Ahoy WYO Fiduciary, Icy Waters of NFIP Lie Ahead!

Katrina through the eyes of State Farm: a now familiar story that begins in Bloomington, in a boardroom, awaiting an angry sea. August 29, a third of Mississippi is nuked. In comes a headline-starved lawyer, well healed and ready to “save the people.” State Farm repairs to Birmingham, a Roveside rat’s nest. Alas, the 4 year odyssey begins.

In the meander of this cyclonic tragedy, countless homes, lives, reputations and chattel are ravaged like the spoils of war. A senior federal judge, bent on political revenge, soils the bench he occupies. Two “factory” girls of the Cat adjusting world, forthright and honest-to-a-fault, are savaged by a $56 billion racketeering monopoly and its Hessian body broker. Associated hard-driving plaintiff lawyers, indispensible lifelines to thousands of victims, are systematically slandered by thug corporate lawyers, and then, through no fault of their own, thoughtlessly disqualified by a rudderless federal court. Behind the scenes, lifer law clerks – insidious martinets of the inner sanctum – work the ex parte back channels for ways to advance their impish political agendas. A 30 year pimp politician is stripped bare and lampooned, a righteous comeuppance for the thousands of lives he’s ruined. A neophyte lawyer-journalist who wouldn’t know a hurricane loss if it bit his private parts off, shills and cons his way into the affray, and trafficking on scandal, emerges as a self-ordained insurance expert.

Four (4) years of rampant fraud, $13 million a day in falsely settled claims, without so much as a single uptick on the legal side. Think of the money spent, the millions wasted, the dreadnought trial schedules, as if the whole thing were an interminable English parlor game. Motions, replies, briefs, extensions, sanctimonious trials, an endless procession of mindless bureaucracy, saddling already helpless people with cost in the hundreds of thousands, all just to get a contract debt paid. Unable to deliver even basic service, the court outsources, dumping bereft insureds in the laps of purchased mediator-lawyers, eager to stay in good with their fee paying, corporate check writers. Judged for fidelity of service and “get-er-done” efficiency, the legal system is an antideluvian disaster, a deus ex machina, lacking rope and hoist. Continue reading “Ahoy WYO Fiduciary, Icy Waters of NFIP Lie Ahead!”

Judge Senter applies Corban, issues trio of Orders in Bossier v State Farm

Attention now turns to several dispositive motions filed by Plaintiff concerning [77] the issue of the anti-concurrent cause clause in the subject insurance policy; [79] the issue of windstorm; [82] the dwelling extension coverage; and [83] “accidental direct physical loss” suffered by Plaintiff.

At the time these motions were filed, some of the issues were the subjects of an appeal to the Mississippi Supreme Court, Corban v. United Services Automobile Assoc…; the Supreme Court issued an opinion on October 8, 2009, and rejected the principal conclusions reached by the United States Court of Appeals of the Fifth Circuit in Tuepker v. State Farm Fire & Casualty Co…and Leonard v. Nationwide Mutual Insurance Co… However, that does not mean that Plaintiff is entitled to the requested relief.

In addressing Bossier’s dispositive motions, one of the three Orders he issued in Bossier v State Farm last Friday, Judge Senter enters the conversation on the impact Corban will have on the remaining policyholder claims in litigation.

While the Mississippi Supreme Court did not agree with the Fifth Circuit’s interpretation of the anti-concurrent cause clause found in homeowner insurance policies, especially with respect to the “in any sequence” portion of the provision, the decision did not change the essence of this Court’s approach regarding the meaning and–for practical purposes–inapplicability of the anti-concurrent language.

The Mississippi Supreme Court expressly adopted this Court’s analysis in Dickinson v. Nationwide Mutual Fire Insurance Co…Now that the Mississippi Supreme Court has issued its decision, this Court sees no reason to delay trial, for the intention to follow Dickinson and the interpretation of the anti-concurrent cause language has been consistently clear and has merely been affirmed by Corban.

The Mississippi Supreme Court did not go as far as Continue reading “Judge Senter applies Corban, issues trio of Orders in Bossier v State Farm”

Corban v. USAA

CORBAN v. USAA – THE 1500 DAY GREEK TRAGEDY

Pardon the obvious patronage, but it’s fitting that Slabbed pay homage to the dedicated lawyers and astute circuit judge who were involved in Corban’s journey to the Mississippi Supreme Court. FOR THE PLAINTIFF: Judy Guice; Clyde Gunn; Richard Phillips; Christopher Van Cleave; Neil Harris; William Corban Gunn. THE CIRCUIT COURT OF HARRISON COUNTY: Honorable Lisa Dodson.

