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”

Drake v Nationwide goes another emotionally distressing round

The high water level or storm surge of a hurricane and specifically Hurricane Katrina is generally misunderstood by the general public. Most people think that the storm surge is a virtual wall of sea water that suddenly comes ashore as the hurricane makes landfall.

While this may be true to some extent at the actual center of the eyewall of a hurricane as it makes landfall, it is not true for the storm surge or high water away from the center of the storm. Rather, the rising of the storm surge or high water is a gradual occurrence as you get further from the center -of the storm, even in the most intense winds of the northeast quadrant of the hurricane.

I have interviewed two eyewitnesses to the Hurricane Katrina high water occurrence, and they each tell very similar accounts. A third eye witness on lovers lane in Ocean Springs reportedly tells a similar account. The witnesses state that the water rose gradually, first in the edge of their yards, then by progression up to the steps of their house and finally up on the sides of the house to the highest water level.

The witnesses state that the high water stayed at the highest level for a short period of about 30 minutes and then receded in the same gradual manner as the water rose. The witnesses who gave these accounts were located in Pascagoula near the water; at D’Iberville on the Back Bay of Biloxi; and on the waterside of Lovers Lane in Ocean Springs. (emphasis added)

With Ted Biddy’s February 9, 2006 forensic analysis of the loss documenting wind speed and water level across the Coast , it is difficult to believe Nationwide let the Drake’s claim for ALE reach the point of litigation.  The State’s windpool and the Federal flood program picked up the tab for the slab; and, all that was left for Nationwide to pay was approximately 1/10th of the total loss.

Nonetheless, four years after Katrina left the Drake’s with a slab, Nationwide is Continue reading “Drake v Nationwide goes another emotionally distressing round”

…and a dim bulb flickered in Texas over at TWIA

While Commission Chaney had all the bright lights of insurance and finance shinning in Mississippi, a dim bulb flickered in the Texas Windstorm Insurance Association (TWIA), according to Texas’ oldest newspaper, the Galveston County Daily News:  h/t  always thoughtful reader

The Texas Windstorm Insurance Association wants a judge to give it immunity against paying attorneys’ fees, penalties, interests and other expenses beyond actual damages in litigation claiming it acted in bad faith or maliciously in dealings with policyholders.

In Bakht Khattak vs. Texas Windstorm Insurance Association, the insurer is seeking sovereign immunity, which means it can’t be sued without its consent.

If Judge Susan Criss of the 212th District Court in Galveston grants sovereign immunity in that case, her decision could apply to any lawsuit filed against the insurer since Hurricane Ike, which struck in September with 110 mph winds and devastating storm surge.

About all that can be said for this TWIA flicker is that it would require a lot less time and money than hiring lawyers to sneak around and get all the evidence against you classified a “trade secret”.

The windstorm association isn’t seeking dismissal of the lawsuit or others like it, officials said….

What the association’s attorneys at a Monday hearing asked Continue reading “…and a dim bulb flickered in Texas over at TWIA”

SLABBED Daily – July 10 (keeping score #2)

Yesterday was a big day for Nationwide litigation.  Take a look at what settled!

O’Bannon et al v. Nationwide Mutual Fire Insurance Company et al closed 07/09/09

Hartman v. Nationwide Mutual Fire Insurance Company et al  closed 07/09/09

Williams et al v. Nationwide Mutual Insurance Company et al  closed 07/09/09

You’d think if they settled O’Bannon…oh, well, maybe Nationwide just wants to let the jury write Mrs. Politz check.

Yesterday was a busy day, but not a big day, for State Farm.  TEXT ONLY orders were issued yesterday in two of the State Farm cases SLABBED is following: Continue reading “SLABBED Daily – July 10 (keeping score #2)”

Merlin: Insurance industry is using the “letter of the contract” to defeat the promise they sell

Here are two new posts on Merlin’s blog that are a great fit with Sop’s View from the trenches on the disconnect at the National Underwriter –Leading Insurance Academic Proves State Farm Accepts “Reasonable Expectations” of Insurance Coverage and Insurance Advertisements Stress an Expectation of Coverage and Service.

Both posts go to the heart of every Katrina case – the “illusory coverage” policyholders found they were sold and told would cover loss from a hurricane.

The first, Merlin wrote this past Tuesday:

Professor Jeffrey Stempel is among the best legal writers of matters pertaining to insurance. When reading his work, I often think “why can’t I explain my thoughts so clearly and eloquently?” Maybe that is why he is the insurance law professor, and I am in the middle of legal muck and controversies.

While following up on Saturday’s Post, “Fireworks are Loved by Americans–and Insurance Companies Seeking Not to Pay Fourth of July Fires,” where I quoted Barry Zalma at length for the proposition that insurance companies often advertise one product but sell another, I came across a related article on the LexisNexis Insurance Law Center written by Stempel. His article, March Madness Makes It “Official: State Farm Embraces the Reasonable Expectations Doctrine and Rejects Linguistic Literalism, is a must read for those trying to prove that even the industry leader recognizes what it advertises is not what it sells. This is the point I was trying to make in my post, “Is the State Farm Policy Really Worth Anything?

I felt the following paragraphs best sum up Stempel’s points: Continue reading “Merlin: Insurance industry is using the “letter of the contract” to defeat the promise they sell”

Fortify Your Castle Part Deux: The Mississippi Windpool finally recognizes the building code.

