Mississippi Law Journal publishes “…Rendered far too late” – Chip Merlin on Corban v USAA

To understand the significance of the Mississippi Supreme Court’s decision in Corban v. USAA, it is necessary to consider the financial devastation and unnecessary insurance coverage litigation caused by the absence of it during the four years from the date Hurricane Katrina hit Mississippi’s gulf coast.

Merlin’s lead grabbed my attention as did his page one footnote referencing SLABBED:

The obliterated structures have been termed by those in Mississippi’s gulf coast “slabbed,” as there was literally nothing but a slab left where homes and businesses once stood. Slabbed is also the name of a blog that has chronicled the reconstruction efforts and struggles with the insurance industry along the way. For more on this topic and stories behind the Katrina litigation, see http://www.slabbed.org.

Since Merlin’s blog provides what he calls the “Reader’s Digest version” of his article for the Mississippi Law Journal, SLABBED moves from his lead to the references to Bossier v State Farm and Robohm v State Farm in his Conclusion: (emphasis added)

While the Corban decision made it clear that insurers cannot use the ACC and wind/water protocol to evade their burdens under an all-risk policy, State Farm’s trial motions show that it is still using both to deny claims. One month after Corban was released, State Farm tried to shirk its obligations with a tortured interpretation of Continue reading “Mississippi Law Journal publishes “…Rendered far too late” – Chip Merlin on Corban v USAA”

Breaking News – Bossier v State Farm fully and finally settled

TEXT ONLY ORDER finding as moot [198] Motion to Alter Judgment; finding as moot [200] Motion for Judgment as a Matter of Law; finding as moot [200] Motion for New Trial; finding as moot [204] Motion for Taxation of Costs; finding as moot [210] Motion to Review; and finding as moot [213] Motion to Review.

All motions are rendered moot in light of the announcement by counsel for the parties that this cause of action has been fully and finally settled. NO FURTHER WRITTEN ORDER SHALL ISSUE.

Signed by District Judge L. T. Senter, Jr., on January 12, 2010.

That’s the ballgame! No details available.

Scrooges and Stooges – State Farm attorneys pack the sleigh!

More rapid than eagles these coursers they came

Scrooges and Stooges that went straight to work

Filling stockings with motions and giving justice a jerk!

Katrina insurance litigation is beginning to not look at lot like Christmas – even when State Farm slips in a check.  Take Kuehn v State Farm, for example.  Anita Lee reported State Farm pays up, but argues award was in error in Monday’s Sun Herald:

State Farm Fire & Casualty Co. recently paid a couple $179,100.31 for Katrina damage, but their attorney said the check came too late to save Henry and June Kuehn’s Cove Place home.

Attorney Earl Denham said the two-story house further deteriorated as the Kuehns awaited settlement of their insurance claim. The city of Ocean Springs wants the property cleaned up.

U.S. District Judge L.T. Senter Jr. ordered the Katrina payment in August, but State Farm has asked him to reconsider the ruling.

“This amount is tendered without recourse, but with the understanding that this is not an admission of an amount owed,” said a letter sent with the check by State Farm attorney Scot Spragins of Oxford. “Given the circumstances, State Farm has decided to make this tender to eliminate the threatened destruction of the Kuehns’ home.

“State Farm intends to continue to litigate the issue. In the event that we are successful and it is determined that these sums are not owed, then State Farm will not seek reimbursement.”

Denham replied the next day: Continue reading “Scrooges and Stooges – State Farm attorneys pack the sleigh!”

BREAKING NEWS – Bossier moves for Judgment as a Matter of Law or New Trial

Pursuant to Rule 50, Fed. R. Civ. P., Plaintiff moves for judgment as a matter of law on all issues concerning contract damages on the grounds that the jury did not have a legally sufficient evidentiary basis to find in favor of Defendant….

The law is clear that when considering a Rule 50 motion, “the Court must review all of the evidence from the record, draw all reasonable inferences in favor of the non-moving party, and may not make credibility determinations or weigh the evidence.” Poliner v. Texas Health Systems, 537 F.3d 368, 376 (5th Cir. 2008).  While this standard is a heavy one, in the case sub judice the evidence presented at trial compelled a finding in favor of the Plaintiff. The jury’s contrary verdict should not be allowed to stand.

