Category: Sher Decision

Putting Kodrin v State Farm in perspective. Slabbed unifies the 5th Circuit decisions

I’ll start this post by publicly thanking Chip Merlin and Rick Trahant for their insight along with David Rossmiller. Rossmiller?? Has Sop lost his mind???? No, it was yesterday’s spirited exchange that I had with the guy, whom we affectionately call Rossie internally here at Slabbed that provided just enough intellectual stimulation for me to gain a greater insight into these cases and indeed unify that which is really happening in downtown New Orleans at the 5th Circuit Court of appeals. We need to begin with Rossie’s last blog entry which happened to be on Kodrin:

Kodrin is the ultimate in single causation questions: that’s all the jury heard, a dichotomy between the Kodrins’ claim that wind alone destroyed their house, and State Farm’s claim that flood alone destroyed their house. This may sound like a strange set-up to you, until you look at the facts of the case: the whole neighborhood was hit by Katrina flooding, which washed the rest of the houses off their foundations and kind of pooled them in one location. These homes, although severely damaged, were not utterly torn down and demolished. The Kodrins’ home, among all of them, was the only one obliterated…………

Now, this gives me some hope that this panel gets it when it comes to an understanding of the proper analysis to differentiate between single and multiple force damage: first determine what the loss is. The example used, flooded carpets and wind-damaged roof, was a fairly common scenario in Katrina damage, but it really doesn’t present any analytical problems, only problems of proof. The real test of understanding is the realization that the carpet itself, or the roof itself, could be damaged by two single forces that caused separate damage, one covered and one uncovered, and that this does not make them concurrent forces.

Although the court left standing the jury verdict on property damage, it vacated the award of punitive damages. The court said, in light of the evidence, there could be an honest dispute about what caused the damage to the Kodrinhome. Again here, I don’t know what happened with the flood payment, whether that was returned or not, or the precise circumstances under which it was applied for, paid and accepted, but the very fact of a flood payment creates an idea in my mind that there could be an honest belief that flood caused the damage.

Here’s what the court said about bad faith, when it exists and when it doesn’t:

State Farm declared that it determined flooding was the more likely cause of the damage to the home because (1) the Kodrins’ neighborhood was inundated when a levee was overtopped during Hurricane Katrina, (2) the Kodrins’ home was just one house away from that levee, and (3) many other houses in the area were lifted off their foundations and destroyed by the floodwaters. The Kodrinsthemselves acknowledged that their claimed wind damage to their home was unusual in their neighborhood, advancing that a tornado must have caused the damage as their speculation why their home was the only one in the area destroyed by wind, not flooding. On these facts, we perceive no probative evidence that State Farm acted in bad faith. State Farm’s refusal to pay was with reason, even if the jury ultimately rejected that reason. The Kodrinshave failed to prove otherwise; they essentially ask this court to find bad faithany time an insurer denies coverage and a jury disagrees. This would unduly pressure insurers to pay out claims that they have reason to believe lie outside the scope of coverage, solely to avoid penalties later. Such a rule would pervert the presumption that insurers act in good faithunless the insured proves bad faith, and this is foreclosed by Louisiana law.

I’ve left out the parts of his post where I thought the legal analysis was shoddy leaving our readers to decide that for themselves from reading the comments there. Rossie, for his part will learn from this post why the jury in Kodrin received single peril jury instructions. Our readers will learn why Kodrin attracted Rossie’s attention back in 2007 while other cases like Dickerson have never graced the pages of his blog AND HOPEFULLY lawyers who read us will gain a greater understanding of what is involved in proving bad faith on part of an insurer, in this case State Farm using standard Katrina slab case fact patterns.

We begin back in December 2007 Continue reading “Putting Kodrin v State Farm in perspective. Slabbed unifies the 5th Circuit decisions”

The Fifth Circuit Gets One Right: Dickerson v Lexington

After butchering the concept of the Anti Concurrent Clause in Leonard v Nationwide and the concept of punis in Broussard v State Farm, the third time was the charm with the Fifth Circuit in Dickerson v Lexington. A big slabbed congratulations to Soren Gisleson and the Dickerson family. I wonder if AIG will be paying this judgement out of the TARP fund LOL. Here is a link to the decision by the Fifth Cirucit.

This blurb sums up why all a good lawyer needs to litigate these cases is some wind damage, a good expert and in the case of the Farm the wind water protocol:

Dickerson’s bad faith claim hinges on the undisputed timing of Lexington’s first inspection and payment. Dickerson had reported the damage to the insured property in mid-September of 2005, and Lexington had sent an adjuster to inspect the damage on October 1, a month after Katrina. A report based on this inspection was sent to Lexington no later than November, yet no payment was made. Another report was sent to Lexington (apparently by the same claims adjuster) on February 4, 2006. Although Lexington representatives took the position that the second report corrected a “mistake” in the November report, we have found no explanation in the record for why Dickerson could not have been compensated in the interim. Indeed, Lexington’s attorney stated at trial that he had no explanation for the five-month delay. Continue reading “The Fifth Circuit Gets One Right: Dickerson v Lexington”

The “F” word hits the road – finds Wall is dead end Street (Part 1 of 3)

It’s a long and winding road from Katrina to Wall Street; but, that’s where the F’word is going- so gas up as we follow using this FEMA map of landmarks:

  • Part 1: Friend of the Fifth Circuit’s Opinion in the consolidated Katrina Canal Levee Breech?
  • Part 2: Final statistically unreliable report- Hurricane Katrina: Wind Versus Flood Issue.
  • Part 3: Financial Crisis: Wall Street dead end for disaster protection.
Friend of the Fifth Circuit’s Opinion in the consolidated Katrina Canal Levee Breech?

