Miss. Wind vs. Flood Lawsuit Remanded Back to State Court

By Dave Kaiser
March 13, 2006

The Mississippi lawsuit to force insurance companies to honor their policies and pay for damage caused by storm surge has been remanded back to the Chancery Court of Hinds County. Since the state is seeking injunctive, the case will now be expedited, according to the State Attorney General's Office.

"As I stated when the Insurance companies moved this to federal court, their attempt was nothing but a delay tactic," Jim Hood, Mississippi Attorney General said. "The insurance industry is using delay tactics in hopes that many Mississippians will give up on their claims and take whatever the insurance companies offer. I hope people will hold on just a little bit longer and let us get a decision on this case."

Hood filed a civil action in the Chancery Court of Hinds County, Miss. First Judicial District on Sept. 15 against the insurance industry to protect Mississippi's property owners who incurred damage from Hurricane Katrina.

"The insurance companies have already caused a six-month delay by taking this to federal court under a false premise," Hood said. "I think it is shameful that the insurance industry would drag this out while people are living in limbo. I just want to know how much money they've saved themselves holding on to these people's money?"

A statement from the Attorney General's office said the lawsuit seeks to make the insurance industry honor their contracts to pay for losses caused by Katrina, particularly their attempt to exclude damage caused directly or indirectly by water, whether or not driven by wind.

"I want to reassure Mississippians who have already been victimized by Katrina that I am doing everything I can to keep them from being victimized again by the insurance companies," Hood said. The next step for the case is a hearing in Chancery Court which the Attorney General's office will request as soon as possible.

Commissioner Dale: Will act accordingly

"My position is that whatever the courts decide, we will act accordingly," Mississippi Insurance Commissioner George Dale told Insurance Journal. "The case is still in litigation whatever is determined will give us guidance about what to do.

AIA: Not unexpected

Although we would have liked for the Mississippi case to stay at the federal court level, the court's action is certainly not unexpected due to the legal issues involved," explained Julie Pulliam, American Insurance Association Public Affairs director for the Southeast Region. "We are still confident that ultimately Mississippi state courts will uphold the water damage exclusion, although we have to acknowledge that there may be more pressure at the state court level to provide relief to fellow citizens."

Bailey: Dissapointed

"I am disappointed in the results, I need to study the judge's opinion in order to perceive just how he arrived at the conclusion that he did in sending it back to the state level," Bill Bailey, director of the Insurance Information Institute said. "It seemed to me that this was a clear-cut case of federal preemption. This case belongs in the federal court and I thought that was removed and I haven't seen anything to change my mind about that issue.

"If it is a federal preemption there may lie an appeal at some point that the judge should have not have sent the case back to the state," Bailey said. "There are several options, the defendant can decide to go to the Federal Court of Appeals and take an interlocutory appeal while the case is in its current posture they can go to the next level of Appellate Court and say, 'We think that judge was wrong we want you to rule that he was wrong and that this case belongs in federal court.'"