Insurance Dispute Lawyer Blog

Summary Judgment Prevails Against Hurricane Ike Damages

Tue, 14 May 2013 09:25:24 -0600

A recent United States Court of Appeals for the Fifth Circuit case set out an extensive definition and explanation of summary judgment. Summary judgment occurs when there are “no genuine dispute[s] as to any material fact.” That is, both parties agree with all of the facts that are used to determine the case. A “material fact” is one that could affect the overall outcome of the case based on the applicable law. When summary judgments are appealed, the appeals court uses a de novo standard--they look at all the facts and apply the same standards as the lower court would. They examine the facts “in the light most favorable to the nonmoving party.” However, the court will not just accept unsubstantiated allegations in favor of the nonmoving party; the claims have to have some support. The nonmoving party is the party that won summary judgment in the lower court, so the moving party is the party that is contesting the summary judgment.

When examining a summary judgment on appeal, the moving party has the burden of proving that summary judgment is inappropriate. In order to do that, the moving party must show that there is some dispute regarding a material fact. The burden is somewhat light if the moving party would not have the burden if the case went to trial. Instead, the moving party would only have to show, “that there is an absence of evidence to support the nonmoving party's case” instead of proving that the evidence may weigh in the moving party's favor. Once the moving party has proven their burden, then the nonmoving party will take the burden and must counter the moving party's arguments.

In the Fifth Circuit case, a homeowner alleged that Hurricane Ike caused damage to his roof that his insurance company should cover. His roof was leaking and he pointed out that the wind likely damaged his roof, causing water leaks. State Farm, his insurance company, completed an evaluation of the roof and determined that he was missing four shingles, had four damaged ridge caps and had acquired one fresh interior water spot. State Farm concluded that most of the damage that the plaintiff complained of was actually damage that could have only occurred over several years due to deterioration or faulty workmanship when the roof was installed. The State Farm insurance policy did not cover these two latter instances, but provided reimbursement for the damaged shingles, ridge caps, and the new water spot in the ceiling. State Farm awarded roughly $450.00.

The plaintiff was very unhappy with this result and conducted damage evaluations of its own, each of which concluded that the damage was considerably higher than State Farm provided. However, these damage reports did not mention how the damage was caused; they just explained how much it would cost to fix the water damage as a whole. State Farm also conducted damage evaluations that separated any damage likely caused by Hurricane Ike and damage caused by leaking over time. Their evaluations were consistent with what they already awarded the plaintiff.

Based on the various evaluations, the lower court granted summary judgment for State Farm and the Fifth Circuit affirmed that decision. The Fifth Circuit found that the plaintiff, as the moving party, could not meet his burden to override the summary judgment determination. The Court found that the evaluations as to any damage that Hurricane Ike may have caused were extremely important in this case. Since the only wind damage would have been related to the missing shingles, damaged ridge caps, and small water spot, and State Farm already paid for that, the Court found no reason to override the summary judgment.

Once summary judgment has been awarded, it is somewhat difficult to overcome on appeal.

Accident in Parking Lot Leads to Appeal for Shared Responsibility

Sun, 12 May 2013 08:46:16 -0600

A recent case in the Parish of Lafayette, Louisiana, demonstrates conflictive viewpoints and the shifting burden of responsibility that can take place in an automobile accident, much less one taking place in a parking lot. The plaintiff, Ms. Duhon, was driving her 2009 Lincoln MKX in a parking lot on property in Lafayette when a 2006 Toyota Sequoia driven by Ms. Foley entered the parking lot from Ambassador Caffery Parkway and the vehicles collided. The defendant was insured by State Farm Mutual Automobile Insurance Company (State Farm).

Ms. Duhon filed suit against Ms. Foley and her insurer, State Farm, seeking recovery for (1) the out of pocket deductible she paid for repairs to her vehicle; (2) the out of pocket rental expenses she paid; and, (3) the diminution in value of her vehicle as a result of this accident. However, the trial court held a bench trial and ruled in favor of Ms. Foley, finding Ms. Duhon one hundred percent at fault for the incident, eventually leading to an appeal.

Ms. Duhon asserts the trial court erred in finding her at fault and denying her recovery of the damages she allegedly sustained in the accident. The Court of Appeal, for the Second Circuit of Louisiana, amended the trial court's decision to a fifty-fifty fault allocation. The Court applies the manifest error standard of review in their findings. Under this standard, the Court of Appeal must meet the following two-part test: (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous. After reviewing the record in its entirety, the Court of Appeal found that a reasonable factual basis does not exist for the trial court's findings and that the trial court's determination of negligence exclusively on the part of Ms. Duhon was manifest error. Not only did Ms. Foley’s testimony conflict with Ms. Duhon’s, it was also not corroborated by the physical evidence. Even the trial court intimated comparative fault of the drivers when it stated in its oral reasons for judgment that “neither party entered with enough caution to avoid the accident.” Thus, the trial court erred in assessing no fault to Ms. Foley for this accident.

In her appeal, Ms. Duhon also disputed the figure involving the diminished value of her 2009 Lincoln MKX. At trial, both Ms. Duhon and State Farm submitted estimates of the diminished value for the trial court's consideration. Ms. Duhon determined the diminished value at $6,730.76 by using an online website while State Farm offered a diminished value assessment prepared by Crawford & Associates at $2,179.54. The Court of Appeal accepted the valuation offered by State Farm.

According to the foregoing holdings, the Court of Appeal amended the trial court's judgment to reflect an award of fifty percent of $454.09 (the total amount paid by Ms. Duhon for her deductible and rental expenses) and fifty percent of $ 2,179.54 for the diminution in the value of Ms. Duhon's vehicle.

