Insurance Dispute Lawyer Blog

If a homeowner insures his home and then suffers damage to the structure, the process of making a claim and being paid for the loss can be long and frustrating. Frequently, the insurance company will arrive at its value of the loss and attempt to persuade the homeowner to accept that value, even if it doesn't reflect the homeowner's actual costs of repair. In such a case, the homeowner should check his policy for an "appraisal clause." This provision provides for an alternative method for setting the value of the property damage. An appraisal procedure requires the homeowner to obtain an independent appraiser to survey the damage and assign a value to the loss. Similarly, the insurance company must hire an independent appraiser to perform the same analysis. The two appraisers must petition the court for the appointment of an umpire who will then oversee the negotiation of the settlement based on the two appraisals. Once any two of the parties--the appraisers and/or the umpire--agree as to the value of the loss, the matter is settled.

In Louisiana, like other states, flood insurance policies are underwritten through the National Flood Insurance Program (NFIP) and administered by the Federal Emergency Management Agency (FEMA). The NFIP authorizes private insurance companies to issue policies and handle the claim settlement process. Claims are actually paid by the federal government. FEMA requires that all NFIP flood insurance policies include an appraisal clause.

After their was heavily damaged by flood in Hurricane Katrina, William and Cynthia Dwyer filed a claim with their flood insurer, Fidelity National Property and Casualty Insurance Company. The Fidelity policy was issued through the NFIP. The Dwyers disagreed with Fidelity's offer of settlement and took the dispute to the District Court for the Eastern District of Louisiana. The court entered judgment for the Dwyers, and on appeal by Fidelity, the Fifth Circuit Court of Appeals vacated the judgment and ordered the parties to submit to the appraisal process as outlined in the policy. The Dwyers and Fidelity sought appointment of an umpire, who then submitted to the district court an appraisal that included the amount of actual damage to the Dwyer home as well as a "mark-up for overhead and profit" intended to cover the cost of a general contractor to make the repairs. Fidelity accepted the umpire's figure on damages but objected to the addition of the mark-up because the Dwyers had already sold the house and would not have any role in the repair itself. The Fifth Circuit agreed with Fidelity that "the award of overhead and profit was erroneous" and noted that "Fidelity told the district court that absent the improper award of overhead and profit, it agreed with the umpire’s appraisal." Thus, determining that Fidelity and the umpire were in agreement on the amount of the loss, the court entered judgment ordering Fidelity to pay the Dwyers $1,552.51. This amount represented the umpire’s appraisal amount less the erroneous overhead and profit, the policy deductible, and the amount Fidelity had already paid out to the Dwyers.

The appraisal process seeks to take the potentially emotional settlement of an insurance claim out of the hands of the homeowner and the insurance company and leave the decision to disinterested, expert third parties who have no connection to the outcome. Although the process is generally more cost-effective and expedient than litigation, a homeowner should consult with an experienced attorney to ensure the procedure is properly followed and his rights are protected.

Continue reading " Dispute Over Hurricane Katrina Home Repair Shows Role of Appraisal Process in Insurance Settlements. " »

Class actions are a common and popular legal tool for cases involving a large group of people who share the same grievance against a defendant. Specifically, the plaintiffs have to have a real and actual interest in order to join a class action. An issue may arise however, if a plaintiff's interest is called into question. In particular, whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted against a defendant. Essentially, the plaintiff's have to share the same type of complaint and injury in order to form a proper class action. Many times, defendants will allege that the class action was improperly certified (allowed) in order to invalidate any complaints against them.

In a recent Second Circuit Court of Appeal Case in Louisiana, the court explored the certification of a class action in order to determine whether or not it was proper. The facts of the case include the plaintiff, representing a class of individuals, who all share a grievance against a funeral home, owners of the funeral home, and numerous banks. The gist of their complaint is that the funeral home sold prepaid funeral expenses to the plaintiffs and other putative class members. The owner of the funeral home then deposited their payments into certificates of deposit (COD) with one or more of the banks named as defendants. The bulk of COD's were under names which included the Funeral Home, followed by either "payable on death," or "for the benefit of" followed by the name of the individual whose prepaid funeral funds were being held on deposit. The issue became that without presentation of a death certificate as required by Louisiana statute, the law governing prepaid funeral services, and in breach of the banks' contracts, namely, the certificates of deposit, the funeral home was allowed by the banks to withdraw the funds which they converted and appropriated for their own use. The plaintiffs argue that by accepting the deposits, the defendant banks became commonly liable with the funeral home. Yet, the appellate court is charged with the responsibility to determine whether the class action should be certified, despite the fact the trial court denied the class's certification.