Every f’n road trip has to have a place to start.  This one starts with the recent change in policy language reported in this post on SLABBED – with the Fifth’s decision on the appeal of the consolidated Katrina Canal Levee Breach litigation in the rear view mirror. Continue reading “The “F” word hits the road – finds Wall is dead end Street (Part 1 of 3)”

The "F" word hits the road – finds Wall is dead end Street (Part 1 of 3)

It’s a long and winding road from Katrina to Wall Street; but, that’s where the F’word is going- so gas up as we follow using this FEMA map of landmarks:

  • Part 1: Friend of the Fifth Circuit’s Opinion in the consolidated Katrina Canal Levee Breech?
  • Part 2: Final statistically unreliable report- Hurricane Katrina: Wind Versus Flood Issue.
  • Part 3: Financial Crisis: Wall Street dead end for disaster protection.
Friend of the Fifth Circuit’s Opinion in the consolidated Katrina Canal Levee Breech?

Every f’n road trip has to have a place to start.  This one starts with the recent change in policy language reported in this post on SLABBED – with the Fifth’s decision on the appeal of the consolidated Katrina Canal Levee Breach litigation in the rear view mirror. Continue reading “The "F" word hits the road – finds Wall is dead end Street (Part 1 of 3)”

Federal court in NOLA rules against State Farm on claim of mental anguish

First the story; then the background in Louisiana law where you see familiar names such as Weiss and Sher.

Peter and Sandra Perrien own a home located at 426 Moonraker Drive in Slidell, Louisiana. The home sustained significant damage as a result of Hurricane Katrina. At the time of Hurricane Katrina, State Farm entities provided the flood insurance and the homeowner’s insurance on the Perriens’ property.

Following the hurricane, plaintiffs filed claims with State Farm under both the homeowner’s policy and the flood policy. State Farm paid plaintiffs the dwelling and contents limits under the flood policy and paid plaintiffs approximately $9,000.00 for damage to the roof and approximately $11,000 in additional living expenses under the homeowner’s policy. State Farm denied the remainder of plaintiffs’ claim under the homeowner’s policy on the basis that the other damage had resulted from flood, an excluded peril under the homeowner’s policy.

Thereafter plaintiffs filed suit against State Farm seeking to recover, the policy limits under their homeowner’s policy as well as damages for “[p]ast, present and future mental anguish and distress.” (Doc. 1-4, p.5).

State Farm filed a motion for partial summary judgment seeking the dismissal of plaintiffs’ claims for mental anguish and distress.

Now, here’s where it gets a little tricky for our friends in Louisiana – state law there applies to mental anquish and no doubt has caused much of same for those slabbed by Katrina, Rita or the levee. Continue reading “Federal court in NOLA rules against State Farm on claim of mental anguish”

Sher went back to the levee – still came up dry but will Corps get by?

I’m going to take the easy way out and post the Sher update from this comment on the ALL Board.

The Louisiana Supreme Court refused Tuesday to reconsider its recent ruling that an insurance company isn’t liable for water damage from the failure of levees in Hurricane Katrina’s aftermath.

The court ruled in April that Lafayette Insurance Co. isn’t obligated to pay policyholder Joseph Sher, the owner of a New Orleans apartment complex, for water damage from levee breaches after the August 2005 hurricane.

Sher’s lawyers asked the court for a rehearing on that issue, but the justices rejected their request Tuesday without giving an explanation.

“It’s over now,” said attorney Howard Kaplan, who represents Lafayette. “It puts the flood issue to an end.”

Last year, a state appeals court ruled that Lafayette’s homeowner policy failed to exclude all forms of flooding because its language was ambiguous. The Supreme Court disagreed, however, and said Lafayette is entitled to limit its liability for damage from a levee breach.

Our friends at the Ladder have been on top of levee stories and had this report on a new attempt to hold the Corps accountable – along with some interesting history. Continue reading “Sher went back to the levee – still came up dry but will Corps get by?”

LA Supremes drive their “chevy to the levee” – Sher comes up dry (Updated)

In deciding Sher – the suit filed by 92-year-old Holocaust survivor Joseph Sher – the Louisiana Supreme Court relied on Webster to determine the cause of property damage when the levees failed following Hurricane Katrina. Unfortunately for Sher, it was Noah the lexicographer and not Daniel, the great compromiser.

“Contrary to the court of appeal’s reasoning, this definition (of flood) does not change or depend on whether the event is a natural disaster or a man-made one — in either case, a large amount of water covers an area that is usually dry,” the court opinion said.

The Times-Picayune reported the more about the decision released today in the full story.

The Louisiana Supreme Court today dealt a final blow to the argument that homeowners insurance policies should have covered the damages caused by levee breaches during Hurricane Katrina, saying the disaster was clearly a “flood” that’s excluded from coverage. Continue reading “LA Supremes drive their “chevy to the levee” – Sher comes up dry (Updated)”