Yesterday, October 8, 2009 – exactly one thousand five hundred (1,500) days after Katrina – the Supreme Court unanimously ruled that the Harrison County Circuit Court erred in applying the Fifth Circuit’s interpretation of an ACC clause.  First, when I say “erred,” that doesn’t mean the Judge botched it. She didn’t. As a matter of fact this particular Judge, Lisa Dodson, did exactly what a judge is supposed to do in this situation – defer. Asked to rule on competing summary judgment motions, Judge Dodson was forced to chose between the devil – in this case 5th Circuit Judge Edith Jones – and the deep blue sea – our own Supreme Court. She did the right thing, though it meant walking with the devil a while. More on “Dodson’s dilemma” below.

First, let’s de-bone Corban. The decision says the ACC clause cannot be used to defeat a wind loss, unless the insurer, by a preponderance of the evidence, first proves that wind and water acted indivisibly, and “contemporaneously converged” in causing the loss. Second, the Court trashed the “in any sequence” language in the ACC, finding it “ambiguous.” So, post Corban, “Mississippi Insurance Law for Dummies” might read something like this: “in Mississippi, the ISO-type ACC clause does not apply to all-risk policy losses, and can’t be legitimately invoked, except in one rare instance: when the loss was caused by the indivisible forces of wind and water, and the insurer can prove it.” In a word, Corban says “you get the loss you bought.” But, as astute Bam Bam readers will see, there’s still a problem.

The heart and soul of Corban is on page 22 of the opinion: “The ACC clause applies only if and when covered and excluded perils contemporaneously converge, operating in conjunction, to cause damage resulting in loss to the insured property.” See the problem yet? Let me re-write the quoted part putting “wind” and “water” where they belong:

“The ACC clause applies only if and when [wind] and [water] perils contemporaneously converge, operating in conjunction, to cause damage resulting in loss to the insured property.” Continue reading “Corban v. USAA”

Reaction to Corban Ripple Across the Media

Anita Lee’s story on Corban is here with commentary from head III shill Robert Hartwig himself (picture found here). The bottom line per Judy Guice:

“To me, this was always much more than just a business issue. This was a personal issue to me. Getting the law straight was really one of the critical parts of my recovery and I’m relieved that has now happened.

“The overwhelming feeling I have right now is relief that our children and grandchildren, and everybody else who had to suffer like we’ve all suffered since Hurricane Katrina, will not be stuck with the harsh law, the incorrect law that was previously created and has now been corrected by our Mississippi Supreme Court.”

Chip Merlin has written a series of 3 posts on Corban which address all the fine points of the decision. This is from Part 2:

This ruling confirms State Farm’s Wind/Water Protocol is the wrong test under Mississippi law because it improperly shifted the burden upon the policyholder to prove that the wind caused the damage rather than the insurer having to prove that the damage was excluded. Corban undermines the Fifth Circuit reversal of Judge Senter in Broussard vs. State Farm and as I suggested in Broussard’s Bad Faith Decision Impaired by the Mississippi Supreme Court.

There is one important mistake the Court did make in its decision when it held: Continue reading “Reaction to Corban Ripple Across the Media”

State Farm puts the Court to the test in Bossier – files nine motions in limine UPDATED

Defendants mistakenly believe that just because evidence is prejudicial it is not admissible. Not so. All relevant evidence is necessarily prejudicial.

Are we going to see yet another case gutted before trial? Obviously,  State Farm would like nothing better.  The Company filed nine motions in limine on the last day of September with trial set for little more than a month away.

Taken in the order of just how offensive the motions are to the public interest, SLABBED examines the nine starting with #7: to Preclude Testimony or Evidence Relating to Interpretation of Insurance Policy Provisions or Principles of Mississippi Law and to Exclude the Wind Water Claim Handing Protocol.

State Farm anticipates that Plaintiff may attempt to introduce testimony and/or evidence regarding a State Farm document known as the Wind Water Claim Handling Protocol… That document, however, should not be used for any purpose during the trial of Plaintiff’s claims. First, the document should not be used during the coverage phase of trial because how an adjuster investigates a claim has no bearing on what damage wind or flood caused to Plaintiff’s property or on whether those damages qualify for coverage under the plain terms of the homeowners policy.

