Magnum scores a TKO in the War by the Shore! (Part 1)

Any U. S. Magistrate from South Texas to the Southern District of Alabama could have written this exact same Order and Opinion in the aftermath of Hurricanes Katrina, Rita, Wilma and then Ike but discovery abuses were tolerated in the Fifth Circuit by and large. Cases were kneecapped out of the gate on the theory that money cases should settle and in the process bad faith claims handling was institutionalized under the law. Magistrate Gary Brown from the Eastern District of New York took a look at the case from a different angle and he came to a far different conclusion. Here is the salient verbiage:

The context remains important: according to the City of Long Beach, the losses here totaled approximately $205,000, while the testimony at trial suggested that the insurer has already paid out about $80,000. Pl’s Ex. 1. Thus, based on these rough figures, the most that could be at issue here amounted to approximately $125,000 and, based on the coverage limits of $250,000, no more than about $170,000 could be at stake. To a government-backed insurer, these are trifling figures, and in the world of federal cases, such figures are unimpressive, particularly when compared to the exorbitant costs of litigation. On the other hand, to individual homeowners, these are staggeringly large sums.

Before I present the 27 page Judicial beatdown of the National Flood Insurance Program and it’s lawyers over at Gerald Nielsen’s law firm, I’ll opine that what we have here is the tail wagging the dog. Magnum and his people over at Gauthier Houghtaling and Williams certainly expended a fortune to uncover the unsavory claims practices including the bullshit revised engineering reports insurers relied upon to deny coverage after Superstorm Sandy (and here on the coast after Hurricane Katrina) and they deserve props for the time, money and effort. Click the pic to nab the 27 page pdf:

In Re Hurricane Sandy (Raimey) 14-mc-41 Doc 655 In Re Hurricane Sandy (Raimey) 14-mc-41 Doc 655

4 thoughts on “Magnum scores a TKO in the War by the Shore! (Part 1)”

  1. A friend forwarded this opinion to me last week. After reading it, I just laughed at the thought of how incredibly inept and spineless much of the judiciary was in handling Katrina cases.

  2. The very last point about in the conclusion, about “all defendants” I find confusing. It seems to indicate that it implies to defendants beyond this one case (all defendants in Hurricane Sandy claims). If that is true, how does someone comply with a court order if they are not one of the parties? Is this a special court that can send out notices to all relevant parties?

    1. Down here each case filed against an insurer had its own case number. I think in New York they consolidated the litigation and are adjudicating the cases individually within the consolidated litigation. This case brings up matters involving compliance with the global case management orders thus the judge’s language.

      The is also salient because the claims practices in play here are said to be widespread. While the policyholder is generally prohibited from recovering attorney fees from the NFIP the people defending the NFIP have the US Treasury checkbook open to them so there is an incentive to litigate for the defense rather than simply pay the flood claims.

      1. Doug, in looking at the opinion, and seizing upon that particular language, I started disseminating it to other PI counsel still involved in flooding litigation to point out a potential fraud by defense attorneys in discovery.

        By the way, you might want to gear up the Jimbo Donelon the Klown watch again. Jimbo is shilling once more for the insurance industry, in an attempt to divert attention from the round of rate increases in the area for auto insurance, contending that insurers roll over and play dead in PI cases and pay out the max (on minimum insurance policies, of course, which is chickenshit money at the end of the day.) Jimbo was on WWL-Radio 870 AM (seems fitting, doesn’t it) on Nov. 19, 2014 doing his best towelboy act for Allsnake Insurance. Of course one can never tell if Jimbo ever takes a leave of absence from his taxpayer funded job to do his shilling for the insurers he allegedly regulates.

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