One down, hundreds to go.
That’s the tally for a federal judge who ruled this week in favor of Nationwide Mutual Insurance Co. in the first trial to challenge insurers for refusing to cover billions of dollars in damage from Hurricane Katrina.
U.S. District Judge L.T. Senter, who is hearing virtually all the Katrina lawsuits in Mississippi, now has his sights set on finding a way to quickly and fairly resolve hundreds of similar cases.
On Monday, Senter sent a letter soliciting advice from the roughly 180 attorneys involved in these cases. He asked them if they would support “some form of representative trial,” where cases would be tried among groups of plaintiffs instead of individually.
That same day, however, Senter refused to allow a group of homeowners to join in a single lawsuit against State Farm Fire and Casualty Co. The judge said a class-action lawsuit isn’t appropriate because the nature and extent of the damage to each plaintiff’s home varies widely from case to case.
State Farm spokesman Phil Supple said each case “deserves to be decided on its own merit.” However, Richard Phillips, a Batesville attorney who asked Senter to certify the class-action suit, said homeowners can’t afford to wait years for their cases to be tried, one by one.
“In mass disaster situations, it is in the financial interest of companies to simply deny claims across the board, forcing homeowners to litigate each claim,” Phillips said in a prepared statement.
Senter’s groundbreaking decision Tuesday stemmed from a lawsuit that Paul and Julie Leonard of Pascagoula filed against Nationwide for refusing to cover all but $1,661 of the estimated $130,253 in damage to their home.
The judge ruled that the company’s policies cover damage from wind but not from flood water, including wind-driven “storm surge.” He also said Nationwide’s policies contain “ambiguous” language that it has used to deny claims in cases where damage resulted from a combination of wind and water.
Those two conclusions closely mirror Senter’s previous rulings in other Katrina cases, legal experts and industry officials said.
“It’s an important case, but there are a lot of cases left,” said Jim Whittle, assistant general counsel for the American Insurance Association. “It remains to be seen whether and how it will affect all of them.”
The next trial for a Katrina insurance case is scheduled for January. In the meantime, other lawyers with Katrina lawsuits insisted that Tuesday’s ruling didn’t weaken their cases.
“We learned from this case. We’re more prepared now than we ever have been,” said Gulfport attorney William Weatherly, whose firm represents between 220 and 250 Gulf Coast homeowners who sued their insurers after the Aug. 29 storm.
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