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.