if it does not extend the same courtesy to the opposing party. Even if Versai could prove that the district court extended a deadline on behalf of EFIC and Clarendon, we would nevertheless refuse to adopt Versai’s proposed rule that would limit the court’s broad discretion over matters concerning its own docket.

The predicted controversy, should there be one, will be the result of the inconsistent application of the “court’s broad discretion” and not the law granting the discretion.  Does a court, in this case Feldman’s, make discretionary decisions more favorable to defendants than plaintiffs or favor particular types of individuals or entities when such is represented as a defendant or plaintiff?

Assuming for the moment, there are those whose experiences suggest there are some who disproportionately benefit from discretionary decisions, the question to be answered is why are there no records kept by the courts to prove otherwise. Equal justice can be measured.