Yourlawyer.com (Hurricane Claims News)

Witness Says State Farm Didn't Thoroughly Investigate Katrina Claims

Fri, 22 May 2009 00:00:00 -0700

A woman who worked for State Farm on Hurricane Katrina claims has testified that the insurer did not bother to thoroughly investigate property damage for policyholders affected by the 2005 hurricane's storm surge. According to SunHerald.com, Kerri Rigsby said at the time that State Farm held that if a house in the path of Katrina's storm surge was a total loss, it was caused by water, not by wind.

State Farm was one of the largest insurers on the Gulf Coast when Katrina made landfall there in 2005. Thousands of homes were reduced to rubble by wind and the massive storm surge created by the hurricane. Normal home owners policies do not cover damages from flooding, only wind. But in the case of Katrina claims, many home owners accused State Farm and other insurance companies of attributing damage to flooding, when in reality it was caused by wind, as a way to avoid paying the full value of claims. Some insurance companies initially made offers to settle claims for only pennies on the dollar, sparking thousands of lawsuits along the Gulf Coast.

Rigsby testified yesterday at a hearing in Mississippi to determine if a whistleblower lawsuit against State Farm should go forward. According to SunHerald.com, Kerri Rigsby and her sister, Cori, have accused the insurer of conspiring with two vendors to minimize what the company owed for wind damage by overcharging the federal government for water damage. The sisters worked for independent adjusting firm E.A. Renfro, and Kerri performed work for State Farm after Katrina.

Kerri Rigsby testified that in the weeks following Katrina, she attended a State Farm meeting where adjusters were told to “hit policy limits” on flood claims and tell policyholders an engineer would be sent out to determine whether State Farm owed money for wind damage.

According to insurancenewsnet.com, Rigsby also said the company told her storm surge preceded Katrina's winds. "State Farm indicated there was no question, if (a house) was a total loss, it was caused by flood," Rigsby said. She later added, "I believe that we owe the policyholder a thorough investigation. I don't believe we did a thorough investigation down here to determine how much was wind and how much was water."

According to SunHerald.com, she also repeated allegations that a State Farm claims manager ordered reports changed if they failed to conclude that water was the cause of a policyholder’s damage. Finally, Kerri Rigsby alleged that the insurer canceled inspection reports "en masse" if too many reflected wind damage.

Katrina Lawsuit Against Army Corps of Engineers Will Proceed

Mon, 23 Mar 2009 00:00:00 -0700

A U.S. District Court Judge has ruled that a group of Louisiana residents whose homes were destroyed by Hurricane Katrina can proceed with a lawsuit against the U.S. Army Corps of Engineers. According to the Associated Press, the lawsuit claims the Corps is responsible for the homes' destruction because it failed to maintain a levy along the Mississippi River-Gulf Outlet, allowing Katrina's storm surge to flood parts of New Orleans and St. Bernard Parish through that waterway.

The Hurricane Katrina lawsuit is now scheduled for trial beginning April 20. According to the Associated Press, the case will be watched by thousands of other Hurricane Katrina victims who also blame the Army Corps of Engineers for the loss of their homes.

The Mississippi River-Gulf Outlet serves as a shortcut for ships from the Mississippi River heading to the Gulf of Mexico. When it was built, it cut into the Louisiana swamps. Critics of the outlet claim it destroyed wetlands, marsh and swamp forests that had served as natural flood controls, and were effective at slowing surges from storms like Katrina.

The federal government has tried on three occasions to have the lawsuit, known as Robinson vs. United States, dismissed, the Associated Press said. This time, the Corps argued that federal law gives it immunity from lawsuits - a concept called sovereign immunity - and that it properly maintained the waterway.

But U.S. District Judge Stanwood Duval dismissed that argument, writing that there were “substantial questions of fact with respect to the actions and inactions that followed the creation of the channel".

According to the Associated Press, Judge Duval had already dismissed a class-action lawsuit against the Army Corps over the breaching of New Orleans' 17th Street Canal during Katrina. The judge ruled that the corps was immune in that case under the Flood Control Act of 1928. That act grants immunity to the federal government when flood control projects fail.

But the lawsuit involving the Mississippi River-Gulf Outlet does not focus on the channel's flood controls. Instead, Judge Duval said that a trial is required on the issue of whether the Corps failed to take the risk of flooding from the outlet seriously after it dug the channel, the Associated Press said. The Corps argued that it "relied on studies that the widening of the channel and loss of wetlands would not have an effect on the people and property in the area," Duval said. "The question is whether the reliance on these studies was negligent or not."

According to The New York Times, the government has said damages in the suit could reach $100 billion - making it the largest in U.S. history. If the plaintiffs are successful, it would open the door to more litigation, as more than 400,000 similar complaints have been filed against the Corps, the Times said.

Louisiana Citizens Settles Hurricane Katrina, Rita Lawsuits

Fri, 14 Nov 2008 00:00:00 -0800

Louisiana Citizens Property Insurance Corp. has agreed to pay $35 million to settle two class action lawsuits over its slow response to Hurricanes Katrina and Rita in 2005. The Louisiana Citizens Property Insurance Corp., the state's insurer of last resort, voted yesterday to set aside funds to pay the settlements, however, the company has not admitted any fault.

According to the New Orleans Times-Picayune, the funds will settle Adrian Chalona v. Louisiana Citizens and Toni Swain Orrill v. Louisiana Citizens. Both lawsuits alleged that the insurer failed to provide a written offer to settle Katrina and Rita claims within 30 days of being notified of losses.

The Times-Picayune reported that 70,000 individuals have filed claims. However, John Wortman, Louisiana Citizens' chief executive officer said that far fewer - about 30,000 - probably will be entitled to a cash award of as much as $1,000. If a court determines that more than 30,000 individuals deserve payment, the individual awards will be reduced with the $35 million divided among those qualified, the Times-Picayune said.

The settlement will not affect any of the lawsuits filed against Louisiana Citizens that claim the insurer underpaid Katrina or Rita claims. Many companies insuring Gulf Coast policyholders have faced these types of lawsuit since storms. Most disputes center on whether damage to a home was caused by storm surge flooding or wind. Conventional property insurance does not cover flood damage.

Conflicts between Hurricane Katrina homeowners and insurance companies over the storm surge issue led to more than 1000 lawsuits against insurance companies, the largest number ever to follow a natural disaster in the US. A 2008 Government Accountability (GAO) report urged better assessment of “the accuracy of flood payments on hurricane-damaged properties.” Insurance companies’ handling of damage claims from hurricanes, where both wind and water destroy property, needs closer government scrutiny, the report said.

Louisiana Court Says Insurer Acted in Bad Faith, Orders Company to Pay for Hurricane Katrina Damage

Tue, 20 Nov 2007 00:00:00 -0800

A New Orleans home owner whose home was destroyed during Hurricane Katrina has won an appeal against the home owner’s insurance company that denied his claim.   By ruling against Lafayette Insurance Company, the Louisiana 4th Circuit Court of Appeals has given fresh hope to the thousands of Katrina victims who say their insurance companies acted in bad faith when they denied claims.

Lafayette had appealed an earlier state court decision that said the insurance company had to pay for damage to an apartment building owned by an Orleans Parish man that was caused by flooding brought on by levy failure following Hurricane Katrina. In addition to being a source of income, the building also served as the man’s home. Lafayette paid the policyholder about $2,700 for wind damage, but he estimates his home sustained a total of $223,488 in damage that should be covered. Lafayette maintained that because that damage was caused by flooding, it did not have to cover the loss.

In March, a jury awarded the policyholder $369,077 for property damage and lost rent, plus $184,538 in penalties. The judge presiding over the case also ordered Lafayette to pay $258,728 in attorney fees. Lafayette appealed the ruling to the 4th Circuit.   The appeals court agreed with the original ruling that Lafayette Insurance Co.'s policy failed to exclude all forms of flooding because its language was ambiguous. Because of that, Lafayette is required to pay for flooding from the destroyed levies, the court ruled. However the appeals court did reverse the ruling on attorney fees.

In writing its majority opinion, the court wrote that "Lafayette failed to specifically exclude all floods because of the ambiguity contained within the water exclusion." The Louisiana appeals court’s ruling contradicts one made by the US 5th Circuit, which found that insurance companies did not have to cover damage caused by failed levies.

The policyholder’s attorney praised the 4th Circuit’s decision, saying it would go a long way towards rebuilding New Orleans.   But the homeowner will likely have to face down Lafayette once more, as it is expected the insurance company will appeal to the Louisiana State Supreme Court.

Thousands of homes were reduced to rubble by wind and the massive storm surge created by Hurricane Katrina in 2005. Many Gulf Coast homeowners have accused their insurance companies of using bad faith tactics to try to avoid paying claims. Some insurance companies initially made offers to settle Hurricane Katrina claims for only pennies on the dollar, sparking thousands of lawsuits along the Gulf Coast.

Hurricane Katrina caused more than $80 billion in damage along the Gulf Coast, making it the single most expensive natural disaster in US history. The tactics used by insurance companies have also led to more insurance lawsuits than any other disaster.

More than 200 victims of Hurricane Katrina had sued the insurer; terms of the deal weren't disclosed

Tue, 24 Apr 2007 00:00:00 -0700

Nationwide Mutual Insurance Co. has agreed to settle out of court with more than 200 residents of Mississippi's Gulf Coast who sued the insurer over Hurricane Katrina damage, a lawyer for the policyholders said.

Terms of the mass settlement between the Columbus, Ohio-based company and up to 227 of its policyholders were not disclosed.

All of the homeowners are represented by a team of lawyers, who helped negotiate a similar deal for clients who had sued State Farm Insurance Cos. In that deal, State Farm agreed to pay about $80 million to settle with up to 640 policyholders.

The plantiff's attorneys, said they are meeting with Nationwide policyholders this week to explain the settlement terms and some could be paid immediately.

"The parties are pleased to have settled the cases," one of the plantiff's attorneys stated. "It's always better to resolve litigation or disputes rather than drag it out for years."

Nationwide spokesman Joe Case confirmed that a settlement has been reached. "The lawsuits will be or have been dismissed," he said in a written statement.

Hundreds of Mississippi homeowners have sued their insurers for denying claims after the Aug. 29, 2005, hurricane. The companies say their homeowner policies cover damage from a hurricane's wind but not its rising water, including storm surge.

The legal team still represents several hundred clients with pending suits against other insurers including Allstate Insurance Co., MetLife Inc., United Services Automobile Association and the Mississippi Farm Bureau Insurance Company.

Katrina suit costs Allstate $2.8M

Tue, 17 Apr 2007 00:00:00 -0700

Allstate Insurance Co. must pay a Louisiana man who lost his home to Hurricane Katrina more than $2.8 million in damages and penalties, a federal jury decided Monday in a case that hinged largely on whether it was wind or storm surge that wiped out his house.

The jury found Allstate, which claimed most of the damage was due to storm surge, an event not covered in its policy did not pay Robert Weiss enough money to cover wind damage to his home. The verdict included a $1.5 million penalty for the company's failure to pay the claim quickly enough.

"Our intention was to get what we were owed and to send a message that we would not be intimidated," Robert Weiss said after the verdict was read.

Allstate lawyer Judy Barrasso said in closing arguments that Katrina's winds were not strong enough to do the damage. She said Weiss already had received more than $400,000 in insurance payments - including $350,000 in federal flood insurance.

"Have you really seen any proof that the damages were in the million-dollar range?" Barrasso asked the jury.

The lawyer for Weiss, whose home was in the Slidell area on the north shore of Lake Pontchartrain, told the jury in closing arguments that the house was too high above sea level to have been destroyed by Katrina's storm surge. The eye of Katrina passed just east of Slidell on the morning of Aug. 29, 2005.