This complicated case showcases the ability for a loss at the trial level to be overturned on appeal and is a great indicator of why proper representation is key. Had Ms. Duhon not received quality representation on the second level, she may have been completely out of luck in her appeal and not received any of the compensation she deserved.

Louisiana Supreme Court Finds Binding Arbitration Clause Fair and Reasonable to the Client

Fri, 10 May 2013 08:00:21 -0600

The Louisiana Supreme Court has recently undertaken a case deciding whether arbitration clauses in attorney-client retainer agreements are appropriate. In the past, Louisiana has favored the enforcement of arbitration clauses in written contracts. Arbitration avoids taking a case to trial and is a thrifty and efficient way to conduct the resolution of disputes outside of the courts. During arbitration, each party refers its dispute to an arbitrator, who then imposes a decision that is legally binding for both sides. However, Louisiana law also imposes a fiduciary duty requiring attorneys to act with the utmost fidelity and forthrightness in their dealings with clients and any contractual clause, which may limit the client’s rights against the attorney is subject to the upmost scrutiny.

According to the Louisiana Supreme Court in Hodges v. Reasonover, there is no per se rule against such binding arbitration clauses, provided that they are fair and reasonable to the client. In Hodges v. Reasonover, Jacqueline Hodges, the founder, sole shareholder, and CEO of Med-Data Management, Inc., hired Kirk Reasonover of the law firm of Reasonover & Olinde to sue a company known as MedAssets, Inc. in federal court in Atlanta, Georgia. In the retainer agreement between Hodges and Reasonover there was an arbitration clause, which essentially provided that any dispute shall be submitted to arbitration in New Orleans, Louisiana and that such arbitration shall be submitted to the American Arbitration Association (AAA).

Hodges was ultimately unsuccessful on her suit against MedAssets, Inc., which led her to file suit for legal malpractice against Reasonover. According to the Louisiana Supreme Court, Courts must closely scrutinize attorney-client agreements for signs of unfairness or overreaching by the attorney. Further, Louisiana Rule of Professional Conduct 1.8(h)(1) prohibits a lawyer from “prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement.”

According to the state of Louisiana as well as the American Bar Association (ABA), an arbitration clause does not violate Rule 1.8(h)(1) unless some aspect of the arbitration clause limits the lawyer’s substantive liability. According to ABA Formal Ethics Opinion 02-425:

[M]andatory arbitration provisions are proper unless the retainer agreement insulates the lawyer from liability or limits the liability to which she otherwise would be exposed under common or statutory law. For example, if the law of the jurisdiction precludes an award of punitive damages in arbitration but permits punitive damages in malpractice lawsuits, the provision would violate Rule 1.8(h) unless that client is independently representing in making the agreement.

The Louisiana Supreme Court agrees with the aforementioned opinion by the ABA and states that an arbitration clause which does not inherently limit or alter either party’s substantive rights, but rather it simply provides for an alternative venue for the resolution of disputes is enforceable. In the case of Jacqueline Hodges, the Court found that there is no evidence that arbitration conducted in accordance with AAA rules and before AAA-approved arbitrators would in any way be presumptively unfair or biased. Thus, the Court said that arbitration provides a neutral decision maker and is otherwise fair and reasonable to the client.

For clients, the word “binding” can have an intimidating effect. At the Berniard Law Firm, our lawyers do not take arbitration matters lightly and understand the gravity of such situations, particularly in personal injury and insurance disputes. Our attorneys are here to provide experience and quality representation from the beginning of our time with clients until the very end. We will explain and discuss contracts, such as retainer agreements, in great detail so that you as the client can feel comfortable with your signature on the dotted line. The Berniard Law Firm always has your best interests in mind and we are happy to counsel you if you have legal questions regarding arbitration.

Louisiana Couple Injured in Car Accident Seeks Recovery from Insurance Companies

Mon, 06 May 2013 07:39:15 -0600

You have just been involved in a car accident. Someone else was driving, and you bring suit against them and several insurance companies that are involved. But who has the burden of proof to prove how much you should be able to recover from the insurance companies? In Louisiana, that burden is on the plaintiff. The plaintiff, when seeking a declaration of coverage under an insurance policy, has to prove that his or her claims are covered under the policy coverage and also has to establish all essential facts in order to recover.

How would this play out? Well, recently, this exact situation played out in Louisiana. A couple was riding in a car driven by another man. The man driving had rented the car from Houston, Texas, but the case was tried in Louisiana. At some point while driving the couple, the man lost control of the vehicle and ended up flipping the car twice. The couple suffered severe injuries from the accident and then filed suit.

Not only did the plaintiffs (the couple) file suit against the man driving, but they also filed suit against several insurance companies involved. Before actually bringing the case to trial, the couple tried to settle the case with a couple of the insurance companies, and the couple received checks in the full amount of the coverage under those insurance companies. However, it was not clear whether or not this was a full recovery. The plaintiffs also wanted to receive payment from the insurance company from the uninsured/underinsured motorist coverage (UM coverage). During the time the parties were trying to decide if this was a complete settlement or not, the plaintiffs' attorney went ahead and gave his clients the check. The defendants then filed a motion for summary judgment, stating that UM insurance coverage was not available. After several motions and cross motions, the trial court decided that UM coverage was not available to the plaintiffs and granted the motion of summary judgment in favor of the defendants.

When this case was brought to the appellate court, the court analyzed the case de novo (or as if the trial court had not already tried the case) and decided to affirm the trial court's ruling. Why did they affirm the trial court's ruling? This is primarily because the plaintiff has the burden of proving what he or she is owed under the insurance policy, and the plaintiffs in this case could not prove that they should be able to recover under UM coverage.