This Honorable Court denied Plaintiff’s Motion for Judgment as a Matter of Law after Defendant’s presentation of the evidence, but noted during the jury instruction conference that the motion probably should have been granted.

On blog and off, readers have consistently offered positive comments about Bossier’s counsel Judy Guice calling her an ethical, smart lawyer that fights for her clients. At least one has mentioned that putting clients first, not money, is what all lawyers are supposed to do.

Nothing is more telling of Guice’s client-first commitment to the practice of law than the Motion for Judgment As A Matter of Law or in the Alternative for a New Trial and the Memorandum of Support – both were filed Friday in Bossier v State Farm and followed by a relatedOrder from Judge Senter.

Guice’s Memorandum in Support of the Motion for Judgment as a Matter of Law put a compelling argument on the table:

Defendant bore the burden of proving that all of Plaintiff’s dwelling loss beyond that which had previously been paid resulted from storm surge flooding. It failed to carry this burden. Indeed, Defendant failed to offer a qualified expert witness on the issue of causation. Continue reading “BREAKING NEWS – Bossier moves for Judgment as a Matter of Law or New Trial”

Slabbed Scoops the News: Bossier gets nothing in Phase 2

We’ve confirmed Kris Carter’s comment. On behalf of Nowdy and Bam Bam we’d like to thank Mr and Mrs Bossier for sticking with this litigation to the end. While our gratitude will certainly be of little solace to them right now perhaps in time they’ll take comfort from the greater good it accomplished. We also thank Judy Guice.  The tenacity in her advocating for the Bossiers is self-evident and indicative of the fine consumer lawyer she is.

I’ll be back with some analysis a bit later on the jury.

sop

A private matter, a public court – SLABBED reponds to Judge Senter

“This is a public court…It belongs to the citizens. I believe in hearing everything in open court if I can.”

Federal District Judge L.T. Senter, Bossier v State Farm

Open court is not a place where Judge Senter presides.  Instead, it is the envelope of the litigation process – the structural architecture holding together our system of  justice for all.

Bossier property post-Katrina

Like the envelope of homes that stood against Katrina’s wind and water, not all damage to our system of justice is visible to the naked eye.

Neither was the damage to the Bossier’s home.  Continuing with the analogy, tort reform and other system changes simply hide the cracks. What is needed is change that strengthens the structural architecture of the envelope, Open court – change that Judge Senter can make:

  • Modify the Mediation Order so that the period of mediation immediately follows the filing of a Complaint and Answer.
  • Improve the quality and oversight of the mediation process and require plaintiffs to attend a pre-mediation session conducted by the court that fully explains the process.
  • Require all motions for a protective order to fully comply with the Rules requiring specificity in the documentation of “good cause” and deny any that do not with prejudice.
  • Insist settlement conferences are documented with the technology used for video depositions and privately review the tapes before sealing.
  • Limit the power a magistrate has to keep evidence out of court. Continue reading “A private matter, a public court – SLABBED reponds to Judge Senter”

Lets connect the damages verdict in Bossier to reinsurance, securitization via cat bonds and global finance

I sometimes pinch myself someone as financially sophisticated as Mr CLS posts with us on Yahoo Allstate. Before I get to his post there is one concept that must be understood in reinsurance. Under traditional reinsurance the ceding party (such as State Farm) gets to take a credit on their balance sheets for the risk transferred to the reinsurer for the amount of reinsurance purchased. A problem with Cat Bonds is the lack of specific attachment points in loss payments (unlike traditional reinsurance) means the collection of the cat bond trust proceeds is de-coupled from the amounts actually paid to the insureds for their losses making it possible for an unsavory insurer to both collect for losses via the Cat bonds and stiff their insureds.

So what happens when traditional reinsurance is then backed by Cat bonds for a homeonwers policy which was also bundled and sold via securitization (think life settlements)? Mr CLS asked that exact question this morning and as per usual he followed the money to Bermuda:

Securitization for HURRICANE risks ABOVE the Hurricane Storm Surge water line.