The lawsuit against Northbrook, Ill.-based Allstate was the second Katrina damage claim to come to federal trial in New Orleans. Hundreds of similar disputes are pending in Louisiana and Mississippi.

In addition to federal flood insurance, Weiss had an Allstate homeowner policy with limits of $343,000 for the dwelling and $240,100 for personal property.

The company, blaming the majority of damage on Katrina's storm surge, paid $29,483 for structural damage and $14,787 for additional living expenses.

The lawyer for Weiss, argued the house was 17 feet above sea level and that engineering data suggested only 14 feet of surge hit the area. "It never reached the bottom of the house," he said.

Allstate's Barrasso said sustained winds at the house did not exceed 100 mph.

"There was plenty of evidence to show the winds were not strong enough to topple this house and the storm surge was," she said.

Jim Neva, a surveyor and engineer who inspected the house for Allstate, initially told Robert Weiss, who is listed as the policy holder, and his wife, Merryl, that wind may have destroyed the home before the surge of water washed away its remnants.

He later backed off that conclusion, however, and deferred to engineering consultant Craig Rogers of Rimkus Consulting Group. Rogers, who wrote the final report on the home for Allstate, convinced Neva that storm surge demolished the house.

Rogers said he didn't personally inspect the property until after he wrote the report. He said he based his conclusions in part on evidence gathered by other Rimkus engineers - a practice he described as common. But Trahant questioned the move.

"Why did Allstate elect to rely on the one engineer who never set foot on the property until long after he stamped his report?" Trahant said in closing arguments.

Allstate also had claimed the Weisses misrepresented part of their claim.

The company said the couple asked Allstate to pay for a boathouse that was not covered by their policy. The company argued a policyholder who misrepresents even part of a claim voids all coverage.

"I think the jury saw right through it," the plantiff's attorney said of the misrepresentation defense after the verdict was read.

Trial set for Katrina lawsuit against Allstate

Mon, 09 Apr 2007 00:00:00 -0700

After Hurricane Katrina demolished Robert and Merryl Weiss' home, the couple were paid hundred of thousands of dollars by their insurance company. But they say it isn't enough.

Jury selection was to start Monday in the Weisses' lawsuit against Allstate Insurance Co., only the second Katrina insurance case to be tried so far in a Louisiana federal court.

Allstate and other insurers say their policies cover a hurricane's wind but not its rising water. Hundreds of homeowners in Louisiana and Mississippi have sued their insurers for refusing to cover billions of dollars in damage from Katrina's storm surge.

The Weisses blame Katrina's winds and possibly a storm-spawned tornado for demolishing their Slidell home. But Allstate concluded that the hurricane's storm surge was responsible for most of the damage.

The couple had a federal flood insurance policy and a separate Allstate homeowner's policy with limits of $343,000 for the dwelling and $240,100 for personal property.

Allstate paid the Weisses $350,000 for coverage under their flood policy but only $29,483 for structural damage to their home and $14,787 for additional living expenses under their homeowner policy.

The Weisses, however, say at least two of their neighbors were paid the full limits of their Allstate policies after Katrina destroyed their homes. The couple accuses Allstate of bad faith for not paying their own claim in full.

In court papers, Allstate attorney Judy Barrasso accuses the couple of misrepresenting their claim by demanding that the company pay them at least $34,000 for a boathouse that Allstate says wasn't located on the insured property when Katrina hit on Aug. 29, 2005.

Northbrook, Ill.-based Allstate used the same defense tactic in February, during the first federal trial for a Louisiana homeowner's Katrina insurance suit. That trial ended abruptly when the plaintiffs dropped their lawsuit amid allegations they misrepresented their claim.

The Weisses say an Allstate adjuster told them in October 2005 that Katrina's winds destroyed their waterfront home on the north side of Lake Pontchartrain before storm surge washed away its remnants. Months later, however, the couple received a report from Allstate-contracted engineers that blamed storm surge for the home's destruction.

Rimkus Consulting Group., Inc., prepared the engineering report on the Weisses' home. One of the couple's attorneys, accused Rimkus of altering reports on storm-damaged homes so that claims could be denied and the company could generate more business with insurers.

"Rimkus engaged in a pattern of doing this," the couple's attorney said Thursday during a pretrial hearing before U.S. District Judge Sarah Vance.

Judge Says No to Class Action Against State Farm

Fri, 23 Mar 2007 00:00:00 -0700

A federal judge Thursday refused to allow a class action against State Farm Insurance Cos. over the insurer's denial of claims on Mississippi's Gulf Coast after Hurricane Katrina.

State Farm policyholder Judy Guice had asked U.S. District Judge L.T. Senter Jr. to permit her to join other policyholders whose homes were reduced to slabs by the August 2005 storm in a class action against the Bloomington, Ill.-based insurer.

But the judge, who heard testimony on the proposal during a Feb. 28 hearing in Gulfport, Miss., ruled Thursday that a class action for "slab cases" is "inconsistent with the requirements of due process."

"While each of the many 'slab cases' has in common the fact that the insured property was totally destroyed during Hurricane Katrina, the many other factual differences between the cases preclude the relief that Guice is seeking," Senter wrote in his three-page ruling.

In a class action, a court authorizes a single person or a small group of people to represent the interests of a larger group.

A trial for Guice's individual lawsuit against State Farm is scheduled to start in Gulfport in May.

During last month's hearing, several policyholders pleaded with Senter to find a speedy way to resolve hundreds of lawsuits that have been filed against State Farm and other insurers after Katrina.

The insurers say their policies cover damage from wind but not rising water, including storm surge.

Senter has expressed strong support for using court-ordered mediation to clear a backlog of federal lawsuits over Katrina damage. He said last month that a court-ordered mediation program, which has settled at least 47 of 88 cases heard so far, has exceeded his early expectations.

The judge, however, has solicited ideas on other ways to resolve cases in a "just, speedy and inexpensive" manner.

One of Guice's lawyers, argued during the hearing that the facts in each "slab case" against State Farm are essentially the same and should be heard together. State Farm says the cases must be tried separately because the facts of each claim are different.

Senter held a separate hearing Feb. 28 on the terms of a proposed settlement that calls for State Farm to pay at least $50 million to roughly 35,000 policyholders who didn't sue the company but could have their claims reopened.

After the hearing, a team of lawyers withdrew their request for Senter to sign off on the agreement, citing a legal "stalemate" and the judge's apparent reluctance to approve the settlement. Senter hasn't ruled on that earlier request to approve the deal.

Meanwhile, Mississippi Insurance Commissioner George Dale announced Monday that his office has reached a separate agreement with State Farm that calls for the company to re-evaluate and possibly pay thousands of claims.

In January, Senter presided over the first jury trial for a Katrina insurance lawsuit. He sided with policyholders Norman and Genevieve Broussard in that case, saying State Farm acted in a "grossly negligent way" by denying their claim.

Senter ruled that State Farm has the burden of proving how much damage resulted from flood water.

Settlement reached in Katrina lawsuit

Wed, 21 Mar 2007 00:00:00 -0700

State Farm settled out of court with a Biloxi, Miss., couple whose lawsuit over Hurricane Katrina damage was scheduled to be tried next week in federal court, a lawyer for the homeowners said Tuesday. Terms were not disclosed.

State Farm's settlement with John and Ann Untershine marks the fourth time this month that the Bloomington, Ill.-based insurer has settled out of court with policyholders whose homes were destroyed by Katrina.

An attorney who represented homeowners in all four cases set for trial this month against State Farm Fire and Casualty Co., said settlements are becoming easier to broker as more Katrina insurance cases are tried.

"Our hope all along is that once we tried a few of these cases, it would put both sides in a better position to evaluate these claims," he said.

State Farm spokesman Phil Supple said of the latest settlement that "we're pleased we were able to come to an agreement before trial and avoid potentially lengthy and costly litigation for our customers as well as our company."

Hundreds of policyholders in Mississippi coastal counties filed lawsuits after State Farm denied at least part of their claims. State Farm and other insurers say their policies cover damage from wind but not from water, including wind-driven storm surge.

Regulator: State Farm will re-examine Katrina claims

Tue, 20 Mar 2007 00:00:00 -0700

State Farm Fire & Casualty Co. will re-examine more than 35,000 policyholder claims filed after Hurricane Katrina and "make millions of dollars available" for additional payments, Mississippi Insurance Commissioner George Dale said Monday.

Dale said the agreement between his office and State Farm covers homeowners, renters and commercial claims in Mississippi's three coastal counties.

The agreement with the Bloomington, Ill.-based insurer includes claims that are in mediation, those that are the subject of pending lawsuits and those that have been settled.

"If they feel like they were mistreated and not handled properly, they, too, can have their case reopened and looked at by additional adjusters," Dale said of customers who already have settled.

Dale said State Farm agreed to the re-examination based on his agency's examination of its handling of Katrina claims and the recent withdrawal of a proposed class-action settlement involving the insurer.

On March 12, a team of lawyers who helped negotiate the proposed settlement withdrew their request for U.S. District Judge L.T. Senter to approve the deal.

Senter had been asked to approve a settlement calling for State Farm to pay at least $50 million to policyholders who haven't sued the company. That deal, reached in January, called for State Farm to reopen, review and possibly pay 35,000 to 36,000 claims.

"When I learned that the proposed class-action settlement had stalled, I felt it presented an opportunity to negotiate with State Farm to bring closure for coastal policyholders," Dale said Monday.

State Farm spokesman Phil Supple said the company's agreement with Dale "generally follows" the same terms as the agreement that Scruggs presented to Senter in January. The company has agreed to pay a minimum of $50 million, but "there's no ceiling" on the total amount paid, he said.

One key difference between the two deals, according to Supple, is that Dale's mediation program would aim to resolve any lingering disputes between State Farm and policyholders.

Katrina claims reopened

Tue, 20 Mar 2007 00:00:00 -0700

State Farm will "reopen and adjust" more than 35,000 Katrina claims, state Insurance Commissioner George Dale said Monday, including those still in litigation and mediation and those that were previously settled.

Dale said he took advantage of a break in class action litigation to craft a new deal with State Farm Fire and Casualty Co. Lawyers representing plaintiffs recently withdrew a proposed settlement agreement with State Farm.

State Farm spokesman Phil Supple on Monday said the main reason the company reached an agreement with Dale was that it "wants to avoid costly and lengthy litigation for our customers and ourselves." He said that while those who already settled claims "won't make more money than they actually lost," many will receive more money than previously offered.

"It will be new adjusters looking at it with fresh eyes and the luxury of hindsight," Supple said. "And there's another big motivating factor we want to resolve these claims."

Unlike the proposed court settlement, Supple said, the agreement with Dale would not include "binding arbitration," and "if you don't like what you hear, you can resume your litigation this is designed to open up a lot of options."

The agreement includes all residential and commercial policies in Hancock, Harrison and Jackson counties.

Supple said the company will be contacting policyholders directly by mail and running advertisements and talking with the news media within a couple of weeks. He said no 1-800 number has yet been established, but probably would be soon.

Supple said his company has agreed to set aside a minimum of $50 million for policyholders, but "there's no ceiling on that."

Dale, who is running for re-election this year, said, "This plan presents a consumer-friendly way to resolve these disputes and quickly put substantial amounts of money into the hands of those waiting to rebuild their homes and lives on the Coast."

Dale, in a press release on Monday, said the State Farm agreement and legislation passed last week by the state Legislature to fund and reform the state-sponsored insurance wind pool are steps "toward a more stable insurance environment."