The reason that the plaintiffs could not prove that they should be able to recover under UM coverage is because of the plain language of the insurance coverage policy. Normally, summary judgment should only be granted if there is no reasonable interpretation of the policy, supported by evidence and the facts of the case, that would support granting coverage. This seems like a pretty lenient standard for the plaintiffs, but it still requires that the plaintiffs prove that there is a reasonable interpretation of the policy that does allow them to recover in the manner that they are seeking. And in this case there was not.

In the language of the policy, several clear definitions were given, and as long as the policy wording is clear, then the agreement has to be enforced as it is written. In this case, the policy language stated that in order to recover under UM coverage, the vehicle cannot be available for regular use. However, in this case, the rented vehicle was clearly available for regular use during the rental period, and the vehicle, therefore, could not be classified as underinsured. So the plaintiffs were not entitled to recover any more than they already had.

If you have been involved in a car accident, you want to make sure that you claim and recover the proper amount that is available to you under the various insurance policies involved in the case.

The Carefully Worded Insurance Policy: Making Sure Your Coverage Matches Your Expectations

Thu, 02 May 2013 07:24:35 -0600

Do you drive an automobile insured through an employer? How well do you know the policy? It's possible that you aren't covered as well as you think.

The petitioners of Broussard v. Progressive Sec. Ins. Co. were merely seeking coverage compensation after a seemingly simple traffic accident in Maurice, Louisiana. They ended up in court and dealt with costly appeals over whether or not the driver of the other automobile, a dump truck, was insured by the business who hired him for this particular haul. The driver, who owned the dump truck, was a contractor, and thus not an employee. As a result, he was screened out of much of the hiring company's insurance policies, thus potentially inhibiting the petitioners' attempt to recover.

The major questions regarding the insurance coverage were over the definition of a “hired” auto and the definition of a “nonowned auto,” in light of the specific policy at hand. While it may seem at first glance that the dump truck had to qualify under one of these categories, the court found there was a genuine issue of material fact as to whether the company had “hired” the truck or “hired” the services of the driver. This distinction is important because specifically hiring the truck would result in coverage under this insurance policy, whereas hiring the full services of a driver would not result in coverage for the truck. The court considered invoice tickets engaging the driver's company generally, and not a specific vehicle, to be a relevant factor in deciding this issue.

This distinguishing issue regarding what exactly the company had "hired" was also relevant to the consideration of whether the truck was covered as a “nonowned auto” when it was being driven by someone who was not an employee. Although the insurance policy in question offered several examples and designations of a "nonowned auto," the petitioners were still able to proffer several cases where a "nonowned auto" had been defined by the court. The court ultimately found this case as factually distinguishable from all of the proposed case law comparisons. Although this truck was not owned by the hiring company, it still might not qualify as a "nonowned auto" for insurance purposes. The insurance policy potentially covered the operation of a "nonowned auto" with the following language: "anyone else while using with your permission a covered 'auto' you own, hire or borrow [is covered under this section]." As discussed above, the court found a genuine issue of material fact regarding whether or not the vehicle had actually been "hired."

If you have a similar insurance policy, or are potentially covered through your employer, there are a few other important issues to note regarding "nonowned auto[s]." If a "nonowned auto" is covered, it is likely that the coverage is contingent upon the vehicle being used specifically for the business or personal purposes of the insured.

Insurance agreements are like all other contracts—they're complicated! You may need a lawyer to help you determine what rights you have regarding a policy. Whether you've been in an auto accident in a company vehicle or suffered a collision in your personal automobile, call the Berniard Law Firm today to speak with an attorney.

The When and How of Waiving Uninsured Motorist Coverage

Tue, 30 Apr 2013 07:54:48 -0600

Uninsured motorist (UM) coverage protects drivers from individuals not carrying sufficient insurance. The importance of such coverage makes waiving it a somewhat complicated procedure, designed to make sure the driver truly does not want it. A case in Abbeville, Louisiana, illustrates the complexities of when corporations waive UM coverage on company automobiles.

Plaintiff James Bergeron sued to recover damages after being rearended in the vehicle provided by his employer, Murphy Oil. All defendants were dismissed from the suit except Liberty Mutual, which contended it didn't include uninsured motorist coverage in the policy it issued to Murphy Oil.

In Louisiana, uninsured motorist coverage is provided by a specific statute, La.R.S. 22:1295. Court decisions have recognized the importance of UM insurance as a matter of public policy, to the extent that the coverage is implied as an amendment to any automobile liability policy (even policies not expressly providing for it).

An insurer is required to prove that the insured either explicitly rejected UM coverage or opted for a lower policy limit. Further, a specific commissioner of insurance form, with several requirements for proper execution, must be used to waive UM coverage.

In this case, the issue was whether the employee who signed this UM rejection form on behalf of Murphy Oil had the authority to do so. Specifically, plaintiff contends there was no evidence that the employee had express written authority to sign the form.

The trial court granted Liberty Mutual's summary judgment motion dismissing the plaintiff's claims. In support of its motion, Liberty Mutual offered two affidavits attesting to the employee's authority to accept or reject UM coverage.

Plaintiff brought up a court decision in which an insured's mother was found not to be acting as a "legal representative" of the insured, because there was nothing in writing evidencing such authority. But the appellate court distinguished the decision from the facts of this case by pointing out that the insured is a corporation. Officers, employees, and agents act on behalf of corporations, and the employee who signed the UM rejection form acted on behalf of Murphy Oil.

The key issue, then, is "whether the person who signed the form was authorized by the corporation to reject UM coverage." The individual who signed the waiver in this case was found to be acting in his capacity as a Murphy Oil employee.

