Katrina victims lose in appeals court

[HURAKAN]

Katrina victims lose in appeals court
http://news.yahoo.com/s/ap/20070802/ap_ ... _insurance

NEW ORLEANS - Hurricane Katrina victims whose homes and businesses were destroyed when floodwaters breached levees in the 2005 storm cannot recover money from their insurance companies for the damages, a federal appeals court ruled Thursday.

The case could affect thousands of rebuilding residents and business owners in Louisiana. Robert Hartwig, chief economist at the industry-funded Insurance Information Institute in New York, said in June that a ruling against the industry could have cost insurers $1 billion.

"This event was excluded from coverage under the plaintiffs' insurance policies, and under Louisiana law, we are bound to enforce the unambiguous terms of their insurance contracts as written," Judge Carolyn King wrote for a three-judge panel of the 5th U.S. Circuit Court of Appeals.

As a result, the panel found those who filed the suit "are not entitled to recover under their policies," she said.

More than a dozen insurance companies, including Allstate and Travelers, were defendants.

The decision overturns a ruling by U.S. District Judge Stanwood Duval Jr., who in November sided with policyholders arguing that language excluding water damage from some of their insurance policies was ambiguous.

Duval said the policies did not distinguish between floods caused by an act of God — such as excessive rainfall — and floods caused by an act of man, which would include the levee breaches following Katrina's landfall.

But the appeals panel concluded that "even if the plaintiffs can prove that the levees were negligently designed, constructed, or maintained and that the breaches were due to this negligence, the flood exclusions in the plaintiffs' policies unambiguously preclude their recovery."

"Regardless of what caused the failure of the flood-control structures that were put in place to prevent such a catastrophe, their failure resulted in a widespread flood that damaged the plaintiffs' property," and policies clearly excluded water damage caused by floods, King wrote.

This was a consolidated case, including about 40 named plaintiffs, including Xavier University, and more than a dozen insurance companies. It is just one of the cases pending in federal court over Katrina damage. The Army Corps of Engineers faces thousands of claims for damage resulting after the levees breached; King noted in her opinion that dozens more cases, some consolidated and involving property owners suing insurers, are pending in federal court in New Orleans.

Allstate spokesman Mike Siemienas said the Illinois-based company is pleased with the court's findings. Several other attorneys, on both sides of the case, did not immediately return telephone messages or declined comment.

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Associated Press reporters Janet McConnaughey and Kevin McGill contributed to this story.
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Poor people of New Orleans. No house, no business, no money, and a life damaged forever.

[HollynLA]

This doesn't surprise me one bit. My insurance has increased dramatically since Katrina and I'm now paying 4K per year for homeowners alone. What doesn't make any sense though is that the private insurance companies paid out the least amount compared to federal flood insurance but yet it's the private insurance companies that have had the highest increase.

Btw: I think this thread is best suited for hurricane recovery board.

[TSmith274]

Just remember... This doesn't say that the U.S. Army corps is not negligent. It just says that the drainage canals were not navigable waterways. It must be a navigation project for the Corps to be responsible. They are immune from responsibility on flood control projects. If they are negligent on flood control structures, they are still immune from lawsuits.

[DanKellFla]

There is such a thing as "Soverign Immunity" that any government entitiy has. So, that Corps could try that path. But that is best left for the lawyers to decide. Instead, how about a "buyout package" that was similar to the one the airlines had after 9/11? What was that? 20 billion dollars? At least that would be a start.
But that ruling stinks.

[MGC]

The 17th street canal was indeed a nagivable waterway to a degree. Bucktown had a fleet of shrimp boats berthed there. It was between old Hammond Hwy and Vets Blvd. What a cheap excuse. What about the MRGO? That was build by the COE.....MGC

[TSmith274]

The 17th street canal was indeed a nagivable waterway to a degree. Bucktown had a fleet of shrimp boats berthed there. It was between old Hammond Hwy and Vets Blvd. What a cheap excuse. What about the MRGO? That was build by the COE.....MGC

Well, I was thinking about a different lawsuit. This lawsuit lets the insurance companies off the hook for flooding that occured due to levee failures. Basically, people who did not have flood insurance were suing to get coverage from their homeowners policies, claiming that man caused the flood and not nature. The courts, citing many past cases including forest fires caused by arson beat back that argument with precedent. It is confusing, but it basically says that you still need flood insurance, no matter what causes the flood.

The insurance companies are off the hook. However, the suit against the corps of engineers involving the 17th St. Canal and the MRGO are still pending. The Corps has problems with that suit. The 17th St. Canal was indeed navigable to a degree. And the MRGO was built for navigation purposes only. They seem liable in that case. But the ability of the Corp to pay in that suit is questionable... as the claims against them in that suit are in the billions.