As discussed here, on November 7, 2007, a jury in the Eastern District of Louisiana awarded $365,000 to the Kodrins as against their homeowners insurer, State Farm Fire and Casualty Company, arising out of Katrina-related damages. In reaching its decision, the jury rejected State Farm’s defense as to why it did not initially pay the Kodrins’ claim (based on State Farm’s belief that non-covered flooding caused the damage to the home as opposed to covered wind damage). Two weeks after the jury’s verdict, the judge held that State Farm had to pay the Kodrins’ attorneys’ fees. The Kodrins’ lawsuit was the first Katrina-related trial to be held in the U.S. District Court for the Eastern District of Louisiana.
As further discussed here, on March 11, 2009, the United States Court of Appeals for the Fifth Circuit held that even though the jury rejected State Farm’s rationale for non-payment, the decision not to pay the claim was made with reason, and, therefore, State Farm did not act in bad faith. The Fifth Circuit vacated the district court’s award of penalties, damages and attorneys’ fees that had been awarded to the Kodrins.
We will continue to provide updates on this and other Katrina-related coverage litigation on InsureReinsure.com.
