Tomlinson v. Allstate Katrina Case Suddenly Dropped In Midst Of Trial

You don’t very often see plaintiffs just drop their lawsuit right before it goes to the jury, but that’s what happened in the Tomlinson v. Allstate case in the U.S. District Court for the Eastern District of Louisiana.  No monetary settlement, apparently.  They just dropped it.  Here’s a good story on it from Michael Kunzelman of the Associated Press.  The Tomlinsons’ home was destroyed by Hurricane Katrina and Allstate paid them roughly $150,000 for wind damage and living expenses.  They said the wind damage was more extensive, and sued Allstate for breach of contract and bad faith.  Here’s a prior post I did on the case.

Why did the Tomlinsons drop their case at this point? The story refers to the effect of alleged material misrepresentations made by the Tomlinsons about their damages.  So I looked up a brief on the alleged misrepresentations filed by Allstate, and here is a pdf of that brief.  As you can see, the brief alleges the Tomlinsons falsely claimed they executed a lease on some property after their home was destroyed , and then claimed the amount of the lease as part of their damages.  The brief, which I’d have to classify as some pretty good writing, contained arguments that a material misrepresentation on damages voids the entire policy, and does not merely negate the part of the damage claim that is false.

The brief said that the amount of the supposed lease was part of the $30,000 in additional living expenses Allstate had already paid to the Tomlinsons, and contained a fact that I did not know and that surprised me: Mrs. Tomlinson is herself an attorney.  It contained another surprising statement: the house where the Tomlinsons allegedly executed the lease is their own former residence, which they owned.  So if that is true, any rent they paid, they paid to themselves. Whoa!  That changes everything. Here is a copy of the Tomlinsons’ response brief, which doesn’t truly deny the Allstate allegations, but instead argues the representations should not void the entire policy and that there  was no intent to deceive.  This brief was also good. 

UPDATE: I added a link to my prior post.

SECOND UPDATE:  Here is a link to a comprehensive story by the New Orleans Times-Picayune.

5 Comments

Filed under Bad Faith, First Party Insurance

5 Responses to Tomlinson v. Allstate Katrina Case Suddenly Dropped In Midst Of Trial

  1. Tomlinson v. Allstate Insurance

    The federal Louisiana Katrina insurance lawsuit was dropped right before it went to the jury, presumably in a walk-away settlement to avoid sanctions after it was revealed that the plaintiff couple (the wife of which is a lawyer) triple-dipped a…

  2. Scott Jonsson

    Cases like this coupled with all of the coverage issues will make reconstruction of the gulf coast a goal for our grandchildren. Lord help us when the next natural disaster occurs and insurance policies are at issue.

  3. Michele

    I cannot believe you posted this post, without reading all of the briefs in this case. Allstate didn’t plead misrepresentation until 3 weeks prior to trial. This was a calculated move on their part to sandbag this couple. Please note Allstate insured the building the couple lived in after Katrina, and KNEW they were living there but claimed in court documents they didn’t know. Couple that with an unfavorable judge and you see what happens. It’s a travesty and this people didn’t deserve it!

  4. Michele, I think I read a pretty fair amount of the pleadings, motions, orders and briefing, certainly more than would be the norm. I wrote two posts that contain links to many of the pleadings and briefs in the case, and I read quite a few more that I didn’t link to. I think my education on this case was above average, but I don’t claim to know everything.
    I think it’s debatable whether when an assertion of fact qualifies as a misrepresentation and certainly it is highly debatable when a misrepresentation is material and whether it is material in a way that would justify forfeiture of the policy. It may be that Allstate insured the other residence, and from that, I would expect you could make a decent argument that an alleged misrepresentation about which the other side knows the truth is not something they could justifiably rely on, and it is therefore not material. The Tomlinsons’ brief contained a form of this argument, but not stated as directly as I put it. However, in two posts I did link to many of the most important documents in the case, and the fact remains that for some reason the Tomlinsons decided to dismiss the case rather than let the jury decide, as they argued should happen in their response brief. Why that was, and what happened behind the scenes, I do not know. Maybe someone close to the Tomlinsons could shed more light on that.

  5. Crawg8rz

    The Tomlinsons have been our landlords for several years in New Orleans. From our standpoint they are the only landlords we know who decided on ethical grounds not to raise rent post Katrina. It is unfortunate to see an insurance company ‘triple-dip’ by getting a notch in the proverbial belt, weaseling out of an otherwise cogent lawsuit, and humiliating these fine people in the process.