Sen. Lott considers Katrina settlement with State Farm

Some time ago,  I read an opinion article in the Wall Street Journal slamming Trent Lott for using his power as a U.S. Senator to go after State Farm because he was mad over unpaid Katrina damage to one of his three homes. I then looked up the electronic docket for his case because I wanted to see if his case had been settled and dismissed.  Remember that Lott is among the 640 Mississippi policyholders included in an $80 million settlement engineered by attorney Dickie Scruggs and State Farm, and I figured Lott was done. Not so.  The docket showed that an amended complaint was filed in the case after the date of the announcement.  This story confirms that Lott is still trying to decide whether to accept the settlement or go to trial in June.  If you’re like me, you’d love to see that trial happen. I also see on the docket that a settlement conference is set for March 27.

And just in case you’ve got a fever and the only prescription is reading some briefs in this case, I have your medicine right here. Here is a pdf of State Farm’s motion to dismiss and here is a pdf of Lott’s opposition brief, both filed last year.  Here is Judge Senter’s opinion denying the motion to dismiss.  As with most Senter opinions, it is economical with words. 

One thing to note in Senter’s opinion, which followed his ruling in the Tuepker case deciding many of the same issues, is what the judge says about the ambiguity of the State Farm anti-concurrent provision.  Remember that the flood exclusion falls under the anti-concurrent language, and Senter upheld the exclusion as unambiguous.  In contrast, he said the anti-concurrent provision is ambiguous, but only to the extent it would be interpreted to exclude wind damage from coverage.  As I’ve explained in other posts, that is no big deal because you can’t have a good faith reading of the language that excludes wind: the anti-concurrent provision says that the policy does not under any circumstances insure "such loss," with those words plainly referring to the exclusions that follow and not to wind. That also raises a substantial question of whether the provision is actually ambiguous, or whether it is as clear as a baby’s conscience.

One interesting footnote in the State Farm brief takes a swing at Lott for alleging his house was entirely destroyed by wind when he made a claim under the National Flood Insurance Program for the flood insurance he had on the home.  Check out a pdf of Lott’s amended complaint, paragraphs 14 and 15 — he’s still saying the same thing!  The house was destroyed or nearly destroyed by wind, then destroyed again by surging flood waters. That’s bad luck. No matter what you think of Trent Lott, you’ve got to feel sorry for a guy whose house is destroyed twice in the same day. 

And yes, for those of you paying close attention, I did purposely write about State Farm, Scruggs and the Wall Street Journal in the same post, as an homage to some in the comments who have variously accused me of shilling for one or all of them. 


Filed under First Party Insurance

5 Responses to Sen. Lott considers Katrina settlement with State Farm

  1. Ted

    Rats: I thought you had caught Lott in double-dipping, but the complaint simply says that the destruction of his house was “proximately and efficiently” caused by wind, which suggests artful lawyering to claim that the flood exclusion doesn’t apply to storm surge.

  2. Ted, I think he may be double dipping, if in fact he has applied for and not withdrawn his flood insurance claim. Paragraph 15 says that when the storm surge hit, the home had already been destroyed or substantially damaged by wind. It also says — and this issue has already been decided against him by Senter — that the later storm surge was caused by wind. This is a carryover from the days when policyholders hoped to circumvent the flood exclusion. But the key thing is if a house has been completely destroyed by wind, that belies any claim one makes under flood policy paid for by the National Flood Insurance. If he did accept the flood money, at the very least his proof at trial will have to be limited to claiming wind damage to the value of the home above whatever payment he received from flood insurance.

  3. Joe Bingham

    I think the question on everyone’s mind is…
    Does Justinian Lane feel that a Republican like Trent Lott is, like other plaintiffs fighting big insurance, entitled to a presumption of heroism here?
    (Of course, maybe he’s answered that, and I’m getting here late.)

  4. Some may not know who Justinian Lane is — a blogger who writes at TortDeform. This is a fair question, especially as Lott is a powerful U.S. Senator not only suing an insurance company but messing with them in Congress.

  5. Joe – I had no idea my reputation preceded me such that everyone would be curious as to my opinion on this matter.
    Now, I have not read Lott’s complaint and have only very limited familiarity with the lawsuit. That said, here are a couple of generalizations I feel confident in making.
    1: If Lott (and others) are correct and State Farm improperly denied coverage, then Lott is a hero for using his power as a Senator to try and force State Farm to “do the right thing.” I can’t see how anyone can disagree that a Senator should try and use his powers to help his constituents; that’s one of the most important duties of an elected official.
    2: If Lott (and others) are incorrect, and State Farm properly denied coverage, then Lott is at worst a hypocrite, and at best an individual who should reconsider his hostile attitude towards plaintiffs.
    3: I’m less inclined to cut Lott any slack with regard to the purported ambiguity in his policy. He’s been an attorney for about 40 years now, and certainly should know not to sign a document he believes to be ambiguous.
    I join with David in hoping this case does in fact go to trial…