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”