Uninsured motorist insurance provides critical protection to injured drivers when the party at fault is not sufficiently covered. If your insurance company is refusing to cover your automobile accident, speak with an attorney at Berniard Law Firm today.

High/Low Agreement Proves Fatal to Plaintiff's Cause of Action

Sun, 28 Apr 2013 07:39:02 -0600

Settling with an insurance company out of court is commonplace in the legal world. However, entering into a "High/Low" agreement prior to trial can come back to hurt a plaintiff and should be carefully worded and considered before executed. The cost of this kind of failure is exemplified in Soileau v. Smith True Value and Rental.

In November 2007, plaintiff Mary Solieau sustained serious injuries when a John Deere front-end loader detached from a John Deere tractor and shattered her leg while she was supervising the cleaning out of canals for the Town of Mamou. The tractor was rented from Smith's Hardward, insured by Defendant Hartford Insurance Company.

Before proceeding to trial, Solieau entered into a "high/low" agreement with Hartford, capping Hartford's liability at its policy limit of $2,500,000 and further releasing the Smiths of any personal obligation. At trial, Solieau moved to dismiss the Smiths, which led to Hartford filing for a directed verdict based on the language of its policy, which obligated Hartford to pay only those sums that its insured becomes legally obligated to pay. The trial court denied the motion.

After trial, the jury found in favor of the plaintiff, placing 15% of fault upon the Smiths. The trial court entered judgment against Hartford for $1,074,462.82. Hartford and Soileau then appealed the decision, addressing the issue of whether Louisiana Revised Statute 22: 1269 (La.R.S. 22:1269) barred Soileau from pursuing Hartford alone once its insured parties were dismissed from litigation.

In overturning the decision of the trial court, the appellate court determined that the direct action statute, La.R.S. 22:1269, did in fact bar Ms. Soileau from recovery from Hartford. The relevant statutory language ensures an injured person a “right of direct against the insurer within the terms and limits of the policy.” The court relies on the language of the “high/low” agreement, which released the Smiths of personal liability, but nowhere mentioned Hartford agreeing to waive its rights under the direct action statute.

The court went on to shoot down the plaintiff’s contention that the direct action statute only governed the initial filling of an action, not the maintenance of an action against an insurer once the insured is dismissed. The court sided with Hartford, positing that "the legislative intent behind the direct action statute would be defeated if a plaintiff could circumvent the statute’s requirements simply by filing the action against the insured and the insurer then dismissing the insured."

In the end, the “high/low” agreement entered into by the plaintiff turned out to be fatal to the cause of action since the dismissal of the insured barred the defendant insurance company from liability towards the injured party. Knowing how to navigate a settlement opportunity is incredibly difficult and comes from years of experience. The Berniard Law Firm has significant experience in settlements, especially with insurance companies, which provides a wealth of information and quality advice from our attorneys. Contact us today for more information on your rights before you make a settlement that could hurt your ability to be compensated for your injury.

Lafayette Summary Judgment Case Highlights Insurance Company Practices

Sun, 21 Apr 2013 07:55:55 -0600

Summary judgment is a mechanism used when one party clearly deserves to win the case based on either issues of fact or law. That is, the parties agree to facts and those facts point to a clear winner of the case when the correct laws are applied. Summary judgment helps cases move quickly through the judicial process because an actual trial is not necessary. However, where there are issues of factual disputes or the evidence is unclear, summary judgment cannot be used to conclude the case.

Often, both sides will move for summary judgment because any grant of summary judgment will conclude the case and avoid a full trial. A case appealed from Lafayette, Louisiana, explains when summary judgment is appropriate. The court explains that the burden of proof is on the party moving for summary judgment. However, that burden adjusts depending on who would be the party needing to prove the burden at actual trial. As a general notion, the burden is usually on the party who is claiming the error. For example, if you are injured in a car accident, then you must prove that the other party was at fault in order to recover. If the mover would not have had the burden at trial, then the threshold to grant summary judgment is much lower. Instead of proving that there is no way the other side could win, the party without the burden could prove that the other party does not have enough facts, evidence, or there is some other fatal flaw with their argument.

In that case, the plaintiff was in a car accident that caused him serious back injuries. His back injuries resulted in surgery and completely inhibited his ability to work. In fact, the plaintiff was a lawyer who previously had his own law practice, but the law practice closed after his accident because he could not continue due to his injuries. The lawyer had two disability policies that covered him should he become disabled and unable to continue working. These polices both had partial options that would award partial benefits if the individual could continue working, but not at full capacity. Since the lawyer had to quit his law practice, he argued that he should be awarded full disability payments.

Both sides argued for summary judgment. The lawyer argued for summary judgment based on the notion that he should be paid the full amount of disability and his payments should have occurred much sooner than they did. The insurance company, on the other hand, argued that summary judgment for their side was appropriate because the lawyer did not deserve full disability and they could not have given payments any sooner because the lawyer did not furnish them with all of the information they needed to begin making payments.

The disability payments depended a great deal on past income. The payments were adjusted to portions of income depending on whether the individual was awarded full or partial disability. As such, the insurance carriers required the lawyer to submit previous tax returns as proof of income. The insurance company requested the plaintiff's 1999 tax return, but did not receive it until 2005. Instead, the plaintiff furnished the insurance company with his tax returns from 1997 and 1998. Since the accident occurred in 1998 and the payments were to be based on the previous year's earnings, the plaintiff assumed that the insurance company would want previous year's tax returns.

While the insurance company was waiting on the 1999 tax return, the insurance company made two payments to the plaintiff. However, the insurance company alleges that they did not pay in full because they did not have the 1999 tax return. The court noticed this inconsistency. The court explained that the plaintiff was obviously entitled to some benefit since the insurance company paid him, but the question was whether the payments were correct and timely. Since the facts did not line up with the testimony, the court determined that neither side should be awarded summary judgment. Accordingly, the case will go to trial and the court will determine the case on the merits, instead of just as a matter of law.

