NEWS! Neilson case in jury’s hands & MSSC threw out “bad faith” awards in USA v Linsanby

Patsy Brumfield reports the closing arguments in NEMS360 story – Agent’s fate in jury’s hands

The Sun Herald is running the AP story on Mississippi Supreme Court’s decision in USA v Lisanby – Supreme court rejects some of Katrina case award

Back with more as information becomes available.

State Farm's allegations about "sticky note" just don't stick – a Rigsby qui tam update

Dishonesty is the fundamental component of a majority of offences relating to the acquisition, conversion and disposal of property (tangible or intangible) defined in the criminal law such as fraudIntellectual dishonesty is dishonesty in performing intellectual activities like thought or communication…the conscious omission of aspects of the truth known or believed to be relevant in the particular context.

When the Rigsby sisters discovered Lecky King’s “Put in Wind file – Do Not Pay Bill Do not discuss” handwritten note stuck on the face page of engineer Brian Ford’s report on Katrina damage to the McIntosh property, it became the “face” page, one might say, “that launched a thousand” Katrina policyholder claims into court.  More recently, it launched State Farm’s counsel into an intellectually dishonest representation of related evidence to the Court.

Keep in mind as you read the documentation of this intellectual dishonesty that, when she was finally deposed, Lecky King acknowledged it was her handwriting on the note: Continue reading “State Farm's allegations about "sticky note" just don't stick – a Rigsby qui tam update”

A mind is like a parachute. If it doesn’t open, you’re f#@%*d!

If you’ve wondered why there are differing perspectives about the factual basis of litigation, find the cord to your parachute and open your mind to Harvard Law’s Project on Law and Mind Sciences and situationism.

Situationism is premised on the social scientific insight that the naïve psychology—that is, the highly simplified, affirming, and widely held model for understanding human thinking and behavior—on which our laws and institutions are based is largely wrong. Situationists (including critical realists, behavioral realists, and related neo-realists) seek first to establish a view of the human animal that is as realistic as possible before turning to legal theory or policy. To do so, situationists rely on the insights of scientific disciplines devoted to understanding how humans make sense of their world—including social psychology, social cognition, cognitive neuroscience, and related disciplines…

SLABBED reflects a situationist perspective and even touches on the subject in posts such as:

Recommended holiday (half-time) reading includes the blog post, On the Ethical Obligations of Lawyers: Are We Snakes? Are We Supposed to Be?, and the following readings from Continue reading “A mind is like a parachute. If it doesn’t open, you’re f#@%*d!”

Merlin makes introduction and SLABBED welcomes Shelia Birnbaum

Posted on September 22, 2009 by Chip Merlin (posted to SLABBED with permission)

Sheila Birnbaum: The Attorney Behind State Farm’s Katrina Scruggs Defense Explains How Major Corporations Can Use the Civil Justice System to Thwart Consumer Rights

I enjoy good lawyering. Corporate America has the best lawyers defending their actions and figuring out how they can be unaccountable for their bad acts. A formidable New York Ivy League trained lawyer, Sheila Birnbaum, is one of those lawyers. I give her, Corporate America, and especially State Farm, all the credit they deserve for showing that they can beat State Farm’s customers and their attorneys in the appellate courts of America. Birnbaum implied that large corporations have greater influence over federal courts of appeal in her webinar with the Washington Legal Foundation last year.

The Washington Legal Foundation is one of those “ultra conservative” tobacco, manufacturing, and insurance interest dominated “think tanks” that espouses legal theories that limit consumer interests. Insurance defense firms and lobbying groups use these groups for propaganda. They try to get their board members appointed to government and judicial positions. Unless you are supported by one of these groups or you represent those product manufacturers, you could not dispute me. This group is as much anti-consumer as communists are anti-capitalist.

These groups use their vast financial resources to substantially affect our laws, even though they have no vote or legitimate need to affect public policy and the rights of millions of consumers. They hire the most highly paid lawyers, like Sheila Birnbaum. So long as these corporate interest groups are allowed to use their money to influence politicians and the media, Americans will always have the problem of their government ultimately working for the corporations and against their best interests. British Tories were the “corporate interests” at the time of the American Revolution, and corporations represented by lawyers like Birnbaum are the new American Tories of the twenty-first century. Their law firms pretend to do good while they rake-in millions from corporate representation, public relations advertisements, political support, and corporate propaganda. Individual and consumer interests have much less affluent financial political help. Guess who is winning?

Over the weekend, I came across a webinar by the Washington Legal Foundation featuring Sheila Birnbaum. I first thought that Slabbed would have noted this. But, I search the term “Birnbaum” on Slabbed search and found the following Continue reading “Merlin makes introduction and SLABBED welcomes Shelia Birnbaum”

What’s the score? Can’t tell – this Court needs 7th inning stretch

A week from today,  August 29, 2009 will mark the beginning of the fifth year following Hurricane Katrina – time for a 7th inning stretch.

Although I had to double down on posts the day before, I had my 7th inning yesterday – reflecting on what I know and don’t know about Katrina litigation and what I need to know to help the slabbed.

“This Court” – the Southern District Federal Court hearing Katrina litigation – needs a 7th inning for reflection as well.

