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”

Becky Mowbray Profiles Recent Policyholder Court Wins in the Times Picayune

And of course such a profile had to include extensive quotes from Rick Trahant who needs no introduction here at Slabbed and Soren Gisleson whom Nowdy has had the opportunity to chat with via email. Louisiana Insurance Commish Jim Donelon throws a wet blanket on the Ike theory but then again Rick isn’t on Mr. Donelon’s Christmas list in any event. Here is the profile:

After siding with insurance companies in early rulings after Hurricane Katrina, the 5th U.S. Circuit Court of Appeal has suddenly cranked out a stream of policyholder-friendly rulings in hurricane cases.

In recent weeks, the region’s federal appellate court has affirmed an award in favor of a homeowner, overturned a decision in favor of an insurer, said that homeowners can collect mental anguish damages when insurers don’t pay, and revived a whistle-blower lawsuit alleging that insurers ripped off the government in paying flood claims.

The apparent change of heart has left many giddy plaintiff attorneys wondering whether the Texas judges involved in the favorable decisions have been moved by the experience of Hurricane Ike slamming their home state.

“Now, going to work, they see all the damage a Category 1 windstorm did to downtown Houston,” Rick Trahant said. “I think, as people, they can’t help but to be affected by what they’ve seen in their own state in Texas.” Continue reading “Becky Mowbray Profiles Recent Policyholder Court Wins in the Times Picayune”

Breaking: Lexington loses big at the 5th Circuit (Again). Shades of the Warrs…

This case has a little something for the people stopping in from google checking on the recent Brent Warr news (google is very very good to us) :-) as well as those of us that like seeing the courts make insurers honor their contracts. Let’s start with an excerpt from today’s ruling at the 5th Circuit Court of Appeals in Korbel v Lexington:

In October 2002, Korbel purchased a home at 430-432 Olivier Street (the “house”) in New Orleans, Louisiana, and began extensive renovations which were not completed prior to Hurricane Katrina. Korbel ate, bathed, and slept at his parents’ house, but sometimes slept at the house when he was working there late and was too tired to return to his parents’ house. Lexington insured the house, and the policy covered damage to the house, other structures, and personal property, as well additional living expenses resulting from loss of use. Hurricane Katrina struck on August 29, 2005, before the renovations had been completed. At the time, the property was two-thirds gutted, lacked a finished kitchen (including refrigerator) and bathroom, contained minimal furniture, and received electricity via a temporary pole. Korbel first reported his claim to Lexington on September 26, 2005.

Though I’m severely pressed for time this case became compelling for obvious reasons as a large part of the criminal case against Mayor Warr hinges on his residency when the storm hit. Let’s dig deeper into the fact patterns and see if any of this applies: Continue reading “Breaking: Lexington loses big at the 5th Circuit (Again). Shades of the Warrs…”