Three and a half years in the making, policyholders that build in communities with the latest building codes will receive a discount. Homeowners who retrofit their houses will also get a discount. Anita Lee has the story from a bit over a week ago:

Changes coming July 1 to the state wind pool will reward communities that have adopted and are enforcing stronger building codes.

The wind pool will offer discounts to businesses and homeowners with structures built to stronger standards.

Wind pool board member Dave Treutel of Bay St. Louis said the South Mississippi insurer of last resort also will for the first time offer residents alternate-living-arrangements reimbursement when a mandatory evacuation has been declared. In addition, he said, policies will be easier to read.

Residents who live in homes built before stronger standards were adopted can receive discounts on premiums by retrofitting their homes. Those discounts will range from 12 to 30 percent.

“We’re recognizing those, and crediting those who have done well,” Treutel said, “not beating those who haven’t. But in reality, communities that haven’t had strong codes will not do as well.” Continue reading “Fortify Your Castle Part Deux: The Mississippi Windpool finally recognizes the building code.”

Oh, say can you see Ike’s wind came before the sea (edited)

Anyone who still doesn’t believe hurricane surge washes away what the wind destroys need look no further Galveston Island’s Beachtown after Hurricane Ike for evidence.

"After Ike" photograph of home in Galveston Island's Beachtown
"After Ike" photograph of home in Galveston Island's Beachtown

Hurricane Ike hit Galveston Island in the early morning hours of September 13th, 2008. The sheer size of the hurricane impacted a majority of the Texas Gulf Coast, in addition to the SW Gulf Coast of Louisiana.

At the East End of Galveston Island, the hurricane delivered its fiercest winds as well as a storm surge not experienced since the devastating hurricane of 1900. Beachtown found itself in the unenviable position of receiving the dirty side of the hurricane and Ike’s relentless punches delivered from the Northeast…

Galveston Island was inundated with hurricane debris, including boats lying in the streets and esplanades….a devastating blow to Galveston Island. There were clear signs of Ike’s presence at Beachtown, as many of the streets and lawns were covered by a layer of sand brought by the storm surge.

However,most compelling was the condition in which the residences and other structures lay… largely unscathed. Signs of hurricane Ike’s impact were limited to the breakaway sections of the structures. The buildings’ structures performed outstandingly. The habitable floors remained undamaged despite the horrific forces of Ike.

FEMA and the City of Galveston require the enclosed portion of structures located below Base Flood Elevation (as is the case for coastal communities and beachfront homes) be designed to break-away with the impact of a hurricane force, leaving the main structure intact. Ground Floor breakaway materials, such as louver panel assemblies and garage doors, separated as designed.

Continue reading “Oh, say can you see Ike’s wind came before the sea (edited)”

Same circus, new act – still playing in Federal Court

The jury for the  Windpool circus taking place in federal court in Hattiesburg,  Association Casualty Ins. Co., et. al. v. Allstate Ins. Co., et. al saw a new act today.  sf-windpool-3

The lawsuit against the Windpool Board was filed in September 2006 – and today State Farm suddenly remembered it wasn’t on the Windpool Board after all!  Imagine that!

John Corlew must be trying one hell of a case for State Farm to start calling, “George!” and filing a Motion for Judgment as a Matter of Law with supporting Memorandum.

As set forth more fully in the accompanying brief, the facts and inferences pointso strongly and overwhelmingly in favor of State Farm that no reasonable juror could conclude that State Farm was a member of the MWUA Board of Directors.

Because State Farm was not a member of the MWUA Board during the relevant time period, State Farm, as a matter of law, cannot be held directly liable for the Plaintiffs’ claims. Continue reading “Same circus, new act – still playing in Federal Court”

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!”

Katrina insurance litigation – selected Nationwide and State Farm cases

Early in the month I began a somewhat regular “sweep” of Katrina insurance cases in the federal court with new docket entries.    In a single day recently, docket entries were made on approximately 75 different cases.  It would be impossible to estimate exactly how many different cases had one or more docket entry during the month of February; but, I’m willing to guess hundreds.

Obviously, someone has to read every one of those new documents.  I’m not the one.  In this short and busy month, it has been difficult at times  to “sweep” my kitchen, much less the case files – so much so, in fact, this could be called a “lick and a promise” post about cases that caught my eye.

Nationwide, you may recall, is the carrier that prompted Judge Senter’s memorable “illusionary coverage” remark.  At this point, it appears the “illusion” morphed into a  “delusion” with Nationwide thinking he would eventually see things their way.  While he has been “on their side” at times, I’ve seen Judge Senter issue an order in several Nationwide cases that I don’t recall seeing elsewhere.  Consequently, I’ve also seen another first, Notice of Private Mediation:

Pursuant to the Court’s January 12, 2009 Order for Mediation, counsel for Defendants Nationwide Mutual Fire Insurance Company, Ntionwide Mutual Insurance Company, and Nationwide Property and Casualty Insurance Company, on behalf of both parties, hereby advises the Court that the parties will hold a private mediation on or before March 19, 2009, in lieu of participating in the Court-supervised mediation program.

Since I don’t want to commit the logical fallacy of suggesting correlation proves causation, I will simply point out I noted a number of Nationwide cases were settled this week.

However, other Nationwide cases I pulled do not appear to be moving in that direction.  Politz v Nationwide , for example, is a dispute about the plaintiff’s private coverage with Nationwide – although you might think  otherwise.  Nationwide focused on NFIP and other disaster assistance the Politz received and did so in a way that its conduct appears contrary to the NFIP Litigation Philosophy: Continue reading “Katrina insurance litigation – selected Nationwide and State Farm cases”