A federal jury awarded $70,000 to a Louisiana financial executive who sued Boston-based Lexington Insurance Co., seeking more than $750,000 for his Mobile Bay, Ala., vacation home that crumbled under Hurricane Katrina’s winds and waves.
The homeowner, Richard Preis of Baton Rouge, was disappointed with the judgment and planned to appeal it. Before the verdict, the company had offered Preis $64,000 on his claim.
“The verdict was well supported by the evidence,” said New Orleans attorney Robert Siegel, who represented Lexington. He declined further comment.
The dispute centered on whether it was Katrina’s 85 mph wind gusts or the six-foot floodwaters that shattered the 4,500-square-foot home in Point Clear, a shady retreat near Fairhope. Lexington was not obligated to cover damage from storm surge.
Replacing the home could cost $1 million, according to testimony.
Preis, who sells stocks and bonds, and his wife, Victoria, have collected about $600,000 – the maximum amount available from two other flood insurance policies.
U.S. District Judge William Steele earlier ruled out an attempt to collect from Lexington on the home’s contents, estimated at about $700,000, because it couldn’t be determined whether wind or flood destroyed the furnishings.
In closing arguments Wednesday, Siegel defended the insurance company’s handling of the claim, saying Katrina’s wave surge knocked out the walls, not the hurricane’s winds.
The jury did not specifically say what it thought caused the damage.
Similar disputes between Katrina victims and insurance firms have surfaced in courtrooms on the coast two years after the hurricane’s catastrophic blow to Louisiana and Mississippi.
Katrina caused less damage in Alabama from Dauphin Island up the west side of the state.
Attorney Phillip Preis, who handled his cousin’s case, told jurors to consider the question: Did the maximum wind hit the house before the water?
But Siegel argued that the gutters and downspouts on the house were intact after the storm and that the floodwaters knocked out the studs, causing the house to fill with debris.
“Storm surge – not winds – caused the walls to fall,” Siegel said, pointing to photos of the damage viewed by jurors on video screens set up in the jury box.
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