Summary judgment is a valuable tool when used properly. It avoids the time and money involved in a complete trial and allows the winning party to obtain the same result that they likely would have at trial. It functions as a legal short cut. The Berniard Law firm can help determine if your case is appropriate for summary judgment. In addition, we can also take your case to trial if needed.

Understanding the Federal National Flood Insurance Program as Hurricane Season Approaches

Wed, 17 Apr 2013 07:21:03 -0600

The Federal National Flood Insurance Program (“NFIP”) is a federal program that allows homeowners to protect against flooding because most homeowners insurance does not cover flooding (You can check out their website here). It is offered to homeowners, renters and some business owners. The federal government works with private insurance companies to encourage them to offer insurance. The government sets a standard rate and then the insurance is actually through the private insurance company, but involves the federal government to a great degree. The federal government underwrites, or supports the insurance company, but the private insurance company does all of the related administrative tasks.

Because of the federal government's involvement, when there are issues with the insurance company, you must follow unique litigation paths in order to recover for any damages in many occasions. For example, the federal government will normally cover any litigation costs for the private insurance company. As such, some procedures that would normally be acceptable at the state level may not be allowed in the federal court.

A case in Mississippi that was appealed to the Fifth Circuit Court of Appeals helps explain these differences. In that case, Grissom, the insured individual, had insurance under the NFIP through Liberty Mutual. He was eligible for a preferred risk insurance policy, but did not know he was eligible. After Hurricane Katrina, he argued that he would have purchased the preferred risk insurance policy if he had known about his eligibility.

When Hurricane Katrina completely destroyed Grissom's home, the insurance paid $121,000, which was the policy maximum. Grissom sued arguing that he should be awarded the difference between his current policy maximum and the amount he would have gotten if he were under the preferred risk insurance policy. Grissom won at a jury trial on the state level. Under normal circumstances, this case could be resolved easily under state law. However, because federal money may be involved, the court had different questions to consider.

First, the Court considered whether federal law preempted the case. If federal law preempted, then the state court should not have heard the case and Grissom should have brought the case directly to federal court. The court has ruled on this issue several times before and decided that federal law controls when there are “tort claims arising from claims handling” Wright v. Allstate Ins. Co., 415 F.3d 384, 390 (5th Cir. 2005). However, federal law does not control when the individual is getting insurance as a new customer. Campo v. Allstate Ins. Co., 562 F.3d 751 (5th Cir. 2009). That is, only if the individual is getting insurance as a first time customer does state law control. Therefore, the question in this case became whether Grissom was getting insurance for the first time. Grissom was renewing his policy when he became eligible for the preferred risk insurance policy. As such, the court concluded that he was renewing, and not a new customer, so federal law controlled. See Borden v. Allstate Ins. Co., 589 F.3d 168, 173 n.2 (5th Cir. 2009) (explaining that claim renewal is considered claims handling).

Next, since there was a jury in the lower court, the Court considered whether a jury would have been proper. Normally, if federal funds are involved, a jury trial is not appropriate. Under the NFIP, “[t]he federal government pays flood insurance claims and reimburses costs, including defense costs, for adjustment and payment of claims by private insurers.” Therefore, since the government pays for litigation directly, a jury trial is not appropriate.

Lastly, the Court considered whether Grissom's claim would have won even under state law. Grissom's argument was that the insurance providers had a duty to inform him of his preferred status when he renewed. He argued that failure to inform him amounted to a negligent misrepresentation. In Mississippi, there is a five-factor test for negligent misrepresentation. The Court concluded that it should not have won at the state level because it failed one of the tests for liability. In fact, Mississippi law explains that there is no affirmative duty to inform buyers of other insurance policies that may be more beneficial to them given their unique circumstances.

Programs such as NFIP create unique litigation situations that mesh federal and state law. Experienced attorneys should be employed to deal with these complicated issues. Call The Berniard Law Firm today and we would be happy to discuss your legal needs with you.

Hurricane Damage Appraisals at Core of Insurance Dispute

Sun, 14 Apr 2013 07:44:57 -0600

Even in 2012, issues regarding Hurricane Katrina, which occurred in 2005, are still prevalent. Insurance companies are particularly affected by Katrina, and they are still attempting to sort out many claims. Some of the contract claims that are still moving through the courts are somewhat unique. For example, contracts occasionally have provisions where both parties can appoint an appraiser if the two parties cannot decide how much damage actually occurred. The insurance policies will only insure up to a certain amount, of course, but determining the amount of damage is a vital part of reimbursement of the claim.

An apartment building in Metairie, Louisiana carried insurance that had such an appraisal policy. The contract explained that both parties were to appoint their own appraiser, who is supposed to be fair and impartial. Then, a third individual, the umpire, would be appointed. The umpire takes both of the appraisers' estimates, examines them, and then comes up with a third number that will be the final number for total damage. The two parties are supposed to appoint the umpire as well, but if the two parties cannot decide on an umpire, then the court can appoint one for them.

In this case, the court did appoint an umpire. However, the court not only appointed an umpire, but also imposed certain rules and restrictions to the appraisal process. In particular, the court restricted the documents that the umpire could receive and required that if the umpire needed to communicate with either party then the opposing party would also be included in the conversation. The communication issues required the umpire to copy both parties on e-mails, letters, and make conference calls. Communication with just one party was strictly not allowed. In addition, neither party was to give the umpire documentation of a legal nature that would attempt to convince the umpire that the award should be a certain amount. Instead, the documentation was limited to receipts, inspections, and other impartial information.