As the storm moved inland and it became possible to assess the damage, there was little doubt  a legal storm would follow – that it so quickly became a Category 5 was the only surprise.

Much of the post-Katrina preparation for the legal storm to come fell to Magistrate Judge Walker — largely by default:   “One  week after the storm, the U.S. Marshals located all of the federal judges on the Gulf Coast and determined that I was the only judge whose home had not been destroyed.”

Katrina litigation began with the Court in a survival mode.  Continue reading “What’s the score? Can’t tell – this Court needs 7th inning stretch”

SLABBED Daily – March 31

Trying out a different name after Sop’s shocking discovery yesterday.

and, then, there’s the latest from Louisiana Citizen’s Insurance and the State’s never-met-an-insurer-that-wasn’t- right commission reported by Rebecca Mowbray for the Times Picayune in Citizens passes on settlement in Katrina class action litigation.

The board of Louisiana Citizens Property Insurance Corp. is engaged in a high-stakes gamble as it seeks to deal with two overlapping class-action lawsuits over the state-sponsored insurer’s handling of claims from the 2005 hurricanes.

If Citizens prevails, it says it will dispense with both suits for $35 million. If it loses, taxpayers could be on the hook for possibly hundreds of millions of dollars… Continue reading “SLABBED Daily – March 31”

Double Trouble Doubled Down – Kuehn v State Farm

Remember the Kuehn’s of Double Trouble Kuehn v State Farm?

On February 28, 2008, the appraisal process concluded, and the umpire and the parties’ appraisers signed an Award setting forth the appraisal amount of $174,811.80…counsel for State Farm Fire told the appraisers and the umpire that the Award did not specify which part was for wind…the appraisers and umpire rewrote the Award to indicate that the entire amount was for wind damage.

Well, I ran into their case when I was looking at recent filings and decided to take a look and see how things were going.

We left them back in February shortly after Counsel for Plaintiffs learned during the deposition of State Farm’s designated appraiser, John Minor, on or about February 6, 2009, that counsel for State Farm will be, at the very least, necessary and material witnesses in this action. Counsel for State Farm recognized this fact and the deposition was halted.

John Banahan had just stepped in as new counsel for State Farm and requested an extension on the period of discovery on the appraisal issue until March 31 that would move the deadline for motions back to mid-April.

What happened between then and now would be easier to explain if this case had not bounced between state and federal court twice since  Hurricane Katrina. Wait, I take that back!  Let’s take a closer look at this case.

Hurricane Katrina ravaged their insured property, causing destruction to the structure and its contents.  On September 27, 2005 an adjuster for State Farm inspected the property.  The time line and documents that follow tell the story.

January 4, 2006
State Farm Fire…informed Plaintiffs that it would not cover the loss beyond what was already paid, which was $10,765.48.pages-from-kuehn-v-state-farm-41

April I, 2006 Continue reading “Double Trouble Doubled Down – Kuehn v State Farm”

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”

Speaking of lobbying – NFIP pays insurance company legal fees in flood claims disputes!

We are pleased to transmit to you the Federal Insurance Administration’s (“FIA”) new Guide for Write Your Own Counsel. This Guide provides important information on the policies and procedures to be followed by Write Your Own Companies (“WYO Companies”) and their counsel in litigation involving the National Flood Insurance Program (“NFIP”)…

Since the inception of the WYO Program in October 1983, defense of lawsuits based on the SFIP has generally been handled smoothly and effectively. We stand ready to continue to offer support to WYO Companies in all litigation matters concerning the NFIP in our ongoing spirit of partnership.

Can you believe it? I can not – but google search results for “NFIP litigation” offered a copy.

This Guide for Write Your Own Counsel (“Guide”) has been developed by the Federal Insurance Administration (“FIA”) and the Federal Emergency Management Agency (“FEMA”) Office of General Counsel (“OGC”) to assist Write Your Own (“WYO”) Companies and their counsel defending National Flood Insurance Program (“NFIP”) litigation.

So much for thinking it is the deep pockets of the insurance industry that put most NFIP policyholder-plaintiffs at a financial disadvantage in litigation – those deep pockets are in Uncle Sam’s pants!

The FIA and WYO Company share a unique and common interest in the defense of cases related to the NFIP. Among other factors that give rise to this shared interest are the fiduciary responsibilities of the Company, the statutory and regulatory basis for the NFIP, the Federal government’s administrative and oversight responsibilities for the program, the need to share privileged information, and the fact that Federal funds are at risk. Accordingly, through the Arrangement, the FIA and the WYO Company have entered into a joint defense agreement to implement FEMA’s oversight responsibilities for the purpose of any litigation related to or arising under the NFIP to enable the free flow of information between the FIA, FEMA OGC, the WYO Company, and its legal counsel.

“Unique” is not exactly what I’d call the the government’s “common interest” with the insurer defendants in Katrina litigation.  I wonder if Judge Senter had a better word in mind in the “opinion” he would not “venture” in his December 12, 2008 Order in Gagne v State Farm. Continue reading “Speaking of lobbying – NFIP pays insurance company legal fees in flood claims disputes!”