Henry and June plus Lewis and Scot: An Appraisal Story and Kuehn Update Prequel

I’ve kept fairly quiet since late April on Kuehn v State Farm, a case with a little something for everyone. We have the appraisal clause and State Farm ignoring it. We have a typical State Farm hired gun lawyer in Scot Spragins of Oxford Mississippi and the spectacle of Scot beclowing himself before an audience of political leaders, fellow lawyers and academics across the country as we profile his unethical behavior and abuses of the court system.

The Farm doesn’t break in litigation nor follow their contractual obligations easily and though I’ve been relatively absent here on the blog I’ve been loading up for bear on the concept of appraisal and how State Farm’s treatment of their own contract language in this case illustrates their bad behavior better than most. But before I post a comprehensive update I’d like to point out that just like Rossie’s New Appleman piece on Anti Concurrent Causation is the legal standard on the ACCs meaning and application, the book, The Law and Procedure of Insurance Appraisal by Jonathan J Wilkofsky Continue reading “Henry and June plus Lewis and Scot: An Appraisal Story and Kuehn Update Prequel”

A Kuehn Prequel Courtesy of Anita Lee at the Sun Herald

To give our readers a look back at Kuehn and how State Farm made up the rules as they went along in how they adjusted claims after Katrina lets visit with Anita Lee and a story she wrote back in May of 2006 on the Kuehns battle to get State Farm to honor their own policy provisions. An interesting sideline is the fact the Farm used George Dale and his screwed up mediation program as the reason to deny a valid policy provision. The article still exists on the internet courtesy of CorpWatch:

State Farm Fire and Casualty Co. refuses to engage in the appraisal process to resolve Hurricane Katrina claims, even though its own policy mandates appraisal on demand when the amount of an insured loss is in dispute.

Instead, records show, the company is urging policyholders to settle disputes through a mediation program sponsored by the Mississippi Department of Insurance and funded by insurers.

Two attorneys, one who was personally denied appraisal and another whose clients have been turned down, think they know why.

“State Farm is just plundering and victimizing its policyholders in the mediation process,” said Ocean Springs attorney Earl Denham. “That’s why they’re doing this. If you get in the appraisal process, they’re not going to be able to do that because somebody else makes the decision.”

Denham represents Henry and June Kuehn of Ocean Springs, who asked State Farm about appraisal after the company offered them only $10,765.48, minus depreciation and deductible, to cover the wind damage to their waterfront home.

A woman who identified herself as Tina, in a State Farm catastrophe office, told Kuehn in a conversation he taped April 17: “That’s what our management is saying. We’re not offering appraisal at all because mediation overrides it.” Continue reading “A Kuehn Prequel Courtesy of Anita Lee at the Sun Herald”

A bit more on the Appraisal Clause NFIP style as Edith Jones strikes again: Dwyer v Fidelity National Part 1

We’ve seen some brain dead decisions out of Edith Jones at the 5th Circuit. Some thought her infantilized analysis of anti-concurrent causation in Leonard could not be beat for setting new lows in judicial ignorance but Dwyer v Fidelity National might give Leonard a run for it’s money. We’ve been sitting on this case for several weeks now trying to find a way to fit it in. With State Farm’s counsels outrageous behavior in Kuehn v State Farm as our foil we’ll find how insurers are using appraisal at the court house steps as a way of dragging out litigation. In Dwyer we’ll also  find some old fashioned wind-water ambiguity and how the NFIP, Fidelity and it’s lawyers successfully exploited it before insurer friendly 5th Circuit Judge Edith Jones.  Let’s start with a short synopysis of the case courtesy of the 5th Circuit Court of Appeals:

The Dwyers purchased an SFIP (Standard Flood Insurance Policy) from Fidelity to protect their home in Slidell, Louisiana, obtaining $250,000 coverage for the building and $100,000 for its contents. Hurricane Katrina’s wind and flood buffeted the home in August 2005. Following inspection by an independent adjuster, Fidelity paid the policy limit for contents and $86,6291 for flooding-related building damages.

The Dwyers seem very responsible homeowners buying both the maximum amount of flood insurance allowed by law as well as wind insurance. Fidelity National, the nation’s largest WYO “Write Your Own” (Government backed Flood insurance) carrier wrote the NFIP coverage while Travelers underwrote the Dwyers wind coverage. As we’ll see this case is somewhat strange and includes the intersting undercurrent in that Dave Maurstad’s expedited claims procedures were evidently not followed in terms of the blanket tender of the flood policy, perhaps because the inherent conflict of interest involved when the WYO carrier also underwrites wind coverage was not present in this case as the Dwyers used a dedicated NFIP WYO underwriter to handle their coverage and thus their adjustment. (Rebecca Mowbray’s coverage of the linked GAO report can be found here.)

On February 21, 2006, Dwyersent a certified letter to both Fidelity and Traveler’s Insurance Company (“Traveler’s”), whose homeowner’s insurance policy on the Dwyer dwelling covers wind damage. The letter stated that a contractor’s estimate to repair the house was roughly $100,000 more than the combined amounts paid by Fidelity and Traveler’s. Dwyer wrote that neither he nor the contractor could accurately distinguish between wind and flood damage, so Dwyer recommended each company pay the additional expenses in proportion to the amount it had already paid. Based on this calculation, he requested an additional $85,471.89 from Fidelity.

We get a hint Ms Jones marches to the beat of a different insurance law drummer to the point of judicial activism preferring to ignore literally hundreds of years of case law as the case synopsis concludes: Continue reading “A bit more on the Appraisal Clause NFIP style as Edith Jones strikes again: Dwyer v Fidelity National Part 1”