Kodrin v State Farm: a Writ with its wits about it

Roof to the Kodrin property (Redmann website) The roof was found 1000 feet from where the property stood. Wind blowing in that direction preceded the arrival of flood water when wind was blowing in the opposite direction. The force of water entering the property was not strong enough to have moved the roof from where it landed.

Sop caught the breaking news Kodrins take the 5th to the Supremes last week and, wanting to know more about the Writ, I picked up on the invitation of Kodrin’s Counsel and made a trip to the Redmann Law website.

Kodrin, much to my surprise, is not petitioning the Court to hear insurance issues.  Instead,  Kodrin raises two questions about the federal authory over state law.  Obviously the underlying issues are about state insurance law but the question Kodrin presents are clearly about the extent of any related federal authority, if any authority at all:

  • The court of appeals ruled that under Louisiana law as long as an insurer relies upon its own engineer’s opinion that petitioners’ loss of their home from Hurricane Katrina was not covered under their homeowners’ policy because it was flood-caused rather than wind-driven, it is not acting in bad faith and cannot be assessed extra damages and attorney’s fees under Louisiana law when it wrongfully denies coverage. Does this result overturn settled Louisiana law which penalizes an insurer who acts in bad faith in denying coverage even when it relies upon its own engineer’s opinion in doing so, creating unprincipled federal common law on the subject and subverting the policies of comity and federalism announced by this Court in Erie R. Co. v. Tompkins, 304 U.S. 65(1938)?
  • Did the court of appeals nullify petitioners’ right to a jury trial by usurping the jury’s finding that respondent had acted in bad faith when it delayed deciding about whether petitioners’ homeowners’ policy would cover the loss of their home and then eventually denied coverage for the loss as flood-caused rather than wind-driven?

Skadden Arps attorney Shelia Birnbaum represented State Farm before the Court in Campbell and  figured prominently in State Farm’s settlement with the Scruggs Katrina Group.  Her name came to mind when I opened a State Farm engineer’s report you really could write on a napkin.                 Continue reading “Kodrin v State Farm: a Writ with its wits about it”

The Kodrins Take the 5th to the Supremes

I saw this breaking story on the case of Kodrin v State Farm show up in our Times Picayune RRS feed and immediately recognized the case since we covered it extensively. (here, here, here, and here) It was also the case where I exposed Rossie as a Katrina legal charlatan as his penchant for letting State Farm ghost write his blog finally caught up with him.

All that aside I wish I could get empart some hope that the Kodrin’s appeal to the Supremes will amount to anything other than a quixotic effort, after all we are a policyholder blog. Simply put, while we all know State Farm acted in bad faith in how they adjusted the Kodrin’s wind claim simply knowing that fact is not enough; the evidence must be introduced into the trial record and it is largely missing in Kodrin. The first “here” I linked above is what I think history will judge as the definitive post on the topic of Kodrin and getting bad faith cases past the 5th Circuit and our newer readers will also find out what was missing from the Kodrin equation. Without further commentary on my part following is today’s Times Picayune story on the Kodrin appeal to the US Supreme Court:

A Port Sulphur couple who lost their home in Hurricane Katrina has asked the U.S. Supreme Court to reverse a lower court ruling rejecting their assertion that State Farm Fire & Casualty Co. acted in bad faith when handling their claim.

Judy and Michael Kodrin originally sued in U.S. District Court and won a $356,318 award, which included the full value of their homeowners policy plus additional penalties and attorneys fees.

But a three-judge panel of the U.S. 5th Circuit Court of Appeals threw out the penalties and attorneys fees, reducing the overall award to $117,084, out of which the Kodrins would have to pay their own legal fees if they recover no additional damages. Continue reading “The Kodrins Take the 5th to the Supremes”

When Katrina’s music stops – the player without a chair

Other than the add-on that keeps bright blue text below the surface (usually), SLABBED is pretty much a “standard package” with the capacity to collect data on a fairly basic set indicators.

Our data come without the context needed for us to know much more than someone is reading; and, as long as we know that, we are content taken’ it as it comes.  However, I do confess to having occasional thoughts about those who come at times and from places where most are sleeping, most often wondering if they’re burdened but fearful.

I’ve thought more about those with sleepless nights since reading the Insurance Adjuster’s Dilemma: Tell the Truth and Face the Consequences by Raising Claim Practice Misconduct

The classic example is the civil prosecution of the Rigsby sisters. They told a story of a State Farm adjuster holding numerous reports which were not being sent to policyholders but were “revised.” The revised reports were always worse for the policyholders because they allowed for State Farm to deny claims. Had their story stopped there, they would have been terminated. But their actions went further with Dickie Scruggs, and the rest has been fodder for demeaning posts by the insurance industry.

