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$2.8M Katrina
verdict against Allstate
By MICHAEL KUNZELMAN, Associated Press Writer
http://news.yahoo.com/s/ap/20070416/ap_on_bi_ge/katrina_insurance
NEW ORLEANS - Allstate Insurance Co.
must pay a Louisiana man who lost his home to Hurricane Katrina more
than $2.8 million in damages and penalties, a federal jury decided
Monday in a case that hinged largely on whether it was wind or storm
surge that wiped out his house.
The jury found Allstate — which claimed most of the damage was due
to storm surge, an event not covered in its policy — did not pay
Robert Weiss enough money to cover wind damage to his home. The
verdict included a $1.5 million penalty for the company's failure to
pay the claim quickly enough.
"Our intention was to get what we were owed and to send a message
that we would not be intimidated," Robert Weiss said after the
verdict was read.
Allstate lawyer Judy Barrasso said in closing arguments that
Katrina's winds were not strong enough to do the damage. She said
Weiss already had received more than $400,000 in insurance payments
— including $350,000 in federal flood insurance.
"Have you really seen any proof that the damages were in the
million-dollar range?" Barrasso asked the jury.
The lawyer for the Weiss, whose home was in the Slidell area on the
north shore of Lake Pontchartrain, told the jury in closing
arguments that the house was too high above sea level to have been
destroyed by Katrina's storm surge. The eye of Katrina passed just
east of Slidell on the morning of Aug. 29, 2005.
The lawsuit against Northbrook, Ill.-based Allstate was the second
Katrina damage claim to come to federal trial in New Orleans.
Hundreds of similar disputes are pending in Louisiana and
Mississippi.
In addition to federal flood insurance, Weiss had an Allstate
homeowner policy with limits of $343,000 for the dwelling and
$240,100 for personal property.
The company, blaming the majority of damage on Katrina's storm
surge, paid $29,483 for structural damage and $14,787 for additional
living expenses.
Richard Trahant, lawyer for Weiss, argued the house was 17 feet
above sea level and that engineering data suggested only 14 feet of
surge hit the area. "It never reached the bottom of the house," he
said.
Allstate's Barrasso said sustained winds at the house did not exceed
100 mph.
"There was plenty of evidence to show the winds were not strong
enough to topple this house and the storm surge was," she said.
Jim Neva, a surveyor and engineer who inspected the house for
Allstate, initially told Robert Weiss, who is listed as the policy
holder, and his wife, Merryl, that wind may have destroyed the home
before the surge of water washed away its remnants.
He later backed off that conclusion, however, and deferred to
engineering consultant Craig Rogers of Rimkus Consulting Group.
Rogers, who wrote the final report on the home for Allstate,
convinced Neva that storm surge demolished the house.
Rogers said he didn't personally inspect the property until after he
wrote the report. He said he based his conclusions in part on
evidence gathered by other Rimkus engineers — a practice he
described as common. But Trahant questioned the move.
"Why did Allstate elect to rely on the one engineer who never set
foot on the property until long after he stamped his report?"
Trahant said in closing arguments.
Allstate also had claimed the Weisses misrepresented part of their
claim.
The company said the couple asked Allstate to pay for a boathouse
that was not covered by their policy. The company argued a
policyholder who misrepresents even part of a claim voids all
coverage.
"I think the jury saw right through it," Trahant said of the
misrepresentation defense after the verdict was read. "I think the
jury saw it as a last grasp at a straw that wasn't there."
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