Jury finds all home damage was caused by Katrina winds, case settles

A federal jury in Mississippi found on Friday that Katrina damage to the home of a Bay St. Louis couple was entirely caused by wind that destroyed the home before hurricane storm surge arrived.  The insurer in this case was USAA, which said the damage was caused primarily by storm flooding and which had paid the couple, Kevin and Sherrye Webster, about $11,000 for wind damage plus about $42,000 for their barn. The jury’s decision apparently was only on what caused the damage to the house, and the case settled after the jury went home for the weekend.  According to one of the lawyers for the Websters, they will collect at least $800,000 from USAA.  Here’s a story on the case by Mike Kunzelman of the Association Press. 


Filed under First Party Insurance

13 Responses to Jury finds all home damage was caused by Katrina winds, case settles

  1. James P. Reilly

    I recognize that there are differences of opinion regarding both the cause and extent of damage. In this case I am DISGUSTED. The company offered $11,000 and now SETTLES (not some runaway jury, but SETTLES) for $811,000. Somebody should be tied to a pole and have their flesh flayed with a cat o’ nine tails. Some sort of biblical punishment or pestilence should be visited on them. Oh well, since it SETTLED I guess there won’t even be a wrist slapping! What has gone wrong with this industry when this can happen?

  2. Nardi

    James, that is one reaction. How about the reaction that there is no way an insurance company can get justice with a jury? Did you look at the photos of the house? How a jury can say that wind was 100% at fault for “blowing” the soil out from the pilings under a house without even blowing all the shingles off or breaking the upstairs windows is what is amazing. Even Judge Senter, which has not been what one would call “even handed” with the insurers, instructed the jury to give him the percentage of wind and the percentage of water. The judge was EXPECTING there to be a split between the two because the damage was so OBVIOUSLY not all wind related. The insurer settled quickly after the first verdict based on how skewed the jury was to the insureds. There would probably have been another multi million dollar punitive award. It was a pretty smart decision based on what I have seen. Of course it is another reason USAA no longer writes homeowners in the bottom 6 counties as well.

  3. I feel for the home owners on every single case. Yes, the homes were probably destroyed by water and flooding but Katrina was packing a wallop of wind and rain too.

  4. jimmy smith

    Couple of comments on this.
    1. In regards to your response to the first comment on this I really think you are showing bias with your statement towards Judge Senter. I have followed all the cases, read the legal filings and his rulings and I dont see where you can come off saying that he has not been even handed. Some rulings favor the homeowners, some favor the insurance companies but because through his rulings he has put the responsibility of determining the damage caused by wind vs water on the insurance industry does not make him bias. Do you think a ruling the other way makes him even-handed? If so why? I noticed throughout your posts that you take consistent jabs at anything that tends to find the insurance companies may have ANY fault in these cases except for “poor PR actions”. A good example is that you noted that it was your belief that Judge Senter briefed the jury in a way to suggest he was expecting to receive a % for water and a % for wind, where does the non even-handiness exist at in that briefing if he was leading the jury to separate the wind vs water issue?
    2. The insurance companies as a whole, and I speak from personal experience and with written documentation on-hand, take the approach that because water reached the property that they are denying 100% coverage on this basis. The denial letter states that the property/home did suffer wind damage but since water reached the property then its a mute point. Seems to me the jury is pretty much using the same logic but simply reversing it by saying that since the wind damage occured first, well then let’s attribute all the damage to this fact. Which argument is correct? Which one is wrong? To me and I do have a dog in this fight I think the jury’s argument is more fair then the insurance argument. The insurance industry’s argument totally discounts any wind damage at all, something that in their denial letters they acknowledge. If the insurance companies had came out and made a “fair” determination of what was wind vs water instead of simply stating water reached the property so we are off the hook then I believe most of the cases would have been settled very quickly and without any legal action. By taking the road that water reached the property and therefore we can beat this in court approach they are having to lay down in the bed they made.

  5. Jimmy, I don’t believe I said anything about Judge Senter in this post. In other posts, sometimes I have praised his rulings and style of writing and making decisions, in some I have criticized certain legal rulings that are contrary to the way I see the law. I think he’s a great judge and have said so numerous times, however, he is not God and is subject to audit and review just like all the rest of us. Being criticized just comes with the territory when you are a lawyer, and that includes judges. I’m sure he’s a big enough person to understand when I criticize a legal ruling I am not criticizing him personally.
    I neither favor nor disfavor insurance companies. I am involved in several suits or pending suits against insurers right now, and I am involved with the defense or pending defense of several insurers right now. I am a coverage lawyer and as such I work for clients that hire me and my goal is to make good arguments and win cases and make a living to support my family while doing so. I do not have an ideology as far as thinking one side is good and the other bad. There are at least two sides to every issue. The other side is not necessarily evil.
    As far as the insurers supposedly denying all damage claims where the water reached a certain level, I know the facts to be otherwise. In almost every Katrina case I have talked about on this blog the insurer made a payment for wind damage. Perhaps it was not what the policyholder said it should be, but they did not fail to pay wind damage entirely.
    All this being said, I do make an effort to be fair to everyone, but one of the perogatives of having a blog is you get to call it as you see it, and that’s what I do. I welcome and publish contrary views such as yours. Thanks for taking the time to comment.

