A Mississippi homeowner whose lawsuit over Hurricane Katrina damage ended with a jury verdict that favored his insurance company said Tuesday he has no plans to file an appeal in the case.
On Monday, an eight-member jury ordered USAA Casualty Insurance Co. to pay an additional $64,000 to policyholders David and Marilyn Aiken for wind damage to their Pass Christian, Miss., home and its contents during the Aug. 29, 2005, hurricane.
But that amount was only a fraction of the maximum $427,087 that jurors could have awarded to the Aikens for wind coverage under their USAA homeowner policy.
After the verdict, which capped a 10-day trial, U.S. District Court Judge L.T. Senter Jr. refused to let jurors consider punitive damages against USAA. Senter said “there is no substantial evidence that USAA was acting in bad faith” when it denied most of the Aikens’ claim.
USAA attorneys grinned and shook hands after jurors delivered their verdict, while the Aikens and their lawyers consoled each other.
David Aiken, 54, said Tuesday that he doesn’t expect to file an appeal with the 5th U.S. Circuit Court of Appeals in New Orleans. An appeal would be costly and would face long odds in a court that already has sided with insurers in several other Katrina cases, Aiken said of the 5th Circuit.
“I can’t keep up with the monies of the insurance companies. I can’t match them,” he said.
USAA spokesman David Snowden said the company is pleased with the jury’s verdict.
“At USAA, we investigate every claim thoroughly,” Snowden said. “We are pleased that the court acknowledged our legitimate efforts to find the cause of the damage and that the court concluded we had a justifiable reason for our claims decision.”
David Aiken, an orthopedist, and his wife live in the New Orleans suburb of Metairie, La. They used the Pass Christian property as a vacation home and had planned to retire there, but Aiken said Monday’s verdict means they won’t have enough money to rebuild.
“The real losers are the homeowners of Mississippi,” he added.
USAA already has paid the couple $178,204 for wind damage under their homeowner policy, which had total coverage limits of $582,750 for the dwelling and its contents. The couple also had a separate, federally subsidized flood policy that paid them $278,000.
The Aikens had accused San Antonio-based USAA and a Houston engineering firm, Rimkus Consulting Group Inc., of conspiring to deny the couple’s damage claim.
In their lawsuit, the Aikens say a Rimkus engineer initially concluded Katrina’s winds were strong enough to destroy the home: a “very favorable” finding for the homeowners. But the couple claims a Rimkus team leader later revised the engineer’s report to “mollify the language,” so their claim could be denied by USAA.
Last week, however, Senter dismissed Rimkus as a defendant in the case during the middle of the trial. Senter ruled the Aikens failed to show that Rimkus acted with gross negligence or malice, which was their legal burden for seeking damages against the engineering firm.
George Healy IV, one of the Aikens’ lawyers, disagreed with Senter’s ruling.
“I think it should have gone to the jury,” he said.
USAA, which blamed storm surge for destroying the Aikens’ home, said it already has paid the couple what they are owed. The company also denied conspiring with Rimkus to deny the couple’s claim.
The first federal trial in Mississippi against USAA over Katrina damage ended in September 2007 with a mid-trial settlement with policyholders Kevin and Sherrye Webster.
A jury had sided with the Websters and concluded wind, not flood water, destroyed their home in Bay St. Louis, Miss., but the settlement ended the trial before jurors could consider punitive damages.
Hundreds of Gulf Coast homeowners have sued insurers for denying their claims after Katrina. The companies say their homeowner policies cover damage from a hurricane’s wind but not its rising water.
Fewer than a dozen trials have been held in Mississippi for federal suits against insurers over Katrina damage. Several federal cases also have been tried in Louisiana, with equally mixed results for homeowners and insurers.
Topics Carriers Mississippi Homeowners
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