Dale in the press release took credit for the wind pool legislation "that was presented by my office." But lawmakers and others who helped craft and pass the wind pool bill have criticized Dale, saying he was sluggish in providing any help. They accused his office of causing delays by not providing numbers or estimates key to drafting legislation. During one legislative hearing, he suggested lawmakers hold off on passing any wind pool legislation during the regular 2007 session.

Some have suggested Dale is only now - nearly two years after the storm trying to serve as a consumer advocate with insurance companies because he is running for re-election and faces a formidable opponent, state Sen. Mike Chaney, R-Vicksburg. Dale, the longest serving politician in the state after eight terms, has denied his re-election goals enter into any of his policy decisions.

Dale said Monday that he is continuing discussions with State Farm, which has stopped writing new homeowner policies in Mississippi, about reopening its market here and that "further announcements that will aid in stabilizing the Mississippi insurance market could come in following weeks."

New Orleans residents scramble to beat deadline for filing claims over Katrina levee failure

Tue, 27 Feb 2007 00:00:00 -0800

Residents scrambled to beat a deadline for filing court claims against the federal government and the Army Corps of Engineers for damage resulting from the failure of levees following Hurricane Katrina.

The corps says Thursday 1½ years after the storm hit is the deadline for the Katrina litigation claims to be submitted. Roughly 30,000 residents already had filed a claim as of late last week, but Thursday's deadline surprised many others whose homes and businesses were damaged or destroyed in the flooding following the storm.

On Monday, a steady procession of people stopped by the corps' Leake Avenue office to drop off their claims in person. Charles Brown, 47, said he didn't know about the deadline until Sunday.

“A lot of people aren't going to get their claims in,” said Brown, who has been living in a government-issued trailer since his Gentilly home was damaged by the storm.

Another claimant, Janet Long, 45, used the camera in her cell phone to photograph herself inserting the form in the drop box to prove that she filed a claim on her mother's behalf.

“It's aggravating, but it's worth it,” said Long, whose mother's home in the city's Lakeview neighborhood was flooded.

While many Mississippi homeowners harmed by Katrina are suing their insurers, much of the legal wrangling in Louisiana is over whether flooding from the failed levees was manmade rather than from a natural disaster.

One of the plaintiffs' attorneys, asked a federal judge to consider postponing the filing deadline. The plaintiffs argue that federal officials were reneging on an agreement to let claimants file until Aug. 29, 2007, the two-year anniversary.

“There is much anguish and uncertainty among all Hurricane Katrina victims concerning their rights,” the plantiffs' attorneys wrote. U.S. District Judge Stanwood Duval didn't immediately rule on the request.

1st La. federal insurance trial to start

Mon, 12 Feb 2007 00:00:00 -0800

Jury selection is set to start today in the first trial for one of the several thousand lawsuits that Louisiana homeowners filed against their insurers in federal court after Hurricane Katrina.

In their lawsuit against Allstate Indemnity Co., Lawrence Tomlinson and his wife, Elizabeth, accused the Northbrook, Ill.-based company of bad faith for allegedly failing to properly or promptly adjust their claim. The couple also claims the company underpaid them for wind damage.

Allstate, in turn, disputes the extent of the wind damage to the Tomlinsons' home in Marrero and accuses the couple of misrepresenting parts of their claim.

Tulane Law School professor Ed Sherman said a victory for the Tomlinsons could embolden other homeowners to sue their insurers, but he downplayed the possible legal implications for the roughly 4,000 other Katrina lawsuits awaiting trials here in federal court.

US Government Sued Over Levee Failure in New Orleans

Fri, 09 Feb 2007 00:00:00 -0800

In a significant blow to the federal government, a U.S. District Court judge ruled on Friday that the Army Corps of Engineers may be sued for negligence with regard to the flood damage that ravaged New Orleans after Hurricane Katrina. If the Corps is found liable in court, they may be responsible for billions of dollars in damages.

At the core of the issue is the controversial channel known as the Mississippi River Gulf Outlet (or MRGO), a waterway through the city that connects the Gulf of Mexico with the Mississippi River. Many observers believe that the channel served to increase storm surge levels, which ultimately led to the levee breaches that devastated the city.

In his ruling, Judge Stanwood Duval wrote that “plaintiffs have sued the Government contending that the MRGO caused catastrophic damage to the Lower Ninth Ward, New Orleans East, and St. Bernard Parish, and this result was the foreseeable consequences of at least two defective conditions known by the Army Corps for decades:(1) the destruction of the marshlands surrounding the MRGO which intensified an east-west storm surge which resulted in the flooding of much of New Orleans and (2) the funnel effect stemming from the MRGO’s faulty design which accelerated the force and strength of that surge. In essence, plaintiffs maintain that but for the MRGO, there would have not been the devastating flooding which damaged plaintiffs herein.”

The Corps has been seeking immunity from court challenges based on the Flood Control Act of 1928, which protects it from flood-damage liability caused by projects specifically related to flood control. “Plaintiffs contend that the MRGO is not a flood control project but an aid to navigation,” notes Judge Senter. “The nub of the issue before the court is whether the MRGO is a flood control project and whether waters that flow through the MRGO are floodwaters. Plaintiffs have alleged the MRGO was never planned, authorized, or designed to be anything other than a ‘navigable waterway.’ Thus, they maintain the immunity sought to be used to dismiss these claims is inapplicable as the cause of action has nothing to do with any flood control project.”

Senter added, “It is certainly not clear that the MRGO has morphed into a hybrid flood control project/navigational aid project. The Court will deny this motion and finds that plaintiffs’ request for further discovery is well-taken.”

Ultimately, he denied the government’s motion for dismissal, claiming that three major allegations by the plaintiffs were worthy of the court’s review: the failure of the Corps to consult with the U.S. Fish and Wildlife Service and the Louisiana Department of Wild Life and Fisheries with regard to the MRGO’s alignment; deficiencies in constructing and maintaining the MRGO and “the inability on this record to characterize such decisions as being grounded in policy”; and “whether there were non-policy based decisions made that failed to comport with standard engineering practices.”

Army Corps of Engineers May Be Sued Over Katrina Damage, Judge Rules

Mon, 05 Feb 2007 00:00:00 -0800

In a significant blow to the federal government, a U.S. District Court judge ruled on Friday that the Army Corps of Engineers may be sued for negligence with regard to the flood damage that ravaged New Orleans after Hurricane Katrina. If the Corps is found liable in court, they may be responsible for billions of dollars in damages.

At the core of the issue is the controversial channel known as the Mississippi River Gulf Outlet (or MRGO), a waterway through the city that connects the Gulf of Mexico with the Mississippi River. Many observers believe that the channel served to increase storm surge levels, which ultimately led to the levee breaches that devastated the city.

In his ruling, Judge Stanwood Duval wrote that “plaintiffs have sued the Government contending that the MRGO caused catastrophic damage to the Lower Ninth Ward, New Orleans East, and St. Bernard Parish, and this result was the foreseeable consequences of at least two defective conditions known by the Army Corps for decades:(1) the destruction of the marshlands surrounding the MRGO which intensified an east-west storm surge which resulted in the flooding of much of New Orleans and (2) the funnel effect stemming from the MRGO’s faulty design which accelerated the force and strength of that surge. In essence, plaintiffs maintain that but for the MRGO, there would have not been the devastating flooding which damaged plaintiffs herein.”

The Corps has been seeking immunity from court challenges based on the Flood Control Act of 1928, which protects it from flood-damage liability caused by projects specifically related to flood control. “Plaintiffs contend that the MRGO is not a flood control project but an aid to navigation,” notes Judge Senter. “The nub of the issue before the court is whether the MRGO is a flood control project and whether waters that flow through the MRGO are floodwaters…. Plaintiffs have alleged the MRGO was never planned, authorized, or designed to be anything other than a ‘navigable waterway.’ Thus, they maintain the immunity sought to be used to dismiss these claims is inapplicable as the cause of action has nothing to do with any flood control project.”

Senter added, “It is certainly not clear that the MRGO has morphed into a hybrid flood control project/navigational aid project. The Court will deny this motion and finds that plaintiffs’ request for further discovery is well-taken.”

Ultimately, he denied the government’s motion for dismissal, claiming that three major allegations by the plaintiffs were worthy of the court’s review: the failure of the Corps to consult with the U.S. Fish and Wildlife Service and the Louisiana Department of Wild Life and Fisheries with regard to the MRGO’s alignment; deficiencies in constructing and maintaining the MRGO and “the inability on this record to characterize such decisions as being grounded in policy”; and “whether there were non-policy based decisions made that failed to comport with standard engineering practices.”

Judge: Corps can be sued over flood

Sat, 03 Feb 2007 00:00:00 -0800

The Army Corps of Engineers can't assert immunity in a lawsuit over the catastrophic flooding following Hurricane Katrina, because of the plaintiffs' claim that flooding stemmed from the agency's negligence in fixing defects in the Mississippi River-Gulf Outlet navigation project that it had known of for years, a New Orleans federal court judge ruled Friday.

U.S. District Judge Stanwood Duval's ruling cleared the way for WDSU-TV anchorman Norman Robinson, a Lower 9th Ward couple and two St. Bernard Parish residents to press for trial of a lawsuit blaming Army Corps of Engineers negligence for the flooding that destroyed their homes in Hurricane Katrina.

The plaintiffs' legal team said the case could go to trial by early next year, after Duval rejected corps arguments that the case should be tossed out because federal law makes the agency immune from lawsuits over its flood control projects and policy decisions.

Duval said the suit brought by Robinson and his fellow plaintiffs targets not a flood control project but what it calls the corps' negligent failure to fix defects in a navigation project it built years ago, the 70-plus-mile-long Mississippi River-Gulf Outlet shipping channel.

That inaction, the suit claims, caused destruction of more than 100 square miles of wetlands that once protected the area from storms and turned the channel into a superhighway that funneled Katrina's levee-bursting tidal surges into their homes.

"This is a landmark victory for Katrina victims in New Orleans and St. Bernard Parish," said one of the plantiffs' lawyers, who heads the team of lawyers from 20 firms around the nation that filed the case last spring.

"In a courthouse in New Orleans, because of Katrina, a judge has stood up and said the (U.S.) Constitution means what it says the government can't take your property without just compensation," the attorney said.

Individuals hoping to share in whatever compensation the corps may be ordered to pay must, by Aug. 31, send the corps what's called a Form 95 signaling their intent to sue the agency.

One of the plaintiffs'attorney representative on a committee helping plan for trial of all Katrina-related case on Duval's docket, said the MR-GO case ruling will be useful for court challenges to more than 100 corps-built levees around the nation that a recent study deemed unsafe.

But in the near term, a plantiffs' attorney said, Friday's ruling in the MR-GO case could buttress his plans for a new federal lawsuit aimed at holding the corps responsible for the 17th Street Canal floodwall break that left 80 percent of New Orleans flooded after Katrina.

One of the plantiffs' attorneys said the suit will claim that the corps gave the city Sewerage & Water Board a permit to dredge the 17th Street canal, work that allowed water to undermine soil beneath the floodwall, ultimately causing the wall to break.

"We believe (the canal dredging) was a navigation project and not a flood control project," said a plaintiffs' attorney.

Judge OKs Katrina flood suit vs. Corps

Fri, 02 Feb 2007 00:00:00 -0800

Residents whose homes were flooded during Hurricane Katrina can sue the Army Corps of Engineers over claims the agency ignored warnings about defects in a nearby navigation channel, a federal judge ruled Friday.

The ruling, one of the first significant decisions in a set of cases over what caused the flooding, may force the Corps to hand over documents about the management of the channel.