  6. jimmy smith

    In regards to the “wind damage” offers having been made in the cases you blog on, were these offers made, before or after a lawsuit was filed. How many pre lawsuit offers have you seen. I know first hand what State Farm’s response was, “your property suffered wind and water damage…we have determined that all the damage was caused by water.” Fair and balanced???
    In regards to being fair to both sides I hardly agree, you give occassional lip service to both sides so you can make this claim but repeatedly when you mention Scruggs, the sisters that turned over the State Farm “notes” and/or Jim Hood it’s always in a mocking manner. I’m no fan of Scruggs and in fact I would classify myself on the opposite end but I dont deny that he has done a lot to help out the home owners when the insurance companies said too bad. The “sisters” in my opinion did a honorable thing in doing what they did, they could easily have kept silent and kept on collecting State Farm paychecks but they risked a “good paying” job for that area of the country to show what they believed was a severe injustice (true American spirit in my eyes). As for Hood, his public bashing and lawsuit resulted in a lot of settlements and I believe this would not have happened if the threat of “under oath” statements had not been present from Hood’s lawsuit. Just my opinion but as a reasonable person I find it ironic how you repeatedly mock one side of this case while proclaiming your even handiness.
    As for the comment on Judge Senter, no it was not in the post but in response to a comment about the post. Here’s a refresher, “Even Judge Senter, which has not been what one would call “even handed” with the insurers, instructed the jury to give him the percentage of wind and the percentage of water.” Again I ask where has he been uneven?
    As someone who has worked their way into a position of influence on this issue through this blog I would think that you would truly be fair in comments of both sides, either positive or negative, instead of trying to belittle one side by mocking them in every post as this is a very serious issue for thousands of families.

  7. Nardi

    David and James:
    Mr. Rossmiller, I think the reply was directed at me (I made a reply to the first comment but then he went off and talked about other posts which I dont know that I made….) My comments in the reply he is speaking to do mention a certain bias exhibited by the judge. Directed bench verdicts as he did in one case have that effect on a person’s view. Whenever you take a decision out of the hands of the jury, be it good or bad, you are showing a bias, in my humble opinion. Now if you let a jury make a finding of fact and then change it later from the bench, that is another bias but at least you have not trumped a couple hundred years of jurisprudence in the meantime. I stand by my post. The judge has shown what any layperson would call a “bias” towards the insured. I did not say it was unfair, unethical, etc. The judge has merely “turned the tables” on many years of established claims law and put the burden of proof on the insurer, not the insured. I am not passing judgement because this may eventually be the way it all comes down at the appellate level. I believe the judge was earnest in his jury instruction asking for a percentage. The jury returned their opinion. I dont think the evidence supported that call but that is our system. If the judge felt there were other factors to consider he could make adjustments from the bench. He didnt. That’s the way the US system works.
    I dont understand your second comment because it doesnt apply as Mr. Rossmiller pointed out. This was another case where the insurer made an offer and paid for the wind damage portion of the claim. They did not totally deny coverage because of surge as you allege they did. They paid for what could fairly be called wind and did not pay for what was caused by what they determined was water. Arguments over which expert is right are for the courtroom. Your assertion of their denial is not factual however. As this blog has very candidly explained, time and again, the PRIMARY issue over MOST of these suits is over the CAUSATION of SPECIFIC loss and NOT timing. I do not know if you meant to say you did or didn’t have a dog in the fight, but as a citizen of the coast looking at the prospects of losing coverage or paying more for it, seeing jobs go elsewhere, seeing where I grew up whither away, I certainly DO have a dog in the fight and whatever the final outcome, it needs to be one that everybody can live with and move ahead with if we are ever to recover.