“If I couldn’t differentiate between wind and water, I could NOT pay”, said adjuster Matthew Thiele.

The final version said “When the investigation indicates that the damage was caused by excluded water and the claim investigation does not reveal independent windstorm damage to separate portions of the property, there is NO COVERAGE available under the homeowners policy.

So where is the “Transfer of risk” through securitization?

What was the “credit” taken on liability balance sheets or off balance sheets for this transfer of risk?

Would a balance sheet credit be taken (say in the securitized HO policy of Bossier) for:
a) $2,300 (the initial payment loss)
b) $93,480 (the supplemental payment 4 years later)
c) $650,000.00 (the full policy limits)

S&P rate Alpha Wind 2000-A Ltd’s $90 million

These HURRICANE securities provide $90 million of retrocessional coverage to ARROW RE, a wholly owned Bermuda reinsurance subsidiary of Goldaman, Sachs & Co. Arrow Re has reinsured a $100 million portion of an excess-of-loss treaty covering STATE FARM Group (State Farm) policies, primarily homeowners, in Florida. This securitization represents a 90% cession of that risk to the holders of the securities. Continue reading “Lets connect the damages verdict in Bossier to reinsurance, securitization via cat bonds and global finance”

Breaking News! Jury decides for Bossier – Phase II starts Thursday! UPDATED

Minute Entry for proceedings held before District Judge L. T. Senter, Jr: Jury Trial held on 11/10/2009: PHASE I COMPLETED, JURY VERDICT returned in favor of Plaintiff; Court ruled State Farm had no arguable reason for delinquency, therefore, PHASE II of JURY TRIAL TO BEGIN 11/12/09, at 1:00 P.M.; COUNSEL to reconvene in Chambers, 11/12/09, at 10:00 A.M.

I’ve been Sop’s blog partner almost two years now; and, Bossier v State Farm is one of the few cases the first case I’ve covered that has come close to trial.  In fact, the only trial other than Bossier that I recall at the moment is Lisanby v USAA.

The jury’s decision is sealed; but the minute entry tells us a jury of peers heard the evidence and decided in Bossier’s favor and Judge Senter’s ruling – no arguable reason for delinquency – set the stage for Phase II.

Congratulations to the Bossiers and to their attorney and tireless advocate, Judy Guice! Continue reading “Breaking News! Jury decides for Bossier – Phase II starts Thursday! UPDATED”

State Farm’s expert[sic] all wet: Bossier v State Farm trial update

In a written statement Monday, State Farm said “… based on the testimony of both parties, it is clear that Mr. Bossier and State Farm have different views regarding whether it was wind or storm surge that destroyed Mr. Bossier’s home.

Different views, indeed. Why else would there be a trial? It was their differing views of an expert qualified to determine cause of loss, however, that were at issue when the trial resumed yesterday.

Last week ended with Bossier’s question on the table; i.e., were State Farm’s expert witnesses, Forrest Masters, Ph.D. and Robert H. Weisberg, Ph.D., qualified to give an opinion on the cause of Bossier’s loss? State Farm answered by filing a Bench Memorandum stating the Company’s position: Continue reading “State Farm’s expert[sic] all wet: Bossier v State Farm trial update”

Bossier delayed until Monday

As I alluded yesterday we heard the rumor about the delay and Anita Lee made it official. Today she gives us some added color to the cause:

The fifth day of trial in a Hurricane Katrina wind vs. water case was cancelled Friday because Judge L.T. Senter Jr. was sick.

The jury trial in Bossier v. State Farm is expected to resume Monday morning in U.S. District Court.

Reginald “Ed” Bossier contends that wind effectively destroyed his one-story home before the tide from the Back Bay surged through.

The story also contained an interesting tidbit we’ve been all over since it happened in the very late belated payment to the Bossiers for their outbuilding. Again this is manifest bad faith and illustrates State Farm’s deny first and delay payment approach to their claims handling: Continue reading “Bossier delayed until Monday”