A class action must have certain definite characteristics. First, the class must be so large as to make individual suits impractical. Second, there must be a legal or factual claim in common between all the plaintiffs involved. Third, the claims or defenses must be typical of the plaintiffs or defendants. Fourth, the representative parties must adequately protect the interest of the class. Further, in many cases, the party seeking certification of a class must also show that common issues between the class and the defendants will predominate the proceedings, as opposed to individual fact-specific conflicts between class members and the defendants and that the class action, instead of individual litigation, is a superior vehicle for resolution of the disputes at hand. Here, the class certification, the plaintiffs sought to certify a class defined as "all individuals from whom the funeral home appropriated and converted funds collected by them for prepayment of funeral expenses." Additionally, the motion asserted common questions of law and fact including:

1. whether the funeral home appropriated and converted funds of the class members in violation of La. R.S. 37:861; 2. whether the defendant banks released the class members' funds in violation of La. R.S. 37:861 and the banks' contracts; and 3. whether the defendant banks released funds belonging to the class members without obtaining death certificates.

The trial court denied the plaintiff's motion for certification of a class action as a result of a weighing and balancing determination. The trial court found that the plaintiff's did not satisfy the class action requirements, stating that the evidence was insufficient to show that the class was so numerous and geographically dispersed that joinder would be impracticable, that the class representatives would adequately represent the putative class members, or that their claims are typical of those of the putative class members. Essentially, the trial court felt that each claim was too individual, and that it would be difficult to consolidate the claims and form one basic legal grievance against the defendant funeral home. The appellate court analyzed each of the trial court findings in order to determine whether or not the plaintiffs actually had a class action, concluding that they indeed did not have a proper class action.

The appellate court concluded after exploring all of the factors that the plaintiffs failed to fulfill all of the requirements to have a proper class action. Specifically, the plaintiffs never alleged a relationship with the banks involved with the funeral home. Absent any connection of dealings with the banks, the plaintiffs do not have a real and actual interest in a suit against the banks. Only those persons whose prepaid funeral funds had been deposited by the funeral home with a specific bank would have a real and actual interest in a suit against such bank. Further, the appellate court denies class certification based on the plaintiffs argument that a plaintiff may have standing to sue a defendant with whom he has had no business contact or dealing, if the defendant's conduct is part of a conspiracy. Yet, no conspiracy was alleged among the defendants named in the action. In conclusion, the appellate court, as did the trial court, found that the plaintiffs did not belong to the class of persons to whom the law grants the cause of action asserted against the banks in the suit. Thus, the class action was denied. Class actions are a great tool for many cases, however, they must be properly formed and fulfill all of the legal requirements in order to move forward.

With little details available, the residents of New Iberia sit and wait to find out more about an explosion that took place at the Multi-Chem plant. Conflicting reports exist regarding harm caused by the incident, though the most recent release states all plant employees are accounted for and there were no reported injuries.

A 1-5 mile evacuation has taken place with residents encouraged to leave or, at worst, remain inside.

More information will be available on our Personal Injury blog as it becomes available.

General maritime law holds that there can be no recovery for economic loss absent physical damage to or an invasion of a proprietary interest. The issue in many cases is whether or not any actual damage has occurred. In a recent Fifth Circuit Court of Appeals decision, the court explores this very issue in order to determine whether the plaintiffs damages warranted recovery. Throughout the Mississippi River, refineries and various businesses operate, utilizing the river's shipping channels to transport their goods and perform many of their business operations. However, if the river is blocked in any way, it hinders their production and hence, their ability to maintain scheduling and perform necessary tasks. The mere absence of access does not constitute physical damage, yet, it does constitute an injury to one's proprietary interests. Thus, the court has to make the determination of whether or not the injured party was injured and in what way to make a ruling on any potential recovery.

The facts of the recent maritime case involve a plaintiff business who owns and operates a hydroelectric station on a privately owned channel from the Mississippi River. Near the plaintiffs property is the Mississippi River Flood Control Structures at Old River in Concordia Parish, Louisiana. The River Flood Control Station is made up of the intake channel which diverts water from the Mississippi River, a dam structure which contains the turbines, generators, and other machinery of the station, and the outflow channel which directs water from the dam to the Old River/red River/Atchafalaya River. The plaintiff's owned the station and the surrounding property necessary for their business operations. On December 24, 2007 two tows operated by the defendant and a barge company collided on the Mississippi River approximately 2.5 miles upriver from the plaintiff's intake channel. As a result of the collision, several barges broke free from the tow then drifted downriver into the intake channel of the plaintiff's facility and became grounded on the east bank of the intake channel, lodging against the station. The physical damage may have resulted from one of the barges that had become lodged on the station, this physical presence obstructed the intake channel, which provided water to the turbine and generators of the plaintiff's electric power generation facility. The presence of the barge forced the plaintiff to reduce flow of water in the intake channel into the turbine and thus, its output of electricity to prevent the barge from sinking and to allow safe access to the barge for its removal. After six hours without any progress, the plaintiff's had to shut down six turbines and reduce the remaining two to minimum power because of the decreased flow of water directed to the turbines from the intake channel. In order to remedy the situation, a barge crane and a vessel were sent to enter the intake channel, offload the grounded barge's cargo, tow the damaged barge away from the station where a larger barge crane could unload the barge's cargo, so it could safely re-enter the Mississippi River. The entire process took almost ten hours to complete.

