Preview stories don’t really tell you much, they’re kind of like rowing just enough to stay in place against the current. Here’s a preview story that’s better than most from Anita Lee of the Biloxi SunHerald about the hearings today in Mississippi. In one hearing, Judge Senter will hear arguments for class certification of the Guice case — the proposed class is Mississippi policyholders whose homes, like that of Judy Guice, were completely wiped out by Hurricane Katrina. In the second hearing, State Farm and policyholders will try to convince Judge Senter they have responded to his concerns about adequate compensation and procedural fairness that led him to shoot down the first settlement involving some 35,000 policyholders who have not sued. Yes, you read that right, who have not sued. If this story is new to you, the second matter is Woullard v. State Farm and I’ve written a ton about it, just use my blog’s search feature.
One thing, however, that stood out in this story like a paper Burger King cup floating in the fountain at the park was this paragraph:
State Farm maintains, because of the way its policies are worded, that the company owes no money to policyholders whose property might have been damaged by wind if Katrina’s storm surge was the predominant cause of the losses. For the first time after a catastrophe, State Farm relied on a "wind-water protocol," to deny slab claims when there was no discernible wind damage to separate portions of the property.
I admit that, back in the day, back in the old days of these Katrina cases, back in 2006, it briefly appeared to me that was State Farm’s position also. However, State Farm has since made it clear that it is not their position that when wind damage is followed by destruction by flood that State Farm owes nothing. State Farm admits its reading of the anti-concurrent cause language requires payment for wind damage that can be proven by the policyholder. If you don’t believe me, read this order from Judge Senter in the Tuepker case. Look at page two, the second full paragraph, which begins "State Farm stresses that it has not taken the position that . . . ."
I know this is complicated stuff, and some very smart people have commented to me how confusing this all this. But there has to be some modicum of fairness and long-range perspective that appears to me lacking in this front-page editorial from the SunHerald. A front-page editorial? Smacks of Charles Foster Kane doesn’t it? Plus the editorial says this about State Farm’s position on the anti-concurrent language:
But it is also wrong – tragically wrong – that State Farm used outcome-oriented engineering reports to invoke a clause in its policies that purports to say no wind coverage exists if storm surge ultimately caused the loss.
In light of what we just read from Judge Senter’s opinion, what is wrong, perhaps tragically wrong, is that statement in the editorial. Now, here would be a good place for me to point out that I have no dog in this fight. I don’t work for State Farm, and I represent policyholders as frequently as or more frequently than I do insurance companies. So, as far as I can be, I am free from ideology in this scrap, and I’m not rooting for any particular side or outcome in the cases.
I’ll close by asking the question I asked yesterday, and passing on a reader’s comment. I asked why, if State Farm’s claims adjusting protocols were so corrupt, are we not hearing the outcry over them from Alabama and Louisiana? Did State Farm, for some strange reason, radically alter its claims adjustment practices when it came to the Mississippi state line as part of a decadent plot to do in the Magnolia state? No. So what is it? A reader suggested it is because Mississippi has consumer advocates and Louisiana does not. Well, I suppose that’s getting closer to the answer, but there’s a long way still to trek. I ask again: were State Farm’s protocols different from state to state, or was it something different about the conduct of the litigation by policyholders and politicians in Mississippi?