"Now we will have an opportunity to see what goes on behind closed doors," said a trial lawyer for the plaintiffs.

Eugene Pawlik, a Corps spokesman in Washington, said the agency's lawyers are reviewing the ruling but did not have any immediate comment.

The Corps and federal government had argued they were immune to legal challenges because decisions about the waterway were based in policy.

But U.S. District Judge Stanwood Duval said there is no way to know that at this point, and said plaintiffs should get a hearing for their allegations.

At issue is a 76-mile shipping channel built in the early 1960s as a shortcut to New Orleans. For years, environmentalists and others have criticized the Mississippi River-Gulf Outlet because it has eroded enormous tracts of wetlands and increased the threat of flooding.

During Katrina, storm surge traveled up the channel and overwhelmed levees protecting St. Bernard Parish and eastern New Orleans, according to scientists. The Corps of Engineers has acknowledged that the channel contributed to the region's flooding and the agency wants to guard against future flooding by building flood gates.

Judge Rejects State Farm Settlement

Mon, 29 Jan 2007 00:00:00 -0800

In another apparent legal blow to State Farm Fire & Causalty Co., U.S. District Judge L.T. Senter rejected a Mississippi class-action settlement related to Hurricane Katrina damage, claiming that the proposed settlement favored the needs of the insurance company over those of the policyholders.

Senter asked for more information before he would approve the deal. “In the absence of substantially more information than I now have before me, I am unable to say, even preliminarily, that the proposed settlement establishes a procedure that is fair, just, balanced, or reasonable,” he said in his decision.

The initial agreement submitted to Senter for approval called for $80 million to be used to settle the 640 existing lawsuits in Mississippi, with an additional amount of at least $50 million earmarked for settlement of reopened claims. (There are roughly 35,000 policyholders who are eligible to have their claims revisited.) However, the two parts of the agreement were submitted as separate settlements. Senter hinted that the class-action settlement should include both current litigants as well as other policyholders.

“There is no evidence that State Farm will evaluate the class members’ claims in any way different from the way these claims have already been evaluated by State Farm in the past adjustment process for these claims,” Senter said.

He added, “To be a true global settlement, any proposed arrangement should take all of the State Farm claims into consideration, and such a settlement agreement should represent a realistic compromise that both parties will find attractive. It would be wise for the parties who have proposed the current class settlement to broaden the scope of the settlement discussions to include the representatives of those parties currently engaged in litigation.”

Mississippi Attorney General Jim Hood had been working with State Farm representatives to reach the settlement. Hood filed a major civil suit against the insurer for fraudulently denying claims and was also overseeing a criminal investigation undertaken by the state.

“Although it was contemplated that the federal court was better prepared to handle this type of process, our office did not negotiate the terms of the proposed federal court class action. In fact, our office had reservations about some of the terms of the class agreed to by the plaintiffs and State Farm,” Hood said in a statement.

“Nevertheless, I knew that Judge Senter would make sure that the class was a fair procedure for all. I am confident that Judge Senter will make the plaintiffs and State Farm fix the problems he has raised in his order.”

Insurer admits wind led to hurricane damage

Wed, 24 Jan 2007 00:00:00 -0800

A historic agreement with State Farm Fire & Casualty Co. means up to $500 million in payments to Mississippi policyholders previously dissatisfied with their Hurricane Katrina insurance settlements.

Mississippi Attorney General Jim Hood said Tuesday that State Farm will pay 50 percent of policy limits to certain homeowners left with only slabs. State Farm previously had denied those claims, maintaining water led to the destruction and the company was unable to find any separate wind damage covered under its policies.

The two sides signed a settlement agreement filed Tuesday in Hinds County Chancery Court, which also brings an end to the lawsuit Hood filed shortly after Katrina to seek coverage for policyholders whose homes were subject to tidal surge.

"It's not the best thing since sliced bread," Hood said. "I wanted to get everybody 100 percent. This is a settlement option primarily for the 8,000 people hit by storm surge who don't have lawyers."

Hood said State Farm has about 800 slab claims on the coast and about 9,000 policyholders whose homes were hit by storm surge. The company, by its own count, had a total of more than 32,000 Coast Katrina claims filed as of February 2006.

He later summed up what he sees as the benefits of the settlement. "This is just an option. It will get some money on the ground quick. It will stabilize the insurance market and it will help in our economic development. We've got to rebuild our homes and the people's lives."

State Farm released a statement that read, in part, "We believe this is in the best interests of our policyholders and State Farm, and the effort to rebuild Mississippi."

Under the settlement, State Farm has agreed to review the claims of any Coast policyholder who opts in. The settlement also gives policyholders the right to see their State Farm file. If a policyholder is dissatisfied with State Farm's offer, they can go to binding court arbitration with the company.

The settlement

Here's a glance at Mississippi's settlement with State Farm Fire & Casualty Co. in a lawsuit over Hurricane Katrina damage, according to Attorney General Jim Hood:

For a homeowner left only with a slab, State Farm is to make an initial offer to pay at least 50 percent of the homeowner's policy value. Policy holders with less damage are to receive offers for other levels of payment.

The offers are to be made in writing. Each policyholder is to have 18 business days, from the date of the offer, to either accept or reject it.

Those who accept the offer agree not to pursue further legal action in the claim involved. State Farm then has five business days to pay the agreed upon amount.

Those who reject the offer retain the option to pursue their own lawsuit in hopes of getting more money.

Those who neither accept nor reject the offer within the 18 days may still pursue their own lawsuit, but they may not seek punitive damages.

State Farm Loses Benchmark Katrina Case

Sat, 13 Jan 2007 00:00:00 -0800

In a ruling that may have ramifications on hundreds of other lawsuits, a federal judge in Mississippi declared that State Farm Fire & Casualty Co. is liable for damage to a couple’s Biloxi home following Hurricane Katrina. While the insurance company is responsible for paying $223,292 in damages to the home, the key part of the ruling was the award by a jury of $2.5 million in punitive damages.

The ruling by U.S. District Judge L.T. Senter Jr. may be troubling news for State Farm and other insurers who are claiming that they are not responsible for damage caused by flooding. In the case of Norman and Genevieve Broussard, State Farm had contended that they were not responsible for the damages because they were caused by water. However, the judge sided with the Broussards, who claimed that the damage was mostly due to excessive winds. Senter left the decision about punitive damages to a jury, and the jury decided to award punitive damages because State Farm had initially (and illegally) denied the Broussards’ insurance claim.

Senter’s ruling put the burden of proof on State Farm to show that water was the primary cause of the damage. In Senter’s mind, the company failed to establish that fact and therefore is liable for the damages. With hundreds of Katrina-related lawsuits still pending, the outcome of this case may eventually cost insurance companies billions of dollars in payout.

As reported earlier this week, State Farm is also currently negotiating a settlement of more than 600 Katrina lawsuits in the state of Mississippi, to the tune of $80 million or more. Today’s ruling may give more leverage to the plaintiffs in negotiations.

State Farm Told to Pay Gulf Claim

Fri, 12 Jan 2007 00:00:00 -0800

A federal jury ordered State Farm insurance yesterday to pay a $2.5 million penalty for refusing to cover damages to a Mississippi couple’s house that was destroyed in Hurricane Katrina, throwing into question settlement talks intended to resolve hundreds of lawsuits filed after the 2005 storm.

The eight jurors in Federal District Court in Gulfport, Miss., reached a unanimous decision yesterday less than three hours after Judge L. T. Senter Jr. ruled that State Farm failed to prove that the damage to the house in Biloxi had come from surging floodwaters and, thus, was not covered by the homeowner’s policy.

Lawyers for the homeowners, had argued that the house was knocked off its foundation and torn apart by high winds a hazard covered as a fundamental part of home insurance coverage and that a wall of water driving in from the Gulf of Mexico had scattered the debris.

In a statement from the bench, Judge Senter said that State Farm had presented no “legal or arguable reason for refusing to pay the plaintiffs’ claim,” Bloomberg News reported.

The judge then ordered State Farm to pay the full value of the policy, $233, 292, and told the jury to determine whether the insurer should pay punitive damages and, if so, how much. The homeowners had sought $5 million in addition to their coverage.

Yesterday’s decision was the first by a jury in a sprawling dispute that sprang up after thousands of homes were damaged or destroyed by Hurricane Katrina and the insurers were accused of narrowly interpreting coverage and vastly underpaying claims. More than 2,000 lawsuits have been filed.

The verdict came as State Farm acknowledged it had started settlement talks with 639 other homeowners in Mississippi. The homeoener's lawsuit was not included in those discussions. Those talks continued yesterday amid signs that progress was being made.

But, lawyers following the talks said the midafternoon announcement of the $2.5 million verdict was like a lightning strike captivating, but not immediately easy to interpret.

A spokesman for State Farm, Phil Supple, said the insurer was “surprised and disappointed” by yesterday’s decision.

“We believe the expert testimony” of State Farm witnesses “supported a different result,” Mr. Supple said, adding that “an appeal of the decision is likely.”

Mr. Supple acknowledged that State Farm had been sued after it had refused to pay the family anything for their loss.

After Hurricane Katrina, State Farm and other insurers balked at paying claims, arguing that much of the damage to houses was caused by flooding, which is not covered by a typical homeowner policy. Many insurers also contended that if any damage to a home had come from water, it nullified the basic coverage for wind damage.

Judge Senter agreed in a ruling that the insurers were not obligated to pay for flood damage. But he said that when both wind and water damaged or destroyed a house, it was the burden of the insurance company to prove how much of the loss was because of water and pay for any wind damage.

A clerk for Judge Senter said in a telephone interview from Gulfport that experts for State Farm acknowledged in court documents that some damage to the homeowner’s home had come from wind. But, he said, “they did not offer evidence during trial” showing how much of the damage was from water and how much from wind, as Judge Senter had required.

Ultimately, he said, the judge ruled that State Farm was liable for all the damage because the insurer had not provided enough evidence “the jury could use to segregate” the wind from the water damage.

State Farm would not comment on the impact of the verdict. But lawyers who have been following the talks said they expected strong reactions from the participants that could accelerate the negotiations or to blow them apart.

But one lawyer who spoke on condition of anonymity, called the decision a “very unsettling” and “potentially destabilizing event” that could drive State Farm from the bargaining table.

The jury decision could also lead policyholders to conclude that instead of settling they should hold out in the hope that a jury would award them millions of dollars in punitive damages, said Randy Maniloff, a lawyer in Philadelphia who represents insurance companies.

Many lawyers and insurance executives have said in interviews that a settlement by State Farm, the largest insurer in Mississippi and the nation, would probably lead other insurers to follow suit. That would potentially bring hundreds of millions of dollars into the hands of homeowners to start rebuilding.

A settlement would probably yield less money than many homeowners thought they could get from a jury, but with the huge number of pending cases, it could be years before they got their day in court.

The Mississippi attorney general, Jim Hood, has filed a civil lawsuit against State Farm and other insurers and had began investigating possible criminal charges against State Farm for the way that it handled claims.

As a part of the settlement of the 639 lawsuits alreadybrought by other lawyers, the attorney general’s lawsuit and criminal investigation would be dropped.

Jury: Punitive damages in Katrina case

Thu, 11 Jan 2007 00:00:00 -0800

A jury on Thursday awarded $2.5 million in punitive damages to a couple who sued State Farm Fire & Casualty Co. for denying their claim after Hurricane Katrina, a decision that could benefit hundreds of other homeowners challenging insurers for refusing to cover billion of dollars in storm damage.

A federal judge only hours earlier had taken part of the case out of jurors' hands before they awarded punitive damages to State Farm policyholders Norman and Genevieve Broussard.

