Plaintiffs Crowd Civil Courthouse
They're filing suits now, just in case
as posted at www.nola.com
Tuesday, August 29, 2006
by Rebecca Mowbray
Scores of people lined up in the Orleans Parish Civil District Courthouse Monday morning to file lawsuits against their insurers before today's one-year anniversary of Hurricane Katrina, even though the Louisiana Supreme Court on Friday upheld efforts by the state to extend the deadline for filing such a suit to two years after the storm.
Lawyers, clerks and individuals filing on their own behalf jammed the fourth-floor clerk's office, and spilled out into the hallway.
Courier Chris Harper makes frequent trips to the courthouse for law firms, and he said he'd never seen anything like this. "Before you could just walk in and give it to them," Harper said. "Now, the line is backed up to the elevators."
The flurry of activity reflected the anxiety surrounding the deadline for policyholders to file lawsuits over their insurance settlements as well as the importance of insurance payouts as people fight for resources to rebuild their lives. Insurers in Louisiana have paid out only $14.5 billion in Louisiana on non-flood insured property losses from Katrina that were expected to total $20.8 billion.
Louisiana allows only one year to settle insurance claims, the shortest statute of limitations of any Gulf Coast state, creating a deadline of Aug. 29, 2006, for Katrina claims, but efforts by the Louisiana Department of Insurance and by the Legislature to extend that deadline by an additional year were upheld by the Louisiana Supreme Court on Friday.
That didn't stop a torrent of lawsuits arriving at Civil District Court. Clerk of Court Dale Atkins, who was helping to direct filing traffic and answer questions Monday, said that filings steadily increased throughout last week. A week ago Monday , there were 90 lawsuits filed, 32 of them hurricane litigation, or 36 percent. On Friday, 565 lawsuits were filed, 373 of them hurricane litigation, or 66 percent.
All in all, 1,134 suits were filed last week alone, some 58 percent of them hurricane-related, compared with 1,388 suits for the entire month of August 2005, Atkins said.
By the time the deadline was upheld, many homeowners already had their legal efforts in progress, and decided to file to be on the safe side.
"I just can't get them to resolve it," said Algiers resident Jessie Rose, who prepared her lawsuit against St. Paul Travelers Insurance herself with the help of the Loyola Law Clinic. "They'll pay for a couple of tiles on the roof, but not the whole roof, yet it's leaking. And I don't know what else, because I haven't been able to get anyone to start the work, so I don't know what else is wrong."
Others said they distrusted that the extension would hold, or said they were filing because the extensions may not cover damages against insurers for acting in bad faith or malpractice claims against insurance agents.
New Orleans attorney Ann Steinhardt, a sole practitioner, said she filed seven insurance lawsuits last week and eight Monday, plus two flood insurance lawsuits last week and two flood lawsuits Monday. Claims against the National Flood Insurance Program are filed in federal court, where the filing deadline is one year after the claim or supplemental request was denied. Steinhardt said she was filing before Aug. 29 to be safe.
"Because of the insurance companies' past behavior, I don't trust them," Steinhardt said.
The insurance industry says that 95 percent of homeowners claims have been resolved, and it's proud to have resolved so many claims in the most expensive insurance event in U.S. history when the destruction made it so tough for adjusters to operate.
"The industry feels very good about a 95 percent claims settlement rate in the wake of this hurricane, which was unprecedented in both its severity and the widespread damage that was done," said Robert Hartwig, executive vice president and chief economist for the Insurance Information Institute, a trade group. "There's simply no analogy in American history. There were 1.7 million claims across six states. It was an extraordinary challenge for insurers."
While the insurance industry might consider 95 percent of claims closed, Louisiana Insurance Commissioner Jim Donelon says many homeowners probably wouldn't agree with that characterization. Some 7,949 people have requested mediation for Katrina and Rita claims through the Louisiana Department of Insurance, and another 200 to 250 continue to sign up each week.
But Hartwig said that insurers are upset that Louisiana officials tampered with insurance contracts by extending the lawsuit deadline. Industry lawyers are working on the issue now, and he predicted that Friday's Louisiana Supreme Court decision won't be the last word.
"There is a very good chance that that decision from the Louisiana Supreme Court will be appealed to a federal court, a very high federal court, and it may be overturned," Hartwig said. "If the federal court overturns the state court, there would be issues for individuals who filed after that deadline."
Anticipating that the insurance industry may try to challenge the Supreme Court extension ruling, New Orleans attorney Joe Bruno filed a lawsuit that seeks class action status on behalf of more than 4,000 homeowners against 161 insurance companies Monday afternoon. Bruno said he bundled the claims as a class action as a last resort in case the extension of the prescriptive period for filing suits is ultimately overturned, because class action suits preserve legal rights for all others similarly situated.
"For people that I don't represent, we've made the class action designation," Bruno said. "We're trying to be of some help."
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Rebecca Mowbray can be reached at rmowbray@timespicayune.com or (504) 826-3417.
United Policyholders is a non-profit organization founded in 1991 and dedicated to educating the public on insurance issues and consumer rights. UP publishes educational materials and serves as a resource for individual and business policyholders and residents of communities with insurance problems. UP’s Amicus Project provides information to courts of law to support policyholders’ legal rights. UP unites policyholders and their advocates by sharing information. Write to UP at 110 Pacific Ave., PMB 262, San Francisco, CA. 94111, call us at (510) 763-9740, or visit our website at www.unitedpolicyholders.org.
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