Category: Fonte-Flammer v Audubon

Update on the slabbing of State Farm Mutual – O’Keefe v State Farm

State Farm Fire attempts to paint Plaintiffs’ proposed, Amended Complaint as just another in a long line of virtually identical claims against State Farm Mutual held to be invalid by this Court.

Contrary to State Farm Fire’s argument, Plaintiffs’ Motion to Amend, and Plaintiffs’ proposed Amended Complaint are unique, and encompass claims and facts that were not before the Court in the matters referenced by State Farm Fire…

The claims Plaintiffs are attempting to assert against State Farm Mutual in this regard are virtually identical to claims the Mississippi Supreme Court recently found are valid under controlling law; and which the Mississippi Supreme Court found raise issues of fact which may not be decided as a matter of law when one insurance entity contracts away responsibilities under a policy of insurance sold in its name to another insurance entity. Fonte vs. Audubon Ins. Co., 2009 WL 468584, ¶¶ 10-11 (Miss. 2009).

O’Keefe’s argument seems solid in this Rebuttal to Opposition from State Farmon their filing an amended Complaint – and not just because of the strength added by Fonte. State Farm asserts “Plaintiffs have not alleged a single fact connecting State Farm Mutual to the adjustment of their State Farm Fire insurance claims.

O’Keefe counters Plaintiffs’ have asserted sufficient facts in support of their claims against State Farm Mutual to support a claim to relief under controlling Mississippi law that is plausible on its face.

Let’s look at what O’Keefe’s Rebuttal claims as examples of those sufficient facts, later referred to as undisputed facts. Continue reading “Update on the slabbing of State Farm Mutual – O’Keefe v State Farm”

Becky Mowbray Profiles Recent Policyholder Court Wins in the Times Picayune

And of course such a profile had to include extensive quotes from Rick Trahant who needs no introduction here at Slabbed and Soren Gisleson whom Nowdy has had the opportunity to chat with via email. Louisiana Insurance Commish Jim Donelon throws a wet blanket on the Ike theory but then again Rick isn’t on Mr. Donelon’s Christmas list in any event. Here is the profile:

After siding with insurance companies in early rulings after Hurricane Katrina, the 5th U.S. Circuit Court of Appeal has suddenly cranked out a stream of policyholder-friendly rulings in hurricane cases.

In recent weeks, the region’s federal appellate court has affirmed an award in favor of a homeowner, overturned a decision in favor of an insurer, said that homeowners can collect mental anguish damages when insurers don’t pay, and revived a whistle-blower lawsuit alleging that insurers ripped off the government in paying flood claims.

The apparent change of heart has left many giddy plaintiff attorneys wondering whether the Texas judges involved in the favorable decisions have been moved by the experience of Hurricane Ike slamming their home state.

“Now, going to work, they see all the damage a Category 1 windstorm did to downtown Houston,” Rick Trahant said. “I think, as people, they can’t help but to be affected by what they’ve seen in their own state in Texas.” Continue reading “Becky Mowbray Profiles Recent Policyholder Court Wins in the Times Picayune”

What a ballgame! Mississippi Supremes 9-0 for policyholder in first Katrina decision!

Congratulations to attorneys John Scialdone and Ryan Hahn of Balch Bingham’s Gulfport offices for taking  Fonte-Flammer v Audubon all the way!

The trial court erred in granting summary judgment where a genuine issue of material fact exists as to whether Audubon was an agent for a disclosed principal, MWUA. The trial court further erred in granting summary judgment by finding that Audubon exhibited no conduct which would allow the jury to determine that Audubon had committed gross negligence. Likewise, this case is not a “pocketbook dispute” but a liability dispute. Thus, for the reasons stated, the Harrison County Circuit Court’s final judgment is reversed, and this case is remanded to the Circuit Court for the First Judicial District of Harrison County for further proceedings consistent with this opinion.

The background on this case tells an all too familiar story – edited below in the interest of time and space.

On August 29,2005, the newly constructed home of Raul Fonte and Helen Flammer (the Fontes) was reduced to a slab as a result of Hurricane Katrina. This house was located on East Beach Boulevard in Pass Christian. The Fontes maintained three separate insurance policies on their home at the time Katrina struck: (I) a wind-and-hail policy through the Mississippi Windstorm Underwriting Association (MWUA); I (2) a federal flood policy; and (3) a homeowner’s policy written by State Farm Insurance Company. At the time the Fontes’ home was destroyed, Audubon Insurance Company (Audubon) was handling claims for MWUA…

Audubon contracted with independent adjusting firms, in this case FARA Catastrophe Services (FARA), to assist in the adjusting process…
FARA adjusters…investigated and adjusted the Fontes’ claim under their wind-and-hail policy. On February 4, 2006…[the]… final report,… concluded that only the second-story portion of the Fontes’ home was damaged by wind; and that the first floor of the property was destroyed by storm surge and thus was not covered under the Fontes’ wind-and-hail policy with MWUA. Shortly thereafter, AIG Claims Service, acting on Audubon’s behalf, sent a letter to the Fontes stating “payment is being made in the amount of$201,402.21, which is the damage determined to be caused by the peril ofwindstorm ([t]he only peril covered by your policy).”

On or about February 16,2006, payment was sentto the Fontes in the amount of$171 ,402.21 for windstorm damage to their home and carport and $30,000 for windstorm damage to the contents. The Fontes’ wind-and-hail policy had a coverage limit for the dwelling of $400,000
and $30,000 for personal property. The Fontes reteived the policy 1imitof$140,000 under their federal flood policy. The Fontes filed suit against State Farm Fire and Casualty Company,MWUA, Audubon, and Steve Saucier, who was the Fontes’ State Farm Insurance agent, alleging, ii1ter alia, that Saucier did not increase their policy limits as requested when their home went from a construction project to a completed dwelling. The Fontes further alleged that State Farm’s denial of coverage under the Fontes’ homeowners’ policy was arbitrary. After the Fontes filed suit, MWUA tendered the remaining limits of the Fontes’ policy, and the Fontes dismissed all claims against MWUA and Audubon for the recovery of policy limits.

However, the Fontes maintained their claim against Audubon for negligent  and arbitrary adjusting tactics, thus reserving their claims for litigation costs, attorney fees, and punitive damages…Audubon filed a motion for summary judgment denying any liability for its handling of the Fontes’ wind claim…The Fontes maintained that Jaywas given a mandate not to pay one hundred percent of any claims along U.S. Highway 90 in the Gulfport, Pascagoula, and Bay St. Lonis area. The corporate representative of Audubon stated during deposition testimony that if such a mandate was given, then it may have been arbitrary.

Following a hearing, the trial court entered an order granting summary judgment in favor of Audubon. From this order, the Fontes appeal to us.

Given the timely discussion of summary judgment, we’ll look there first. Continue reading “What a ballgame! Mississippi Supremes 9-0 for policyholder in first Katrina decision!”