  8. Nardi, thanks for clearing that up. I misunderstood that Jimmy’s first comments were in response to you. When there are multiple commenters it can be hard to figure out what is being spoken to. Your points about causation of specific loss are correct. The case you are talking about is the Broussard case, and I’ve said this on the blog and in interviews with the media and I agree with you. I don’t see why the jury couldn’t be allowed to make the determination of damage. Very likely State Farm would have gone from the frying pan to the fire — the jury probably would have come back big against State Farm given the size of the punitive damage award in the case — but this cannot be known. I disagree with Judge Senter’s call. Doesn’t mean I don’t respect him, because I do. His performance under an incredible workload has been amazing. When I think he’s wrong, however, I will say so.
    Jimmy, I understand your points, but if I wanted to be unfair I could do so by failing to include materials and links that enable the reader to make up his or her own mind. Being fair does not necessarily mean I will find both points of view to be equally correct or incorrect. As far back as January I have praised Scruggs for a masterful job of representing his clients. Doesn’t mean I agree with or endorse everything he does — he has frequently gone overboard, as with the “lipstick on a pig” ad and the RICO lawsuit against State Farm.
    From the perspective of policyholders and folks along the Gulf Coast, Hood may in fact have scared some insurers and produced postivie results for Mississippi residents. It may also be that this has longer term effects that will be felt for a decade down the road. But Hood, like Charlie Crist, is someone who walks around with a bulls-eyes painted on. I find much if not most of what he says about coverage law to be totally wrong. He says other things I think are funny, like calling Dickie Scruggs a “confidential informant.” I’m not trying for the objective voice of an Associated Press story. If I did, this blog would be so dry no one would read it. Again, I do try to include source materials and enough material for others to make up their own minds. However, I think Hood says a lot of funny things.
    As for the Rigsby sisters, well, they may seem like Robin Hoods to some but another interpretation is they made a cynical ploy to violate a contract in return for monetary gain. I put quotes around “whistleblower” because they each got 150 large from Scruggs when they jumped ship and the documents they took from Renfroe have looked pretty dull so far. People have different opinions about this.
    These are my honest views. When I started writing about Katrina, I said I was going to ask questions and try to find answers. Well, I found some, but they won’t be in synch with everyone’s viewpoint. If I met any of these people I’ve mentioned in person I would offer to buy them a beer — I myself would have a ginger ale because I don’t drink. I have no personal animosity against them whatsoever. They probably are quite pleasant and interesting to be around.
    I’ll keep your point of view in mind as I’m writing. It’s good to hear dissenting voices. What a boring world this would be if we all thought alike.

  9. jimmy smith

    Nardi, David
    I must point out one thing in your comments regarding, “Your assertion of their denial is not factual however.” I was not referring to this case or any mentioned on this blog, I was referring to first-hand knowledge of MY case and the info is factual and I believe is very typical of State Farm’s response to ALL slab cases.
    I again stand by my point of how many “wind” vs water offers were made in slab cases by State Farm before a lawsuit was filed or before the Jim Hood “reevaluation” process was established. With the internet/email there was/is a lot of sharing of information between homeowners and I have heard from numerous ones the same story of no “wind” offers especially from State Farm.
    And yes I DO have a dog in the fight as I qualify as a “slab” case and I too believe there has to be a balance to all this but the balance is NOT failing to pay for wind damage because it will raise rates. Words and slogans and such can be twisted/spinned ever which way but if you look at the facts of cases you will find that State Farm repeatedly attempted to avoid paying wind damage by hiding behind 100% water damage claim. Like I said before I have documents where they state wind damage occured first but were not paying due to 100% destruction by “surge”. In my opinion insurance companies are seeing the result of their “bad faith” efforts in each of these jury decisions. We all tend to voice our opinion of a jury verdict based on media and/or even the legal filings but I believe a strong influence on these cases lie in the fact that the insurance companies own documents, even their denial letters, state wind damaged occured but 100% denial is determined due to “surge” damage. Put yourself in a juror’s position and lets say you saw this presented as evidence, would you believe that the insurance company acted in good faith. I state this one example as a way to try and explain some of these judgments we are seeing. It’s easy to say the jury or judge was baised but in forming that decision did we actually see everything the jury saw. I have sat on juries before and I will say I hate that responsibility because of the weight it carries and the impact it has on people’s lives. I just can not imagine a jury getting together to say hey forget the facts let’s stick it to the big insurance companies, this reminds me of the scenario where at 2 am the LA police got together and said hey lets frame OJ. I just dont think it happens, the jury must of had a solid reason to do what they did at least in their eyes.

  10. Jimmy, if you have these documents available and wouldn’t mind, please scan them in and send them to dpr@dunn-carney.com.

  11. jimmy smith

    I’ll have to contact my lawyer before doing this for his advice. Personally I dont see a problem with the request.

  12. I’d just be interested in what they say. I’ve looked at quite a few documents in a lot of Katrina cases, purely for informational and educational purposes, including denial letters. I’m curious because the stance you describe is contrary to the position of insurers in court and in depositions, it would seem odd to me that they would take a position in court that is obviously contrary to what they say in another case. Anything is possible.

  13. anonymous

    the comment senter is biased because he put burden on insurance companies is wrong. these are diversity cases. that means the federal judge applies state law. the mississippi supreme court has long put the burden of proving an exclusion on the carrier claiming it. likewise if senter directs a verdict its because carrier did not prove its case. parties who have the burden of proof often have verdicts directed against them if they fail to prove their case