U.S. District Judge L.T. Senter Jr. ruled Thursday morning that State Farm is liable for $223,292 in damage Hurricane Katrina caused to the Broussard's home. Senter left it to a jury to decide whether to award punitive damages.

Senter's decision to make a directed verdict rather than let the jury decide the entire case appeared to surprise everyone in the courtroom. After he explained his ruling, Senter ordered a recess to give attorneys time "to get over the shock."

Some of Senter's earlier rulings in other Katrina cases have favored the insurance industry, but his decision Thursday calls into question the companies' refusal to cover billions of dollars in damage from Katrina's storm surge.

The homeowers sued State Farm for refusing to pay for any damage to their home, which Katrina reduced to a slab. The couple, who wanted State Farm to pay for the full insured value of their home plus $5 million in punitive damages, claimed that a tornado during the hurricane destroyed their home. State Farm blamed all the damage on Katrina's storm surge.

State Farm and other insurers say their homeowner policies cover damage from wind but not from water, and that the policies exclude damage that could have been caused by a combination of both, even if hurricane-force winds preceded a storm's rising water.

Senter, however, ruled that State Farm couldn't prove that Katrina's storm surge was responsible for all of the damage to the Broussards' home. The judge also said the testimony failed to establish how much damage was caused by wind and how much resulted from storm surge.

"We are surprised and disappointed by the court's ruling," said State Farm spokesman Phil Supple. "The expert testimony supported a different result. After the conclusion of this case, we will evaluate our next steps in this lawsuit."

In his closing argument Thursday, one of the homerowners attorneys, said State Farm had breached their contract "in a bad way" by denying their claim. State Farm "acted like a chiseler," he said, adding, "The pocketbook is what they listen to."

State Farm attorney John Banahan urged jurors to "use your head and your heart" in deciding on punitive damages and to reject an attempt by the Broussards' attorney to demonize the company as an "evil empire."

Robert Hartwig, chief economist for the Insurance Information Institute in New York, said before the jury announced its decision that a punitive damage award would be "distressing" for insurers.

"It adds even more cost and more uncertainty to the other problems that already exist in the Mississippi homeowners insurance market," he said.

The homerowners' case isn't directly involved in recent settlement talks between State Farm Fire & Casualty Co., Mississippi Attorney General Jim Hood and policyholders' lawyers.

People with direct knowledge of the settlement talks told The Associated Press this week that State Farm, Mississippi's largest home insurer, is considering paying hundreds of millions of dollars to settle more than 600 lawsuits and resolve thousands of other disputed claims.

Jury awards $2.5 million in punitive damages

Thu, 11 Jan 2007 00:00:00 -0800

A jury awarded a Mississippi couple $2.5 million in punitive damages in their case against State Farm Fire and Casualty on Thursday afternoon. Today's ruling is considered a sweeping decision for policyholiders along the Coast but State Farm doesn't see it that way.

State Farm has indicated it will not be handling its other claims any differently because of the situation and have another case set for trial shortly.

Earlier in the day, U.S. District Court Judge L.T. Senter Jr. ordered State Farm Fire and Casualty Co. to pay policy limits to a Biloxi policyholder because the company failed to prove how much damage was caused by Hurricane Katrina's storm surge.

Senter also denied State Farm's motion to dismiss the possibility of punitive damages against the company. Although attorneys for the Broussards were only able to establish that wind may have damaged the property and State Farm conceded there could have been wind damage to the roof, the Broussards will be able to argue State Farm should be punished for not meeting its obligation to fully investigate what was owed under the policy.

State Farm attorneys retired to a conference room where they're discussing what happened.

About an hour after the decision, State Farm released this statement: "We are surprised and disappointed by the court's ruling. The expert testimony supported a different result. After the conclusion of this case, we will evaluate our next steps."

State Farm's own expert said Wednesday there was a 75 percent chance the wind had caused anywhere from no damage to 35 percent damage to the roof shingles. State Farm told the jury Wednesday the company was unable to determine what the cost of wind damage might have been.

It was State Farm's burden to show what portion of damage it could attribute to storm surge.

Everyone appeared surprised by the sweeping decision in a case that was being closely monitored by attorneys for both sides but did not appear to be going well for the policyholders.

Policyholders' attorneys expected the sweeping decision to affect not only cases against State Farm but also against other insurance companies.

About 1,000 cases are pending in U.S. district court.

State Farm must pay $2.5M in Katrina case

Thu, 11 Jan 2007 00:00:00 -0800

A Mississippi jury has ordered State Farm to pay $2.5 million in punitive damages to a Broussard, Louisiana, couple whose house was destroyed during Hurricane Katrina, according to a spokesman in the judge's office.

State Farm had initially denied the couple's insurance claim.

Earlier in the day, Judge L. T. Senter Jr. determined that the plaintiffs were entitled to policy benefits for the loss of their home and its contents in the amount of more than $200,000, the spokesman said.

The decision could set the tone for future Katrina cases in Senter's courtroom. Judge Senter has more than 300 Katrina-related insurance cases on the docket, said his spokesman, who did not want his name used. The next case is scheduled to be tried starting Jan. 22, and the trial schedule is expected to pick up in the next few weeks, according to the spokesman.

State Farm said it had not expected the decision.

"We are disappointed and surprised by the court's ruling," a company spokesman remarked. "The expert testimony supported a different result. After the conclusion of the case, we will evaluate our next steps."

Parker Waichman Alonso LLP Retained by Hundreds of Hurricane Katrina Victims Whose Insurance Claims Have Been Denied

Thu, 11 Jan 2007 00:00:00 -0800

Parker Waichman Alonso LLP (www.yourlawyer.com) announced that it has been retained by hundreds of clients in Alabama, Florida, Louisiana and Mississippi whose insurance claims related to damage caused by Hurricane Katrina were denied. Under state and federal laws, insurance companies are required to resolve claims with their insureds in good faith and with fair dealing. Unfortunately, thousands of insurance policyholders are unable to put their lives back together because of widespread improper damage claim denials. Parker Waichman Alonso LLP is assisting policyholders whose property insurance claims have been denied, or who have not yet filed a claim but who plan to in the future. The firm is providing legal representation to these policyholders in order to quickly obtain the compensation their insurance coverage provides.

If your Katrina-related insurance claim was denied, or if you plan to file a claim, you can request a free case evaluation by visiting http://www.katrinaclaimdenial.com or http://www.yourlawyer.com/topics/overview/Katrina_Insurance_Claims . Case evaluations are also available by calling Parker Waichman Alonso LLP at 1-800-LAW-INFO (1-800-529-4636).

Alabama, Louisiana, Mississippi, and a majority of other states, have laws governing how insurance companies must deal with claimants. In fact, Louisiana makes it mandatory for insurers to make a written offer to resolve a property damage claim within 30 days after receipt of a "satisfactory proof of loss" for the claim. If the insurance company fails to do this, the company may be liable for penalties of up to 25% on the amount due. Other states have similar laws punishing insurance companies that unfairly deny or delay payment on valid claims.

"Insurance companies often use their own narrow interpretations of policy language to deny legitimate claims from individual policyholders," said Jerrold Parker, founding partner of Parker Waichman Alonso LLP. "Unfortunately, the insurance industry has been successful in convincing many claimants that their damage is not covered by their insurance policy. Policyholders should not rely on the conclusions of their insurance company without having their claim and insurance policy thoroughly reviewed by an attorney. Insurance companies tend to treat claimants more fairly when they are being represented by an attorney."

About Parker Waichman Alonso LLP

Parker Waichman Alonso LLP is a leading consumer fraud, products liability and personal injury law firm that represents plaintiffs nationwide. Parker Waichman Alonso LLP has assisted thousands of clients in receiving fair compensation for denied insurance claims, securities fraud, and injuries resulting from defective medical devices and medications. In addition to representing victims of bad faith insurance denials, Parker & Waichman, LLP represents thousands of individuals injured by Guidant Defibrillators, Drug Coated Coronary Stents, Vioxx, Fosamax, Ketek, ReNu with MoistureLoc, Ortho Evra and many other defective drugs and medical products. For more information on Parker Waichman Alonso LLP, please visit: www.yourlawyer.com or call (800) LAW-INFO.

CONTACT: Parker Waichman Alonso LLP
          David Krangle, ESQ.
          (800) LAW-INFO
          (800) 529-4636
          info@yourlawyer.com
          www.yourlawyer.com

New York Times: State Farm Nears Settlement with Mississippi Katrina Victims

Tue, 09 Jan 2007 00:00:00 -0800

According to a report in today’s New York Times, State Farm Fire & Casualty Co. is close to reaching a huge settlement of hundreds of lawsuits related to Hurricane Katrina’s destruction of the Mississippi Gulf Coast.

The Times said that the $80 million settlement is expected to address 639 lawsuits. In addition, there is also a provision in the settlement that calls for the review of previously settled claims made by policyholders who did not file suit. The company’s expenditure may grow into hundreds of millions of dollars once these previously handled claims are reopened.
“State Farm, under the tentative accord, would provide an average of about $125,000 to homeowners who filed lawsuits, although the payments would range from as little as about $2,000 to about $2 million,” the paper noted. “The treatment of those cases would serve as a guide for increasing payments to any of the 35,000 homeowners who request a review of their claim, according to lawyers privy to the details.”

The proposed settlement only applies to cases in Mississippi and does not include suits filed in Louisiana or Alabama. In all likelihood, however, this settlement will be a model for State Farm cases in the other Katrina-damaged states and may wind up being the model that is followed by Allstate and other affected insurance carriers as well.

The settlement is awaiting the approval of Mississippi Attorney General Jim Hood, who had filed a civil action against the company after the hurricane because they had refused to cover flood damages and other effects of the storm surge. It is quite probable that Hood will be forced to drop that suit and any other criminal investigation as part of the settlement. Once Hood signs off on the settlement, it will go before a federal judge for final approval.

State Farm tries to reach accord on Katrina claims

Tue, 09 Jan 2007 00:00:00 -0800

State Farm Fire & Casualty Co. is negotiating a multimillion-dollar settlement in Mississippi on thousands of lawsuits and other disputed policyholder claims from Hurricane Katrina, people with direct knowledge of the negotiations told The Associated Press on Monday.

State Farm lawyers met with Mississippi Atty. Gen. Jim Hood as recently as Friday to discuss a possible settlement, which would resolve a civil lawsuit Hood filed against the company for refusing to cover damage from Katrina's storm surge.

A mass settlement would be the first of its kind to follow the wave of litigation spawned by Katrina. The Mississippi settlement would not involve any cases filed by State Farm policyholders in Louisiana or Alabama.

A spokeswoman for Hood declined to comment. State Farm spokesman Phil Supple said that while no settlement has been reached with Hood, "we continue to talk and search for ways to bring these events to a resolution."

Bloomington, Ill.-based State Farm, Mississippi's largest home insurer, says it already has paid roughly $1.1 billion for about 84,000 property claims in the state, not including flood insurance.

However, many policyholders with damage contend that they received nothing or only small payoffs from their homeowner policies because insurers blamed their losses on storm surge, which is not covered, rather than on the hurricane's winds.

A deal has not been completed, but the people with knowledge of the talks said both sides were nearing an agreement that could be worth hundreds of millions of dollars to tens of thousands of State Farm policyholders in Mississippi whose claims were denied after Katrina.

State Farm agreed "in principle" to pay an undisclosed amount of money to more than 600 policyholders, including Sen. Trent Lott (R-Miss.), who sued State Farm after the August 2005 storm, according to these people.

An agreement also could benefit thousands of other State Farm policyholders in Mississippi who have not sued State Farm.