Second, the document is also inadmissible during the later phase of trial (if any) involving claims for extra-contractual and punitive damages because (1) introducing the protocol would inject unfair prejudice against State Farm and needlessly confuse the jury by introducing a purported investigatory process alongside the controlling Mississippi investigatory standard beyond the abilityof any instruction by the Court to cure and (2) the document does not evidence bad faith or other culpable conduct. (Emphasis added – and doubled)

The following excerpt from the November 1, 2006 deposition of Stephan Hinkle, principal developer of the Protocol, provides just one of the many reasons the Court should carefully consider this motion. Continue reading “State Farm puts the Court to the test in Bossier – files nine motions in limine UPDATED”

The GAO does some more cussin’ and discussin’ on the National Flood Insurance Program

When I began blogging to what would become Slabbed my knowledge of complex finance was exceeded only by my ignorance of how the political process really worked.  What I found from my perch here in Soggy Bottom is that talking aka cussin’ and discussin’ dominates the process. And besides all the talking that goes on inside the beltway there is a mirror conversation that happens on the outside, in places like Yahoo Allstate finance message board and in Sheila Brinbaum speeches where alternate realities are peddled out of economic self interest.

Beyond the shilling however the Government Accountability Office has been looking at the NFIP and their findings tell the real story, of a program abused by private for profit insurers with no oversight on part of FEMA. For instance in September 2007 the GAO found:

FEMA’s payments to WYO insurance companies for operating costs ranged from more than a third to almost two-thirds of the total premiums paid by policyholders to the NFIP for fiscal years 2004 through 2006……

The approach FEMA uses to determine operating costs for WYO insurance companies, rooted in policies negotiated and established about 25 years ago, cannot ensure that payments are based on reasonable estimates of actual expenses because actual expenses incurred by the companies for their services to the NFIP are not considered. Although it has authority to do so, FEMA does not collect data on actual WYO flood insurance expenses that could provide a basis for insuring that the WYO payments are based on a reasonable estimate of actual expenses.

Fast forward to December 2007 and another GAO report which found FEMA asleep at the switch and a program structures to create “an inherent conflict of interest”:

Insurance coverage gaps and claims uncertainties can arise when coverage for hurricane damage is divided among multiple insurance policies. Coverage for hurricanes generally requires more than one policy because private homeowners policies generally exclude flood damage. But the extent of coverage under each policy depends on the cause of the damages, as determined through the claims adjustment process and the policy terms that cover a particular type of damage. This process is further complicated when the damaged property is subjected to a combination of high winds and flooding and evidence at the damage scene is limited. Other claims concerns can arise on such properties when the same insurer serves as both NFIP’s write-your-own (WYO) insurer and the property-casualty (wind) insurer. In such cases, the same company is responsible for determining damages and losses to itself and to NFIP, creating an inherent conflict of interest.

And the GAO continued looking at the program most recently with the issuance of this report dated last month. The professionals at GAO continue to find a program operated with little oversight and no internal controls: Continue reading “The GAO does some more cussin’ and discussin’ on the National Flood Insurance Program”

How hot is the hot spot for Rigsby qui tam?

Really hot – and much larger than the hot spot identified here and here – if Derek Wyatt’s 30(b)(6) deposition of Stephan Hinkle in Pontius v State Farm is considered:

FireShot capture #024 - 'Popps Ferry Rd, Biloxi, Harrison, Mississippi to 1982 Bayside Dr, Biloxi, MS 39532 - 2
Area identified in quoted text from 30(b)(6) deposition of Stephan Hinkle (A - C) shown with location of McIntosh (D) and Bossier property (E)

I actually was in Biloxi when I wrote…[the Wind-Water Protocol]… And I had done — Iwent out and saw the damage, basically, and saw the — well, the first area I went to when I was there was right near this claim office on Pops Ferry Road in Biloxi (Location A). There’s this development called Destiny Plantation. (Location C) It’s right on the back bay of Biloxi. And I had occasion to drive down there. And I — there, I comprehended the nature of the damage, is what made me kind of outline in my mind how to do this.

But the gate to Destiny Plantation is on Brody Road (Location B), which is about a half a mile inland from the shore. You go in the gate and there was no damage whatsoever to the homes immediately  around the gate. You take the road south toward the bay, and immediately you notice where the water stopped. And by the time you get down to the bay itself, the homes that were built were totally destroyed. They were slab homes. Which indicated to me that we’ve got a situation here.

How many other hot spots were there given the estimated number of  State Farm policyholders with dual coverage Hinkle provided applied to the flooded areas of all three coastal counties and not just this one area in Biloxi?

BY MR. WYATT:

Q. Okay. Before I get too far afield, I want to remember where we started, but you mentioned something yesterday. Mississippi had about 80,000 P&C Katrina claims. Continue reading “How hot is the hot spot for Rigsby qui tam?”