The apartment's appraiser valued the damage at approximately $200,000, but the insurance company's appraiser valued the damage at zero. The apartment owner argued that the insurance company's appraiser was not being impartial because they did not award any damages. However, the insurance company noticed that the apartment owners had already fixed most of the damage using funds from other insurance companies, so the insurance company's appraiser determined that the apartment owners were not entitled to any more damage payments.

The umpire agreed with the insurance company's appraiser and recommended that the damage award be zero. Naturally, the apartment owner was upset by this result, so he appealed the decision to the Fifth Circuit Court of Appeals for the State of Louisiana. The apartment owner argued that the court interfered too much with the process--the apartment owner should have been able to give the umpire whatever documentation they wanted and communicated however they wanted.

The Court disagreed. It began its analysis by underscoring that although the two parties had an appraisal clause in their contract, the clause does not take away the court's right to hear a case. In addition, insurance policies are contracts, and should be interpreted under the regular principles of contracts. Therefore, the court will interpret the contract using its regular meaning unless some of the phrases have gained technical definitions in that particular line of business.

The Court explained that the two parties deliberately involved the court when they stated in the contract that the court was to assign an umpire if the two parties could not agree to one. The appraisal portion of the contract did not set specific guidelines in the process, so the court stepped in to create them. The lower court explained that they were afraid the umpire was getting far too much irrelevant information, so they intervened. The Court deemed this a completely acceptable practice under the circumstances. The Court also decided that the insurance company's appraiser was sufficiently impartial. Lastly, the Court concluded that since the lower court acted appropriately, the award of zero damages should still stand.

This case illustrates a unique clause that could potentially be helpful for the insured, but since the clause was not detailed enough to limit the court's actions, it turned out to be detrimental.

Gambler's Embezzlement Calls Casino's Role in Problem Behavior Into Question

Sun, 07 Apr 2013 08:26:44 -0600

NOLA 180 ("NOLA"), a non-profit corporation, was the manager of Langston Hughes Academy Charter School. Kelly Thompson, the Financial Officer of Langston Hughes, was found guilty in federal court of embezzling $667,000 from NOLA, in order to finance her gambling habit. Subsequently, NOLA filed suit against Jazz Casino, alleging that it "substantially participated in and facilitated the gambling obsession of Thompson, and at times materially assisted, encouraged, and otherwise aided and abetted Thompson in the gambling obsession that led to Thompson's theft." NOLA also alleged that Jazz Casino "encourag[ed] and/or contribut[ed] to the financial loss suffered by NOLA." The trial court, The Civil District Court from the Orleans Parish, heard the case. The trial court ruled that NOLA failed to state a right of action or cause of action and dismissed all of NOLA's claims.

NOLA appealed, and the appellate court, The Court of Appeal for the Fourth Circuit of Louisiana, heard the case. On appeal, the sole issue was whether NOLA's petition and amended petition stated a cause of action or a right of action against Jazz Casino. On appeal, NOLA asserted three theories for which it could be entitled to relief: it claimed relief under La. Civ. Code art. 2315 for general negligence; under the Louisiana Unfair Trade Practices Act ("LUTPA"); or under the "abuse of rights" doctrine, see Morse v. J. Ray McDermott & Co.,344 So.2d 1353 (La. 1976).

Unfortunately for NOLA, not all of those theories could be reviewed. First, NOLA never presented any claims pursuant to LUTPA before the trial court. Appellate courts are limited to reviewing only what is in the record; therefore, the LUTPA claim could not be reviewed. Second, NOLA's "abuse of rights" doctrine claim, also could not be reviewed. It was not mentioned in NOLA's petition or amended petition. "That argument is first made in NOLA 180's opposition memorandum filed in the trial court." The Court of Appeals noted that "This court is a court of record and can only review what is contained in the record on review." The Court stated,"We note also that large portions of plaintiff's brief alluding to research, psychiatric findings, and compulsive gambling, are not contained in the record."

In other words, on appeal, NOLA could not introduce new claims. The Court of Appeals was limited to reviewing whether Jazz Casino could be held responsible for the losses sustained by NOLA when its employee (Thompson) embezzled funds to finance her gambling habit. And the legal issue was whether NOLA stated a valid cause of action for relief. The Court of Appeals affirmed the trial court's findings and determined that NOLA did not state a valid cause of action for relief, and due to the reasons that follow in the subsequent paragraphs.

Louisiana's relevant gambling statutes are found in Title 27 of the Louisiana Revised Statutes, which contains the policies for development and regulation of authorized gambling in Louisiana. The state legislature debated gambling activity and recognized that gambling "is a serious and widely-recognized problem." However, the legislature did not impose an affirmative duty on casino operators to identify problem gamblers. La. R.S. 27:27.1H. The Legislature does require gambling facilities to post signs that provide toll-free numbers for information and referral services regarding compulsive or problem gambling. In certain limited instances, sanctions can be imposed "if a licensee, permittee, or casino gaming operator willfully fails to exclude from its establishment a person placed on a self-exclusion list.”

When a problem gambler self-reports, he or she is placed on a list that is maintained by the casino, and only then could a casino be held liable for the compulsive gambler being allowed to patronize the gambling facility. The record does not indicate that Thompson self-reported and was placed on a list. Based on Louisiana's gambling statutes, the Court of Appeals came to the conclusion that Jazz Casino did not have a duty to identify and recognize compulsive gamblers. Therefore, NOLA's petition failed to state a cause of action against Jazz Casino.