The plaintiff facility filed suit in a Louisiana state court seeking damages for the value of the electrical power it was unable to generate due to the physical presence and intrusion of the grounded barge. However, the trial court granted the defendant's motion for summary judgment, holding that no physical damage was evidenced and thus, under general maritime law, no recovery was available. Upon appeal, the fifth circuit explored the general maritime law in order to determine whether or not the summary judgment holding was correct. The appropriate legal rule to analyze the initial claim was to apply the Robins rule. The rule of Robins carries numerous legal meanings, including: refusing recovery for negligent interference with "contractual rights," as denying recovery for economic loss if that loss resulted from physical damage to the property of another. The rule's goal was to exclude indirect economic repercussions, which can be widespread and open ended. Here, the defendants argued that the plaintiff suffered no physical harm. However, the appellate court agreed with the plaintiff's, the mere presence of the barge in the intake channel, which was a functional part of the plaintiff's facility, interfered with the unobstructed flow of water in the channel, impairing the ability of the facility to operate as designed. Thus, the harm qualifies as damage to its proprietary interests as general maritime law indicates warrants recovery. After all, the plaintiff's had to actually turn off half of their business facilities machinery and reduce the power to the remaining two in order to allow the defendants the safe and speedy removal of their grounded barge. Without the plaintiff's mitigating acts (turning off the majority of their machinery) they would have ru the risk of incurring physical damage their entire hydroelectric station.

The Fifth Circuit held that based on the fact that the defendants barge entered the plaintiff's privately owned hydroelectric facility, causing the plaintiff's physical damage to their property and invasion of their proprietary interest, they reversed the judgment of the district court dismissing its claims on summary judgment and remanded. this case illustrates that maritime law is a difficult and often complicated legal journey. In order to effectively protect your legal rights one should hire a competent and effective attorney.

Continue reading " The Fifth Circuit Explores a Maritime Dilemma in Barge Wreck " »

A partnership is a legal relationship that carries with it certain rights and obligations. Whether or not two or more persons have alegal partnership may become an issue. Our law defines a partnerhsip as a

"juridical person, distinct from its partners, created by a contract between two or more persons to combine their efforts or resources in determined proportions and to collaborate at mutual risk for their common profit or commercial benefit."(La. C.C. Art. 2801).

However, a legal and valid partnership may be established without a written agreement or contract, circumstantial proof may be offered to maintain that there was indeed a partnership. All of the surrounding facts are taken into consideration and explored by the court in order to determine whether a partnership had been formed, and to what extent each partner was involved. Thus, the facts are extremely important when an alleged partnership is created without any written documentation to support that contention.

In a recent Second Circuit Court of Appeal Case in Louisiana, the court analyzed the plaintiff and defendant's relationship in order to decide whether or not a partnership had existed between them. The facts consists of a duo who were romantically involved and lived together for an extended period of time. During their relationship, the defendant boyfriend approached the plaintiff girlfriend about starting a construction business together. The defendant had expertise and knowledge in the area, whereas the plaintiff had little if any, thus, he was relying on her more for the financial support versus any actual construction knowledge or managerial work. once they agreed on the type of construction operations they would be performing, they formed a company name and soon thereafter began small construction jobs around their community. They were approached by a third party construction company who showed interest in combining his construction company with the couple's and forming a limited liability company (LLC). This is the point in the facts where the defendant faces a dilemma. The defendant was not included as a member of the L.L.C. because he was under a child support obligation to his former wife and he and the plaintiff wanted to protect their initial construction company from consideration in his child support proceedings. Further, the defendant had very poor credit and several outstanding judgments against him, therefore, it was in the best interest of the company, to put everything only in the plaintiff's name. Both the plaintiff and defendant were paid nominal salaries, however, they constantly used the company's funds for house hold bills and personal finances. Soon, the couple experienced problems and split apart, the plaintiff refused to allow the defendant access to any company records or funds and took the position that she was the sole owner of the company and the defendant a mere employee. Upon being prohibited any access to the company, the defendant filed suit, alleging that he and the plaintiff were business partners, each owning one-half of the initial company. He sought recognition as a co-owner of the company and requested partition of the company's assets. However, the plaintiff denied the existence of any partnership, thus, relying on the state filings of the L.L.C. which listed her as the company's sole owner. Thus, the question became, did they indeed have a partnership?

