Friday, December 07, 2007

Federal Appeals Court Uses Mind to Balance Out Heart and Emotion in Katrina Insurance Case

Via BusinessWeek's $1M Katrina insurance verdict appealed:
State Farm Fire and Casualty Co. asked a federal appeals court Wednesday to throw out a $1 million punitive damage award to a Mississippi couple who sued the insurer for refusing to cover Hurricane Katrina damage to their home.

A three-judge panel from the 5th U.S. Circuit Court of Appeals heard arguments from lawyers on both sides of the case, which was the first among hundreds of Katrina insurance lawsuits to be tried by a jury in Mississippi. The court didn't immediately rule on State Farm's appeal.

At the conclusion of January's trial, U.S. District Judge L.T. Senter Jr. took part of the case out of jurors' hands and ruled that State Farm was liable for $223,292 in wind damage to the Biloxi home of Norman and Genevieve Broussard.

The jury subsequently awarded $2.5 million in punitive damages to the Broussards, but Senter later reduced that amount to $1 million. Bloomington, Ill.-based State Farm appealed the jury's verdict and several of the judge's rulings.

State Farm's experts concluded that Katrina's storm surge was responsible for most, if not all, of the damage to the Broussards' home. The company says its policies cover damage from a hurricane's wind but not its rising water, including wind-driven surge.

State Farm attorney Clark Holland said Senter made "numerous errors" in evaluating evidence in the case and shouldn't have allowed jurors to weigh punitive damages....


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