Judge gives Katrina flood victims hope
as posted at www.ap.org
Wed, Nov. 29, 2006
NEW ORLEANS — A federal judge has ruled that thousands of homeowners flooded after Hurricane Katrina can move forward with their attempts to seek compensation from insurers, a ruling that runs counter to a previous federal court decision.
U.S. District Judge Stanwood Duval Jr. on Monday sided with New Orleans homeowners who argued that the language excluding water damage from some insurance policies is ambiguous.
Under Louisiana law and precedent, Duval ruled, insurance companies must prove that a clause excluding coverage applies. Without such an exclusion, provisions are generally construed in favor of coverage, he said.
Duval found that language used by most insurance companies doesn't differentiate between a flood caused by an act of God — such as excessive rainfall — and a flood caused by an act of man, which would include the levee breaches following Katrina's landfall on Aug. 29, 2005.
The ruling contradicts an August decision by a federal judge in Gulfport, Miss., who ruled that a couple could not collect from their insurer because their policy doesn't cover damages from floodwaters or storm surges.
Duval's ruling covered several cases that had been consolidated because they were similar. He immediately sent the decision to the 5th U.S. Circuit Court of Appeals for review.
"Right now, we're on the verge of an opportunity to get a recovery for people who have lost everything and who didn't have flood insurance or didn't have enough flood insurance," plaintiffs' attorney Joseph Bruno said.
Allstate Insurance Co., one of the companies named in the suit, plans to appeal Duval's decision to the 5th Circuit, said Mike Siemienas, a spokesman for Allstate.
"Allstate disagrees with the judge's conclusion that its policy exclusions do not apply to water damage resulting from the flooding in the New Orleans area," he said.
Although Duval's ruling covers several cases, the judge has not decided to certify it as a class-action suit yet. A decision on whether to do that probably won't come until the appellate court rules on Duval's decision, Bruno said.
If the suit becomes a class action, it could grow exponentially, he said, because it could include everyone whose home sustained storm-related water damage.
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.
•••••••••••••••••••••