The trial court granted the plaintiff's counsel moved for involuntary dismissal which was granted. The Louisiana civil code of procedure article 1672 states,

"In an action tried by the court without a jury, after the plaintiff has completed the presentation of his evidence, any party, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal of the action as to him on the ground that upon the facts and law, the plaintiff has shown no right to relief. The court may then determine the facts and render judgment against the plaintiff and in favor of the moving party or may decline to render any judgment until the close of all the evidence."

The trail court determined that despite the five witnesses the defendant offered, that the evidence taken as a whole, did not show that the fact or cause sought to be proven was more probable than not. Yet, on appeal, the dismissal was reviewed, taking into consideration what a partnership consists of and how it may be created. When there is no written agreement, as was the case between the parties, the existence of a partnership may be established by proof that the alleged partners agreed to form a partnership and participate in the profits to accrue from the business in determined proportions, to share in the losses as well as the profits of the partnership, and to have the property or stock of the partnership forma community of goods in which each party has a proprietary interest. Essentially, they must intend to have a business relationship between them that illustrates the major characteristics of a partnership. After reviewing the facts, the appellate court determined that the parties had agreed to form a construction business, operating it together, obtaining small jobs before the L.L.C. was even formed. Further, both the parties salaries were drawn from the company's profits, and deposited into one bank account, allowing them to pay their shared living expenses. Lastly, the third party construction company owner testified that the plaintiff assured him that the couple was in partnership and that the defendant would obtain his share of the company despite the fact that she was listed as the sole member of the L.L.C. Thus, the appellate court reversed the involuntary dismissal, finding that the parties had in fact formed a partnership.

A partnership is a legal relationship that can be entered into by mere verbal agreement. A written contract or agreement is not necessary, thus, one must be careful when agreeing to become involved in any type of business venture without realizing the potential consequences. Legal advice is always encouraged, especially in light of the financial costs that go hand in hand with entering into a partnership. Thus, if you are considering entering into a business venture take heed the legal ramifications of entering into such a relationship.

Sony announced yesterday that the Playstation Network (PSN) is set to return by the end of this week. Reports indicate access began to be provided to users starting on May 15 with different regions being incrementally phased in worldwide. Questions remain, however, as to the extent of previous breaches of the gaming network's security and just how safe gamers are from having the incidences of May occur again.

With its restoration of access to Playstation and Qriocity users in US, Europe and Asia, Sony is ending a month of outage that was first spurred by a breech of the networks' security. As we explored previously, that Sony has admitted that the breech occurred due to the exploit of a known vulnerability opens a rather clear inquiry of just how negligent the electronics giant was in the matter. Down since April, the Playstation gaming network and Qriocity, a movie and music service, have been sorely missed by users that frequently accessed the services for their entertainment needs. However, with that access came the disclosure of information that is now likely in the open. What this information can be used for, and the subsequent ramifications for the users, remains to be seen but there is no doubt the courts will begin seeing discussion on the damages caused.

Sony has been adamant about the upgrades they have made to their system, stating they have "been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that [their] fans can again enjoy the first class entertainment experience they have come to love." This statement, made by Sony Executive Deputy Vice President Kazuo Hirai, also came with an expression of gratitude for the patience and support offered by fans. The reality of the situation, however, is that those whose information was disclosed have zero patience for an invasion of their privacy.

Preliminary reports from Sony claim that 100 million accounts were affected by the recent breech, though if this number is accurate remains to be seen. It is obvious, though, that this number of accounts is staggering and was definitively avoidable. This availability touches upon the definition of negligence in American law; what makes this case exceptionally unique is that accounts in Asia and Europe were affected as well. Regardless of its reach worldwide, the PSN breech has, according to Sony, led to 'considerable' security upgrades to the free service. What these upgrades involve remain a secret, obviously, but many in the technology industry question how many additional vulnerabilities Sony may be aware of and what action, if any, has been taken to shore them up.

Understanding your rights in a negligence case in which personal information is disclosed is important for people in Louisiana and across the country. Those 100 million users whose accounts were exposed should undoubtedly pursue legal representation as essential private details now lie in ill-intending hands. However, should the breech have included even more than the hundred Sony claims through connected networks or other system breeches, anyone affected should quickly position themselves to protect their legal interests immediately. By contacting an attorney, someone affected in a negligence claim can begin legal proceedings that protect their claim from timing out (prescription) or being handled without them (class actions, etc.).

Contact our offices today for more information regarding this case.