When Katrina’s music stops playing this song, there will be a player without a chair – and, who that might be is something I’ve thought more about since reading about the arrangement between the WYO companies and FEMA. Continue reading “When Katrina’s music stops – the player without a chair”

Putting Kodrin v State Farm in perspective. Slabbed unifies the 5th Circuit decisions

I’ll start this post by publicly thanking Chip Merlin and Rick Trahant for their insight along with David Rossmiller. Rossmiller?? Has Sop lost his mind???? No, it was yesterday’s spirited exchange that I had with the guy, whom we affectionately call Rossie internally here at Slabbed that provided just enough intellectual stimulation for me to gain a greater insight into these cases and indeed unify that which is really happening in downtown New Orleans at the 5th Circuit Court of appeals. We need to begin with Rossie’s last blog entry which happened to be on Kodrin:

Kodrin is the ultimate in single causation questions: that’s all the jury heard, a dichotomy between the Kodrins’ claim that wind alone destroyed their house, and State Farm’s claim that flood alone destroyed their house. This may sound like a strange set-up to you, until you look at the facts of the case: the whole neighborhood was hit by Katrina flooding, which washed the rest of the houses off their foundations and kind of pooled them in one location. These homes, although severely damaged, were not utterly torn down and demolished. The Kodrins’ home, among all of them, was the only one obliterated…………

Now, this gives me some hope that this panel gets it when it comes to an understanding of the proper analysis to differentiate between single and multiple force damage: first determine what the loss is. The example used, flooded carpets and wind-damaged roof, was a fairly common scenario in Katrina damage, but it really doesn’t present any analytical problems, only problems of proof. The real test of understanding is the realization that the carpet itself, or the roof itself, could be damaged by two single forces that caused separate damage, one covered and one uncovered, and that this does not make them concurrent forces.

Although the court left standing the jury verdict on property damage, it vacated the award of punitive damages. The court said, in light of the evidence, there could be an honest dispute about what caused the damage to the Kodrinhome. Again here, I don’t know what happened with the flood payment, whether that was returned or not, or the precise circumstances under which it was applied for, paid and accepted, but the very fact of a flood payment creates an idea in my mind that there could be an honest belief that flood caused the damage.

Here’s what the court said about bad faith, when it exists and when it doesn’t:

State Farm declared that it determined flooding was the more likely cause of the damage to the home because (1) the Kodrins’ neighborhood was inundated when a levee was overtopped during Hurricane Katrina, (2) the Kodrins’ home was just one house away from that levee, and (3) many other houses in the area were lifted off their foundations and destroyed by the floodwaters. The Kodrinsthemselves acknowledged that their claimed wind damage to their home was unusual in their neighborhood, advancing that a tornado must have caused the damage as their speculation why their home was the only one in the area destroyed by wind, not flooding. On these facts, we perceive no probative evidence that State Farm acted in bad faith. State Farm’s refusal to pay was with reason, even if the jury ultimately rejected that reason. The Kodrinshave failed to prove otherwise; they essentially ask this court to find bad faithany time an insurer denies coverage and a jury disagrees. This would unduly pressure insurers to pay out claims that they have reason to believe lie outside the scope of coverage, solely to avoid penalties later. Such a rule would pervert the presumption that insurers act in good faithunless the insured proves bad faith, and this is foreclosed by Louisiana law.

I’ve left out the parts of his post where I thought the legal analysis was shoddy leaving our readers to decide that for themselves from reading the comments there. Rossie, for his part will learn from this post why the jury in Kodrin received single peril jury instructions. Our readers will learn why Kodrin attracted Rossie’s attention back in 2007 while other cases like Dickerson have never graced the pages of his blog AND HOPEFULLY lawyers who read us will gain a greater understanding of what is involved in proving bad faith on part of an insurer, in this case State Farm using standard Katrina slab case fact patterns.

We begin back in December 2007 Continue reading “Putting Kodrin v State Farm in perspective. Slabbed unifies the 5th Circuit decisions”

The ABA Journal is reporting on Kodrin

And staff writer Martha Neil once again linked us. We’re Martha positive here at slabbed, here is the story:

An award of punitive damages and attorney fees in a bad-faith case against an insurance company has been overturned by the 5th U.S. Circuit Court of Appeals.

State Farm Fire and Casualty Co. was mistaken when it denied coverage for wind-based damage from Hurricane Katrina, wrongly attributing the destruction of a home to uncovered water damage. But the plaintiff homeowners, Michael and Judy Kodrin, didn’t establish that the insurer acted without a good-faith basis in denying coverage. Hence, although they are still entitled to an earlier $200,000 jury award for the wind damage to their home, they will no longer get additional punitive damages and an award of attorney fees for bad faith under the 5th Circuit decision, the Associated Press explains. Continue reading “The ABA Journal is reporting on Kodrin”

5th hands Kodrin a polyester purse – stands up to water! (Kodrin v State Farm)

We’ll talk about the sow’s ear later, let’s take a look at this purse –the 5th Circuit’s decision on State Farm’s appeal of Kodrin.  If you like the way poly handles water, it should suit you better than silk.

We affirm the jury’s finding of coverage and its award of damages for the loss of the Kodrins’ home and its contents under the homeowner’s policy. We vacate that portion of the court’s judgment awarding penalties, damages, and attorneys’ fees under R.S. 22:1220 and 22:658 resulting from the jury’s finding of bad faith. We therefore remand this case to the district court with instructions to enter a revised judgment consistent with this opinion.

First, take a look at the construction – the issues State Farm appealed:

State Farm raises a number of issues on appeal, each of which falls into either of two general claims of error: (1) The district court improperly instructed the jury, and (2) the Kodrins failed to offer legally sufficient evidence for a jury to find that State Farm acted in bad faith.

Now, a little background before we go further.

When Judy and Michael Kodrin returned to their Port Sulphur, Louisiana, home following Hurricane Katrina in 2005, they found nothing but a concrete slab and debris… Continue reading “5th hands Kodrin a polyester purse – stands up to water! (Kodrin v State Farm)”