A "class action resolution" component of the proposed deal calls for the company to review the claims filed by roughly 35,000 policyholders who live in Mississippi's three coastal counties but who did not file lawsuits against State Farm for refusing to cover storm damage.

After reviewing those claims, the company would be required to make new offers and any disputes would be heard by an arbitrator, whose decision would be binding.

State Farm would pay a minimum of $50 million to these policyholders after their claims are reviewed, but the company could end up paying hundreds of millions of dollars more than that because there would not be a cap on the amount, the people with knowledge of the talks said.

A deal not only would settle Hood's lawsuit against State Farm but also would resolve his criminal probe into whether State Farm fraudulently denied policyholders' claims.

The attorney general is not the only one who has to sign off on a deal. A federal judge also must approve the terms of any settlement.

Besides State Farm, Hood also sued Allstate, Mississippi Farm Bureau Insurance Cos., USAA and Nationwide.

Attorneys have accused State Farm of pressuring its engineers to alter reports and change their conclusions on whether Katrina's wind or water was responsible for damage to homes.

Hood has been investigating allegations that State Farm and other insurers have fraudulently denied claims after Katrina. State Farm attorneys also say a federal grand jury has been probing similar allegations.

But the civil cases against State Farm appeared to be weakened by a series of court rulings that favored the insurance industry, including a landmark decision this summer in the first trial for a Katrina insurance case.

State Farm may reopen claims

Tue, 09 Jan 2007 00:00:00 -0800

Thousands of State Farm Fire & Casualty Co. policyholders on the Mississippi Coast could reopen their claims under a tentative settlement the company is working out with Attorney General Jim Hood and a private attorney, who also is close to settlement on about 640 lawsuits his group filed on behalf of homeowners the company insures.

"I am working day and night attempting to get our Coastal residents a fair shake in the insurance litigation," Hood said in a written statement Monday evening, after the Sun Herald broke news of the settlement. "It would not help our negotiations to disclose any details at this time."

Terms are undisclosed in the tentative settlement of the Scruggs cases.

State Farm would reserve a minimum of $50 million to reconsider Katrina claims filed by thousands of other South Mississippi homeowners, said a source close to the negotiations. The company would notify the policyholders in writing that they can have their claims reconsidered.

Policyholders who decided to participate would go to binding arbitration with State Farm if they were unable to agree on settlement amounts.

State Farm would consider claims within the parameters of its homeowners' policy, which the company maintains does not cover damage from tidal surge. However, thousands of policyholders in areas subject to tidal surge are still trying to collect for what they believe was wind damage to their properties.

The source said a settlement hinges on Hood's signature. Weeks after Katrina, Hood filed a lawsuit against State Farm and other major insurers for refusing to fully cover Katrina property damage. Hood also launched a criminal investigation at least one year ago over how State Farm and other insurers handled Katrina claims.

The source said Hood would have to agree to drop both the civil and criminal proceedings for State Farm to accept the settlement. No charges have yet resulted from the criminal probe.

Not everyone is happy about the settlement negotiations. A Biloxi attorney who has her own lawsuit pending against State Farm, said after hearing the news:

"I think it's really important for the public to understand what they're trying to do here. To link together dismissal of a criminal investigation with insurance claims that should have been paid months and months ago is extremely troubling. It just shows more and more the need to investigate what State Farm did, who was involved and what the details are.

"I won't be a party to (a settlement). I will not be bought off by State Farm."

Two State Farm policyholders who also are represented by another attorney, U.S. Sen. Trent Lott and U.S. Rep. Gene Taylor of Mississippi, have said they believe the company denied or minimized claims by blaming water rather than wind. Taylor thinks insurers charged the National Flood Insurance Program for damage they should have covered.

However, State Farm says it has investigated each claim on its merits and paid what is owed under its policies. The company has paid $1.1 billion on 84,000 claims filed statewide.

The company also has relied on language in its policy that purports to say wind damage is not covered when water contributes. U.S. District Judge L.T. Senter Jr. has ruled that that language is ambiguous and can't be enforced.

Senter has urged attorneys on both sides to find just and timely ways to resolve more than 1,000 Katrina cases pending in his court against insurance companies.

A spokesman for State Farm, Phil Supple, said: "At this point, we have no settlement. We continue to talk and to search for ways to bring these events to a resolution consistent with Judge Senter's call earlier this fall. We continue to pursue a just, prompt and efficient resolution."

In addition to the lawsuits, State Farm has more than 100 other lawsuits pending. Supple said State Farm would "absolutely" like to see the cases resolved.

State Farm may reopen claims

Tue, 09 Jan 2007 00:00:00 -0800

State Farm may reopen claims

Tue, 09 Jan 2007 00:00:00 -0800

State Farm may reopen claims

Tue, 09 Jan 2007 00:00:00 -0800

State Farm may reopen claims

Tue, 09 Jan 2007 00:00:00 -0800

St. Bernard Parish joins MR-GO lawsuit

Thu, 31 Aug 2006 00:00:00 -0700

St. Bernard Parish government leaders have long blamed the Mississippi River-Gulf Outlet for the devastating flooding that swamped some 25,000 homes after Hurricane Katrina.

On Wednesday, they announced that the parish had formally joined a class-action federal lawsuit that aims to force the closure of MR-GO.
That suit, filed in July against the Army Corps of Engineers, seeks to have the shipping channel closed and also asks for the appointment of a panel to recommend methods to address any dangers posed by the channel, including rebuilding wetlands that critics say were destroyed by MR-GO.

I feel good. I feel we did the right thing," St. Bernard Parish Councilman Mark Madary said Wednesday.

A corps spokesman said the corps could not comment on pending litigation.

The class-action suit was initially filed by eight residents of St. Bernard Parish and New Orleans, including Madary and New Orleans City Councilwoman Cynthia Willard-Lewis, who represents the 9th Ward and eastern New Orleans.

The St. Bernard Parish Council last October authorized parish government to consult with lawyers regarding a lawsuit. Although some of the water entering St. Bernard Parish came from breaches in the Industrial Canal levees, parish officials contend MR-GO acted as a funnel for Hurricane Katrina's surge to swamp the parish.

Katrina's surge, estimated at more than 20 feet, poured over and through sections of the 17-foot-tall levee along the shipping canal. In previous interviews, corps representatives have said Katrina's surge was so powerful that it would have flooded the area regardless of the presence of MR-GO.

Madary said the council last week was unanimous in its decision to join the lawsuit.

"How do you justify what it's done to the people?" he asked.

Besides Madary, Williard-Lewis and the St. Bernard Parish Council, other plaintiffs in the suit are St. Bernard Parish residents Charles "Pete" Savoy, Gerald Nevle and Pam Nevle, 9th Ward resident Pam Dashiell and eastern New Orleans residents Shawn and Nga Tran.

Litigation group seeks Katrina victims

Tue, 29 Aug 2006 00:00:00 -0700

Fourteen law firms,banding together as the Levee Litigation Group -urged residents of Jefferson, Orleans and St. Bernard parishes today to file forms protecting their rights to recover damages from the U.S. Army Corps of Engineers.

The litigation group, led by attorney Joe Bruno, held a press conference this morning on the steps of the Federal District Courthouse in New Orleans, where they discussed plans to sue the corps for failing to secure levees properly against flooding prompted by Hurricane Katrina a year ago.

At www.leveelaw.com, the Standard Form 95 needed to take legal action against the corps and its contractors can be downloaded and completed. Be forewarned: Completing attachments to the form could lead to retaining the litigation group as your attorney.

Other firms joining Bruno & Bruno in the suit include Lambert & Nelson, Gainsburgh Benjamin, Walter Dumas, Fayard & Honeycutt, Parker & Waichman, and deGravelles Palmintier.

State Farm underpaid on purpose, ex-workers say

Sun, 27 Aug 2006 00:00:00 -0700

Two sisters who handled Hurricane Katrina claims for State Farm have turned over records to federal and state investigators because they say the company purposely underpaid or denied coverage for wind damage.

Cori and Kerri Rigsby believe State Farm Fire & Casualty Co. wanted to write off as much damage as possible to the hurricane's unprecedented storm surge covered under the National Flood Insurance Program.

Wind damage covered under State Farm homeowner policies was minimized, they say, through the use of biased or altered engineers' reports that attributed all or most damage to surge.

The company hoped to further benefit from policy language that says wind damage is not covered when water contributes.

Claims managers were told to memorize the language, the Rigsbys said.

"This thing hit, and they went into panic mode," said Kerri Rigsby, who now serves as a consultant, along with her sister, to a group of lawyers suing insurance companies over Katrina claims.

"They thought, 'If we have to go in and pay these claims, it's going to be billions. And we just can't do that.' And I think they truly believed it was water, and they were going to make sure that's how it went."

State Farm representatives in Bloomington, Ill., the home office, say what the women describe would be contrary to the company's claims practices.

"We have retained a third party to conduct an extensive review of Katrina, which would include interviews of these persons," spokesman Dick Luedke said. "Unfortunately, their lawyers haven't allowed our investigation team to meet with them."

He added, "In the process of handling hundreds of thousands of claims from Katrina, I would be surprised to find we did not make a few honest mistakes."

James Shortley, claims manager for the National Flood Insurance Program in Washington, said his agency has found no evidence that State Farm or other insurers overcharged the federal government.

Half a dozen FEMA inspectors spot-checked properties along the Gulf Coast, he said.

However, Rep. Gene Taylor, D-Miss., a State Farm customer who is suing the company, believes NFIP officials and private insurers are too cozy.

He said State Farm found no wind damage at his Bay St. Louis home, which he thinks is preposterous.

The National Flood Insurance Program has paid $2.4 billion on 18,934 residential and commercial claims statewide. As of July 31, State Farm had paid just over $1 billion on 79,386 residential, commercial and boat claims statewide.

In past catastrophes, the Rigsby sisters found their claims work for State Farm rewarding.

They were employed as claims adjusters, trained professionals who determine the cause of property damage and the amount owed under the policy. They were employed by damage assessment firm E.A. Renfro, but have handled State Farm claims almost exclusively in recent years.

They were glad to come back to the Mississippi Coast, their home, to help State Farm with Katrina claims. Both were claims managers.

They worked out of State Farm offices and each supervised a team of claims adjusters.

The first departure from standard procedure, they said, was State Farm's decision to order engineers' reports on all severely damaged properties subjected to tidal surge and wind. Normally, trained adjusters examine the property.

The Rigsbys said flood claims were paid before engineers even apportioned wind and water damage.

Once the Rigsbys decided State Farm was intentionally mistreating policyholders, they said that they wanted to do something about it.

They spent an entire weekend printing out computer records from State Farm's system. The task was so large they recruited three friends to help.

"This thing hit, and they went into panic mode."

Court upholds hurricane-insurance laws

Sat, 26 Aug 2006 00:00:00 -0700

The Louisiana Supreme Court upheld two new state laws yesterday, giving policyholders more time to sue their insurers or file claims over damage from hurricanes Katrina and Rita.

The Louisiana attorney general’s office had asked the high court to review the laws after a state judge said they were constitutional. Although it is unusual for the party that wins a ruling to seek a review from a higher court, Attorney General Charles Foti said he wanted the matter solidly settled.

The one-year extension is "both appropriate and reasonable in order to protect the rights of the citizens of Louisiana and their general welfare," Justice Chet Traylor wrote in the ruling.

The ruling means that homeowners, renters, condo owners, drivers with auto insurance and other nonfederal flood-insurance policyholders have until Sept. 1, 2007, to file lawsuits resulting from Katrina damages and up to Oct. 1, 2007, for Rita damages.