NOLA also claimed that it should be allowed to conduct discovery and then amend its petition in order to state a valid cause of action, "to cure the defects". The Court of Appeals disagreed. The Court found that there was "no provision that a plaintiff be allowed to conduct discovery prior to curing the defects." The Court also noted that NOLA did not indicate to the trial court that it desired to amend its petition. The Court of Appeals found that NOLA could not cure the defects in its petitions.

The Court of Appeals affirmed the Trial Court and assessed all costs of the appeal to NOLA 180.

This case showed the importance of clearly stating a valid legal cause of action. In the instant case, when the Court of Appeals reviewed the record, it was clear that NOLA had not stated a valid legal cause of action because there was no affirmative duty for Jazz Casino to identify and recognize compulsive gamblers.

It is very important when filing suit that a party carefully plead a cause of action
for which relief can be granted. Call the Berniard Law Firm today to speak with an attorney immediately if you are facing a pressing legal matter and require assistance.

Attorney Jeffrey Berniard makes New Orleans Magazine top lawyers list

Thu, 04 Apr 2013 08:54:26 -0600

Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

- What is Mass Tort Litigation? -

Mass tort litigation involves a class of civil actions involving multiple plaintiffs who are injured by a defective product, a hazardous substance or some type of disaster. Mass tort actions can be against one or many defendants in either state or federal court. This type of litigation allows several attorneys or even a group of attorneys to represent several injured parties within an individual case. This becomes a much more effective form of litigation that allows for the pooling of resources and ideas.

Mass tort typically involves a smaller group of individuals typically limited to a certain geographic area. This differs from the class action, which is one lawsuit that is filed by an individual or a small group acting on the behalf of a large group. Class actions tend to be much larger suits and are represented by one class representative who represents the entire class. In mass tort, each individual is treated as such--as individuals. In a class actions, the entire class is treated as one individual. Attorney Jeffrey Berniard and the Berniard Law Firm have extensive experience with both class action and mass tort litigation.

Contact the Berniard Law Firm today at (888) 550 5000 if you feel that your rights have been violated.

Hurricane Katrina Case Faces Ambiguous Contract Language Hurdle

Tue, 02 Apr 2013 09:21:06 -0600

In the first year of law school, nearly every student takes a course in Contracts. Contract law is one of the bases of our legal system and is at the core of almost all legal agreements. Everytime you get car insurance, sign a lease, agree to pay your plumber or electrician for work, or sign up for new cellphone service, you are dealing with a contract.

In contracts, every single word and punctuation mark is important. Clear, concise and unambiguous language is vital to writing a good contract. Sometimes even big companies enter into contracts that contain ambiguous language. These ambiguities can cause legal problems down the road. The case of WH Holdings, L.L.C. et al. v. ACE American Insurance Company illustrates how ambiguous contract language can lead to legal problems for the parties involved.

Prior to Hurricane Katrina, WH Holdings, the owner of the Ritz Carlton Hotel Complex in New Orleans, hired Gootee Construction Company to renovate the existing structure of the complex. Gootee was in the process of performing the renovations when Hurricane Katrina made landfall and caused damage to the exterior of the building. WH Holdings filed suit against Gootee's insurer, ACE American Insurance Company, for almost $3.3 million for damage to the exterior of the hotel.

The parties agreed that the contract was governed by a form document known as the General Conditions of the Contract for Construction (General Conditions). The General Conditions is a document that contains amendments that the parties negotiated themselves - the Court acknowledges that these amendments are clearly marked in the document.

Both parties also agreed that WH Holdings was only covered under the policy which ACE issued to Gootee if, and only if, WH Holdings qualified as an insured party under the policy. Thus the entire case rested on whether or not Gootee was "contractually obligated... to insure WH Holdings such that it became an insured on the ACE policy."

To reach its decision, the District Court looked at two clauses of the contract, Subsections 11.4.1 and 11.1.5(g). The parties distinctly amended a portion of Subsection 11.4.1. to seemingly place the responsibility of purchasing property insurance on Gootee. The District Court even acknowledged that if 11.4.1 stood alone, ACE would have no basis to contest WH Holdings claim. However, the District Court held that a separate subsection, 11.1.5(g), located in a different portion of the contract, changed the meaning of 11.4.1 by "unambiguously... obligating WH Holdings to carry the insurance 'when the construction is an addition or a renovation.'"

The district court granted ACE's motion for summary judgment and concluded that WH Holdings was not an insured party under the contract and Gootee had no responsibility to insure WH Holdings.

The 5th Circuit disagreed with the District Court's analysis stating that while the district court "relied entirely on subsection 11.1.5(g) in finding the contract unambiguous... subsection 11.1.5(g) is not as 'crystal clear' as the district court thought it to be." The Court goes on to point out that 11.1.5(g) appeared in an entirely different portion of the contract than 11.4.1. Subsection 11.1.5(g) appeared in a section of the contract covering "Contractor's Liability Insurance" while 11.4.1 appeared in a section entitled "Property Insurance." The Court found that 11.1.5(g) is limited in scope by a preceding clause and therefore does not modify 11.4.1, and to read it any other way would be ignoring this express limit. The 5th Circuit finally stated that it simply cannot agree with Gootee's assertion and the District Court’s conclusion that the contract language unambiguously obligated WH Holdings to purchase property insurance.

The 5th Circuit also disagreed with WH Holdings argument that it was in fact Gootee who was "unambiguously required... to purchase the property insurance" since WH Holdings was unable to persuasively argue their interpretation. Stating that there were "difficulties with each party's contention that the contract unambiguously supports its position," the 5th Circuit vacated the District Court's judgment and remanded the case back to the District Court. Finally, due to the ambiguous nature of the contract, the 5th Circuit also ordered the District Court to examine outside evidence brought by both parties regarding the meaning of the contract and to examine how both parties had performed the contract prior to the lawsuit being brought.