"These acts simply give victims of Katrina and Rita additional time to access the courts if they need to," Megan Terrell, an attorney for the state, told the high court.

An attorney for Allstate Insurance Co., the second-largest homeowner insurer in Louisiana, said the laws could hinder the recovery by sending a message to the business community that the legislature can change existing contracts.

"The problem is the legislature is saying, ‘We are going to change the agreement in a hurricane-prone state,’ " said Philip Franco. "That doesn’t encourage rebuilding."

Ten of the state’s major insurers were listed as defendants in the suit.

Lawmakers had approved the new laws in the latest legislative session, extending the claims deadlines for Katrina and Rita victims until two years after the 2005 storms struck on Aug. 29 and Sept. 24.

The laws apply to homeowners, personal-property, tenant, condominium and commercialproperty insurance and certain automobile-, crop- and livestock-insurance policies. Terrell said the laws don’t apply to the National Flood Insurance Program, which is governed by federal law.

Yesterday, the justices questioned attorneys about what flood damage might be covered and the length of time allowed by Louisiana to sue over settlements.

Justice Bernette Johnson said Texas has a four-year period, and Mississippi and Florida had three-year periods.

The justices made it clear they wanted to move quickly when they ordered a lowercourt judge to listen to arguments and decide the case on Wednesday.

ABC's "20/20" claims State Farm cheated Katrina victims

Fri, 25 Aug 2006 00:00:00 -0700

State Farm Insurance has been accused of cheating policyholders out of claims filed for damages sustained by Hurricane Katrina.

Two sisters who worked as independent adjusters for the Bloomington-based insurance company told ABC News that they witnessed State Farm supervisors altering claims to avoid payouts to policyholders in Mississippi, according to ABC’s Web site.

The network is scheduled to air its report on Friday night’s “20/20” program.

Kerry and Cori Rigsby, both whom have worked for State Farm for eight years, told ABC reporters that State Farm employees in Biloxi, Miss., and Gulfport, Miss., pushed for reports to conclude that Katrina-related damages were caused by water and not wind. Water damage is not covered by State Farm policies.

Insurance companies including State Farm and Allstate have come under fire recently by Mississippi and Louisiana state authorities who have accused the industry of underpaying or denying damage claims from Hurricane Katrina.

Dick Luedke, a spokesman for State Farm, said the company was unable to comment on a report that it has not seen, however, a lawyer for the insurer was interviewed for the piece.

The Rigsbys said they have provided the Federal Bureau of Investigations and Mississippi state authorities with internal company documents supporting their claims.

Insurers told to extend deadline

Wed, 12 Jul 2006 00:00:00 -0700

Louisiana Insurance Commissioner Jim Donelon ordered property insurance providers Tuesday to give homeowners and business owners two years to file lawsuits against them.

If insurers don't grant the extension by Aug. 1, Donelon said, he will use all means necessary as the state's chief insurance regulator to force them to do it, including possible fines and revocation of the insurance companies' certificates of authority to operate in Louisiana. The action comes a month after Donelon asked the companies to extend the deadlines voluntarily. Only a few companies did so.

Insurance companies had little time to react to the afternoon announcement.

State Farm, the state's largest homeowners insurer, did not return phone calls seeking comment. Allstate Insurance Co., the state's second-largest property insurer, said it would "consider any requests made by the Department of Insurance."

Farm Bureau of Louisiana, the state's fifth-largest insurer, said it would comply with the request, but that it doesn't think the lawsuit issue is relevant to its customers because most of the company's claims are settled. St. Paul Travelers said it had not yet made a decision.

Unlike other Gulf Coast states, which allow people as long as six years to file lawsuits over insurance claims, Louisiana gives its residents only one year to file in court to resolve disputes. Trial lawyers and the state Department of Insurance say they believe Louisiana's statute of limitations is the shortest in the country.

"I think this is reasonable, and under the circumstances it is justified," Donelon said. "I'm sure the industry will not be happy with my order, but I think consumers in our state are deserving of this protection."

Many property owners were kept from their homes and businesses by flooding and mandatory evacuation orders after Hurricane Katrina, and overwhelmed insurance companies were delayed in starting the adjustment process. As a result, many homeowners are still too early in the process to know whether the insurance settlements they have received are adequate to repair damage to their homes.

Policyholders can pursue their claims after the one-year anniversary of the storm, but not in court. Consumer advocates say the end of the statute of limitations effectively ends insurance company payouts, because the companies know homeowners have no recourse. Insurance industry groups have said carriers will continue to work in good faith with their policyholders, but acknowledged that the deadline is significant.

Court ruling requested

Donelon's directive could sidestep the constitutional questions that have arisen over two bills that passed the state Legislature last month and were signed into law by Gov. Kathleen Blanco.

House Bill 1302, sponsored by Rep. Tim Burns, R-Mandeville, and House Bill 1289, sponsored by Rep. Arthur Morrell, D-New Orleans, would allow property owners two years to file lawsuits over property damage claims as a result of Hurricanes Katrina and Rita. But because the bills would be retroactive, and thus possibly unconstitutional, they instruct Attorney General Charles Foti to get a Supreme Court ruling on the laws before the Aug. 29 anniversary of Katrina.

Foti filed a petition for declaratory judgment Monday in the 19th Judicial District Court in Baton Rouge.

But Donelon said he was afraid the bills wouldn't make it through the court system in time, so on Tuesday he directed insurance companies to extend their statutes of limitations voluntarily.

"I'm ordering them to do it," Donelon said. "That is the only secure and definite way that consumers can be protected."

Because the insurance companies would be voluntarily changing their contracts with the people and businesses they insure, Donelon said, he believes his directive will avoid any constitutionality questions.

Voluntary approach

In May, the American Insurance Association bristled at the legislative interference and said it preferred to let insurance companies provide extensions to policyholders voluntarily.

On June 5, Donelon asked insurance companies to voluntarily extend the lawsuit deadline to two years. Of the more than 100 companies that write property insurance in the state, Donelon had few takers.

The Louisiana Citizens Property Insurance Corp., the state-sponsored insurer of last resort and the state's third-largest homeowners insurance carrier, had previously extended its deadline to two years for hurricane claims. On Tuesday, four other companies: Fidelity National Insurance Co., the American Modern Insurance Group, the Assurant Group and the Balboa Insurance Group announced they would follow suit.

Donelon said he was "disappointed" with the response, but insurers told him they were leery of setting a precedent by changing their terms with policyholders.

Donelon said he has had no official word from major insurers, but that he is optimistic that it is in companies' best interests to comply with an order from the state's chief insurance regulator.

"I expect that most insurers will comply," Donelon said.

Donelon said consumers should monitor the Insurance Department's Web site, www.ldi.state.la.us, for a list of insurance companies that have agreed to extend the deadline, or call 1 (800) 259-5300 for updates. If consumers don't find their insurance carrier on the Web site by Aug. 1, Donelon said, it's time to hire an attorney.

"To the extent that they don't come by Aug. 1, my advice will be, if you're insured by ABC Insurance Co., go get a lawyer," Donelon said.

Robert E. Kleinpeter, president of the Louisiana Trial Lawyers Association, said that because insurers posted record profits in 2005, and because the Insurance Department cut them some slack in adjusting claims in a timely fashion because they had trouble mobilizing adjusters and accessing properties, it's only fair that they offer the same consideration to their customers.

"If they needed more time, then their policyholders need more time," said Kleinpeter, adding that extending the deadline will actually deter lawsuits because it will give people more time to make repairs and settle their claims without having to file suit to preserve their rights. "This is a big issue."

La. mandates hurricane claims extension

Wed, 12 Jul 2006 00:00:00 -0700

Louisiana Insurance Commissioner Jim Donelon has ordered insurers in the state to give policyholders more time to file lawsuits over unresolved hurricane claims after most insurers failed to respond to his request that they voluntarily extend the deadline.

The commissioner last month requested that admitted and surplus lines insurers give policyholders two years in which to file lawsuits related to unresolved claims from hurricanes Katrina and Rita. Most homeowner policies in the state limit the policyholder’s right to file a claim to a period of 12 months after the loss. The longer period was proposed so both sides could have more time to work on an unprecedented number of claims from the storms.

In his directive issued Tuesday, the commissioner established the new prescriptive period for Katrina claims as Aug. 30, 2007, and the period for claims related to Rita as ending Sept. 25, 2007.

Insurers who fail to comply with the directive will be subject to "any and all enforcement authority" held by the commissioner, the directive said. A spokeswoman for the Louisiana Department of Insurance said that means insurers could face fines or license revocations if they ignore the directive.

The one-year prescriptive period is established by Louisiana law, but the commissioner maintains that he has the authority to change that deadline and that change does not run afoul of the state law.

The commissioner said in a statement that it appears Louisiana is the only state with a one-year statute of limitations on property damage lawsuits. Other states have prescriptive periods that are two years or longer, he said.

Groundbreaking Trial Could Help Decide Katrina Insurance Claims

Tue, 11 Jul 2006 00:00:00 -0700

A federal judge on Monday began hearing a groundbreaking trial that could signal whether thousands of people whose homes were destroyed by Hurricane Katrina can receive payouts for losses their insurance companies claim were caused by flooding.

Attorneys for Paul and Julie Leonard claim the couple was misled by their insurance agent and then denied much of their claim for their Pascagoula, Miss., home without a full review of the facts.

Nationwide Mutual Insurance Co., argued that while wind damage is covered by its homeowners' policies, damage from flooding is excluded, including Katrina's wind-driven storm surge.

The trial, being heard without a jury by U.S. District Judge L.T. Senter Jr., is the first among hundreds of lawsuits that have been filed by Gulf Coast homeowners challenging insurance companies over the wind-versus-water issue. Plaintiffs attorneys hope a ruling in the homeowners' favor would pressure insurance companies to pay out hundreds of millions of dollars in settlements for homeowners whose claims have been rejected.

Paul Leonard asked a Nationwide Mutual agent in 1999 if he should get flood coverage. "You don't need that," the agent replied, according to one of the Leonards' lawyers.

The agent did not want to write a flood policy "because he didn't make much money off of it," attorney Zach Scruggs said in opening statements.

The palntiff's lawyers, said Nationwide paid $1,600 to the Leonards for $130,000 worth of damage to their home, several hundred yards from the Mississippi Sound near the eastern end of the state's shoreline. The palntiff's lawyer said that was $500 less than the premiums the family paid to Nationwide that year.

"Nationwide actually made money off the Leonards as a result of Hurricane Katrina," the palntif's lawyer stated..

Leonard, the first witness, said before Katrina, he had "always considered flood as coming from a river. Storm surge doesn't happen unless there's a hurricane."

Under questioning by the insurance company's attorney, Leonard said he did not need separate flood coverage because his agent "explained I had hurricane coverage."

Asked if the agent had explained why he did not need flood insurance, Leonard responded: "No, sir. I always had a hurricane policy. Why would I need flood on top of hurricane (coverage)?"

The first floor of the Leonard home received 5 feet of water during the hurricane, forcing the family to live on the second floor during repairs. Leonard said he has spent $30,000 of his own money on repairs, clothing and other needs since Katrina.

The palntiff's lawyer, said weather data shows Katrina's 140 mph wind hit the Mississippi coast three hours before any storm surge flooding. He said Nationwide's experts ignored that evidence and wrongly blamed water for the vast majority of the damage to the Leonards' house.

An attorney in Ohio, said Nationwide has paid out $230 million for 21,000 claims in Mississippi since Katrina and an additional $220 million for its handling of 1,800 flood insurance claims under the National Flood Insurance Program.

Nationwide spokesman Joe Case said the company looks "at each claim on a case-by-case basis."

La. Commissioner Seeks to Extend Time to Sue Over Katrina/Rita Claims

Tue, 06 Jun 2006 00:00:00 -0700

Louisiana Commissioner of Insurance Jim Donelon has issued Advisory Letter 06-04 to the approximate 100 companies with homeowners insurance policies in Louisiana, requesting their cooperation in extending from one to two years the prescriptive period for policyholders with Hurricane Katrina and/or Rita claims, the Louisiana Department of Insurance reported.

Announcing the advisory at a press conference on June 5, Donelon said a Louisiana policyholder's right to file suit on a homeowners insurance claim is limited to 12 months in most cases.

"Given the unprecedented number of claims following Hurricanes Katrina and Rita, one year is simply not going to be enough time for many policyholders and insurance companies to work out a settlement that is in the best interest of both," Donelon said.

Under applicable Louisiana law, there are at least two ways for an admitted insurer or surplus lines insurer to extend the one-year prescriptive period to two years. The insurer can file with the Department of Insurance either (1) an endorsement or (2) a stipulation, stating that a change in the prescriptive period is being made.

"I am asking insurers to file with the Department on or before August 1, 2006, the necessary paperwork to put this extension into effect," Donelon added.

"At a luncheon in Lafayette today, I ended a month-long, statewide storm awareness tour. As I talked to policyholders and insurance industry representatives throughout the state, I became certain that extending the prescriptive period is the right thing to do," Commissioner Donelon said at the press conference.

To assist policyholders, the names of insurance companies who agree to extend the prescriptive period will be listed on the Department's Web site and publicized through a variety of mediums.

Plans didn't account for area's subsidence

Mon, 01 May 2006 00:00:00 -0700

As they completed sections of the New Orleans area's hurricane protection system in the 1980s and '90s, Army Corps of Engineers officials assured residents the structures had been raised to standards mandated by Congress.

That, however, was mostly a legal fiction, documents and interviews with current and former corps employees show.

The corps' levees and floodwalls might have met specifications in the plans, but the engineers involved knew the measuring stick being used was out of date.

In fact, many sections of the system were a foot or more below authorized heights because the local office of the corps made a decision in 1985 not to use updated elevation values for projects then under way.

Some engineers familiar with the history of the project, such as the former head of the office's survey section, Wayne Weiser, say the decision was a planned deception that left people unprotected.

Others, including J. David Rogers, a forensic engineer working with one of the independent investigations of the Hurricane Katrina disaster, say the corps probably did the best it could in dealing with a complicated and sprawling project.

But they agree the story highlights a critical problem that continues to bedevil the corps and stands in the way of adequate hurricane protection for New Orleans even today.

"When you look into this story," Rogers said, "you'll see a lot of things that should have been addressed a long time ago, but are still out there at the bottom of a lot of problems."

Critical decision

The story begins in 1985, when Frederick Chatry was in one of the hottest seats at the corps. He was chief of engineering for the New Orleans District, the man charged with using a set budget to raise permanent hurricane protection for a city built on a constantly sinking landscape.

The decision he faced that July was a classic example. The National Geodetic Survey, the government agency that establishes baseline elevations for the nation, had just issued a new set of values for its benchmarks in New Orleans. Most of them were lower than the values Chatry's office had been using to build about 300 miles of levees and floodwalls in the region since the project was authorized in 1965. That meant what had been 12 feet high before the National Geodetic Survey announcement might now be 11 feet or less.

What to do?

Chatry, who is deceased, tried a Solomonic approach. He told his office to use the new heights for any future projects but to stick with the original elevations on projects under way, which included the local hurricane protection work that was started in 1965 and was still many years from completion.

That decision is now the topic of heated debate, because although it allowed Chatry to complete large sections of the project, it also meant that most of it would be below the heights authorized by Congress.

In a memo to superiors at the corps' Vicksburg, Miss., office, which he would later lead, Chatry made clear that the reasons for his decisions were based in pragmatism. If he were to mandate use of the new levels on a project that was only partially completed, the corps would be faced with one of two problems: Either the new sections would be higher than those already completed, resulting in uneven levels of protection and spots where structures of two different heights would meet, creating weak spots in the design; or the corps would have to go back and raise the old sections to the newly established elevations, a process that would be both time-consuming and expensive, requiring more financing from Congress and local governments.

Also, he noted that since the National Geodetic Survey revision, local agencies had done their own releveling and had come up with figures that were even lower. Where does one stop?

So he decided.

"Modification of projects which have been completed will not be considered," Chatry wrote. "The level of precision in the current data and the practical difficulty and cost of changing such projects combine to mandate this course of action at least for the foreseeable future."

Furthermore, the hurricane protection projects still under construction would stick with the levels used when they were started in the 1970s.

'False sense of security'

To Weiser, the decision meant residents never got the protection ordered by Congress and assumed by the public.

"The public never got the protection they thought they were getting, it gave them a false sense of security, and it caught up with them last year," Weiser said.

The decision "ordered us to ignore the problems caused by subsidence. All the projects completed under that rule that were certified to be in compliance with the (congressionally) authorized heights were significantly inadequate."

Weiser, who worked for Chatry at the time, said he urged him to order an immediate releveling of all the benchmarks in the New Orleans district and point out the problems to Congress for financing to build the projects to the correct height.

"Never happened," he said. "It would have meant that 90 percent of the work that had been done was 'unfinished' and had to be completed. It was the correct thing to do, but you're talking millions of dollars.

"Well, Mr. Chatry was my boss he was as high as I could go. That was it."

Pressing forward

Al Naomi, senior project manager for the corps' New Orleans office, said it was the practical choice.

"I'm not saying I endorse his decision, but I'm saying he probably saw this as what he had to do to continue to finish the projects," Naomi said. "To apply the new levels would mean going back and correcting most of what you had done. And to do that, you would have had to ask for more funding not just from Congress, but from the local partners -- most of whom were already having trouble meeting their current obligations.

"This project was authorized in 1965, and it was already 1985, and it wasn't near finished. He was thinking, 'If we apply the (new levels), we could be waiting another 10 or 20 years to finish this thing, which means the people of New Orleans wait that long for protection.'

"And that wouldn't be the end of it. We all know this place subsides. So who's to say a new level won't be issued in another five years, and you're going back again?"

As the system was completed, most of the engineers involved knew the heights published were based on National Geodetic Survey levels that had been out of date for many years. That knowledge was shared by most private engineers and surveyors in the area, who rely on the corps to provide the latest survey levels for their own jobs.

"We're required by law to give out the latest levels published in the (National Geodetic Survey) book, and that's what we gave to anyone who called," Weiser said. "But those people knew any (corps) projects that dated before 1983 were using levels that were way out of date. They knew because they ran into them all the time."

A constant problem

They also knew because any surveying in Louisiana is a risky business because of the problem of constant subsidence. Even the latest National Geodetic Survey levels could be out of date within a year.

Roy Dokka, an LSU geologist who recently completed updating levels across the state for the National Geodetic Survey, said the lack of precise data in the state is so notorious is has become the source of black humor among surveyors. "The old joke goes, 'All the elevations in Louisiana were legal, but they were just wrong,' "Dokka said. "When you first read Chatry's letter, you're shocked until you know more about the background and the state.

"I'm not saying he made the right choice. I'm saying it's more understandable when you know the conditions here."

But until recently that reality was not recognized by the plans handed to the corps, Naomi and others said. The 1965 legislation authorizing the Lake Pontchartrain and Vicinity Hurricane Protection Project made no allowances for subsidence. There is no language or financing available for the constant repairs and raising that engineers working in New Orleans know will be required. That tradition was changed in 1986, when Congress authorized the West Bank Hurricane Protection Plan, which included allowances for subsidence.

Rogers, part of the independent levee investigation team financed by grants from the National Science Foundation and the University of California, Berkeley, said the various agencies working on future protection for south Louisiana must include similar allowances.

"Chatry's situation really highlights the problem the corps is facing down there trying to provide the level of protection people are expecting and assuming they have," he said. "Congress has never really addressed subsidence as a key issue. They give (the corps) a budget for building a project, and they think when they cut the ribbon it's over when it's not. Subsidence down there never stops, so you're never finished."

It is unclear how Chatry's decision affected protection during Katrina. The corps' ongoing investigation into the failures during Katrina already has reported many structures were below authorized heights when the storm hit. Those differences ranged from a few inches to as much as 2 feet on the Industrial Canal, where floodwalls that were on the books at 14 feet above sea level measured only 12 feet above sea level.

Naomi said the corps in 2001 surveyed all levees using the latest National Geodetic Survey levels, and found most were below design heights. But he said none that failed during Katrina were more than 1 foot lower than the authorized height. He said that since Katrina's surge was measured at up to 3 feet above those heights, the discrepancies played little or no part in the disaster. However, Weiser said levees that were overtopped but stayed intact could have stopped flooding earlier if they had been built and maintained at the authorized heights.

Either way, Naomi said, New Orleans' fate during Katrina was not written by Chatry in 1985, but by Congress 20 years earlier.

"This story was written when Congress decided on the level of protection for this city back in 1965," he said. "When they decided on the level of protection for flooding form the river, they spent billions. When they decided on a level of protection for hurricanes, they hundreds of millions.

"(Chatry's ) standards were the standards to what was authorized. Those standards did not protect against a storm like Katrina."

Hurricane Bad Faith Denied Claim Lawyer

Mon, 01 May 2006 00:00:00 -0700

Hurricane Claims

Every hurricane season residents in the Caribbean, Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina and Texas can be affected. Parker & Waichman, LLP has worked with victims of hurricanes Jeanne, Ivan, Frances, Charley, Wilma, Rita and Katrina towards getting their insurance claims paid.

Homeowners repeatedly face considerable hurdles when trying to get their insurance claims paid. If a homeowner believes (s)he has an insurance problem, having a lawyer on your side before contacting your insurance company is the most useful method. Insurance companies have a tendency to treat claimants more fairly when the playing field is equal and the insurer is aware that the claimant has legal representation.

Insurance companies are obligated by law to handle your claim with good faith and fair dealing. Nearly all states have laws governing how insurers deal with claimants and call for insurers to make a written offer to settle a property damage claim within 30 days after receipt of a "satisfactory proof of loss" for the claim. Then again, even when insurance companies counter within 30 days, they reject claims left and right.

Homeowners insurance normally does not cover floods resulting from a hurricane; instead the National Flood Insurance Program often covers flood damage. A large amount of homeowner’s policies enclose a sentence excluding flood, surface water, waves, tidal water, overflow of a body of water or spray from any of these. Homeowners insurance does cover things such as wind damage and damage from wind-driven rain. Insurers use the disclaimer about flooding to get out of paying claims on homes damaged only by wind.

Many residents fight with their insurance companies over whether the damage was caused by flooding, wind, or wind-driven water from storm surges. Many inland residents find that their claims are denied and that their insurers cite flooding disclaimers. The denial of homeowner’s claims in non-flooded areas is considered a bad faith practice.

In Florida, the State Legislature approved a law that joined the Florida Residential Property and Casualty Joint Underwriting Association (FRPCJUA) and the Florida Windstorm Underwriting Association (FWUA) to establish the Citizens Property Insurance Corporation (Citizens). Citizens makes available insurance to homeowners in high-risk areas and others who cannot find coverage in the open private insurance market. However, this insurance and the federal flood insurance are costly, and even for residents of non-high-risk areas, claims are being denied in bad faith.

If you are a victim of a denied hurricane insurance claim or have not filled your claim, please fill out the form at the right for a free case evaluation by a qualified hurricane claim attorney.