Contracts can be extremely important and very complicated particularly when dealing with insurance issues. Hiring the proper attorney is very important to ensure that all documents relevant are maintained, and provided, from start to finish, as well as to navigate any complicated appeals that may arise.

What is a Class Action? Who is the "Class?"

Thu, 28 Mar 2013 07:09:21 -0600

In Jane Doe v. Southern Gyms, LLC arising out of Baton Rouge, Louisiana, a class action suit was filed involving a local branch of the national gym, Anytime Fitness, was accused of taking pictures of 250-300 women changing in a locker room. The plaintiffs filed on behalf of all women who'd used the gym during the time period and the class was certified to proceed to trial.

To understand what "the class was certified" means, it is important to understand what a class action suit is the reasons why we allow class actions in the first place. Class action suits are a useful tool in litigation in that it can bring together large numbers of substantially similar or identical claims into a single proceeding. This contributes to judicial efficiency as often times the type of cases litigated as class actions can have as many as thousands of plaintiffs. Assuming each of these cases was large enough to be worth bringing to court individually, there would be substantial amounts of duplicated effort by each party. However, the real value of class actions is in allowing cases that normally would be too small to litigate individually to have their day in court. If a case involves a real injustice to thousands of people, but the actual per person damages is relatively small it would be too costly to vindicate their claims.

In this case, the class proposed was:

all females who physically entered the women's restroom/locker room/ changing room at Anytime Fitness, 200 Government Street, Baton Rouge, LA 70802 from November 1, 2009, through and including April 5 2010.

The rules that govern class actions require that several hurdles be met before a class can be certified (allowed) to proceed: there must be enough members that litigating separately is impractical; the questions of law and facts in the case common to the parties; the class representative's claims must be typical of the claims of the class; they are able to protect the interests of the entire class, and finally the class must be able to be adequately defined so the court can be satisfied that the suit will end the dispute.

This case is noteworthy because the actual size of the class is fairly small. The gym operator admitted to videotaping on only 10-15 occasions. While any number of women may have been victims during these periods, the class itself was certified for any woman using the gym during a nearly 6 month period. There is no rule that states the minimum number of plaintiffs required for a class action, but the appeals court did not give a rousing endorsement for the "numerosity" (size) of the class in this case, they merely deferred to the trial court judgment on the matter. What was particularly noteworthy was the court weighed concerns beyond just the actual numbers of women involved. An additional factor was evidence that the gym allowed members from around the country to use it and thus the plaintiffs might not all have been locals which would have substantially increased the burden to litigate separately. Had all the women been locals, it is possible the court would have required "joinder" or just combining separate cases rather than allowing a representative in a class action suit.

Most people have been involved in a class action suit and may not have even been aware of it. Generally, each member of the class is required to be notified to give them the opportunity to opt-out of (or into) the class. This will typically be done via a postcard by mail. Thousands of these cards are thrown away without being read yearly but they can entitle plaintiffs to small to moderate cash settlements without ever setting foot in a courtroom, as you are being represented by the person bringing the suit!

Maurice Work-Related Accident Requires Complex Insurance Interpretation

Fri, 22 Mar 2013 08:07:27 -0600

When an accident occurs, there is usually a fight over whose insurance company will pay for the damages. The issue becomes even messier when the driver responsible for the wreck appears to be working under different employers. This was the issue in a recently decided case by the Louisiana Court of Appeal for the Third Circuit, which involved a wreck in Maurice.

In that case, Broussard v. Progressive Security Ins. Co., et. al., a dump truck hauling material to a construction site struck another vehicle in an intersection. The passengers of that vehicle filed a lawsuit against the driver, the subcontractor for which the driver worked, the general contractor who had hired the subcontractor and the insurance companies for both the subcontractor and the general contractor. The issue before the court was which insurance company would be held liable for damages: the subcontractor's or the general contractor's.

The court focused primarily on the language of the policy held by the general contractor. Under that policy, a "non-owned auto" could be covered under certain conditions. A "non-owned auto" was described as a vehicle not actually owned by the company, but were vehicles leased, hired or rented to be used in connection with the business. Thus, the question became whether the dump truck driver had been hired by the general contractor and whether or not the truck he was driving was hired or rented by the general contractor.

After analyzing the facts, the court found that, although the employee was hired by the general contractor, there was no evidence that the truck itself was hired or rented. Therefore, the subcontractor's insurance still covered the truck and would be liable for the plaintiff's damages.

Insurance issues like this are complex, especially in the business context. Depending on the policy, certain vehicles may be covered and others may not depending on certain circumstances. The determination of which insurance applies could mean hundreds of thousands of dollars for that insurance company, and hundreds or thousands of dollars in increased premiums for the policy holder. For this reason, it is important that companies and individuals know and understand their insurance policies.

Additionally, companies must be aware of who they hire. As was touched on in the above case, employees who cause an accident while operating within the scope of their employment can place their employer in the liability hot seat. Insurance in this context will play a critical role. For example, if an employee is drunk while driving his delivery route and causes an accident, the employer and the employer's insurance will likely be responsible for damages.

For businesses, this means hiring a questionable driver can put the company at risk of increased expenses from lawsuits and the danger of being dropped from its insurance. For individuals injured by these negligent drivers, this structure allows them to obtain the compensation they need to cover medical expenses, pain and suffering, and lost wages. Then, hopefully, the individual can achieve a full recovery.

When an accident occurs, the last thing people want to deal with is interpreting convoluted insurance policies. Yet, these documents are of vital importance when determining who will pay for accident damages. A competent attorney can walk you through the documents and help create a legal strategy that protects your best interests.