Tax Credits for Hurricane Damage

Careful Review of Home Insurance Policy Crucial

Published on: July 14, 2014 | By Berniard Law Firm

It is extremely important to review your home insurance policy to determine what types of damages the policy will actually cover, especially in areas prone to suffer from hurricane damages. Under Louisiana law, the insured individual is required to first prove that the insurance policy covers the cause of the claim. For example, if the policy only covers certain types of causes of damage, such as wind and hail, then the insured must prove that the damage was in fact caused by either wind or hail. Once the insured has done this, then the insurance company can argue that the incident is not covered by the policy. Therefore, it is extremely important that the insured take the time to determine the cause of the damage in order to prove that the policy covers their claim.

A case arising from Lake Charles, Louisiana illustrates this point. In this case, a homeowner suffered roof damage that they believed was caused by Hurricane Ike around September 13, 2008. Four shingles were missing and the insured claimed that this resulted in leakage in several rooms of the home. However, State Farm, the homeowner’s insurance company, determined that the leakage was not caused by Hurricane Ike and reclassified the claim as a “non-hurricane” claim.

State Farm, using several experts, determined that the leakage resulted from normal wear and tear on the roof, and therefore the homeowner’s insurance policy did not cover the leakage damage. Instead, State Farm concluded that only the four missing shingles were the result of wind and that they were the only damages that State Farm should reimburse to the insured; State Farm did not reimburse the insured for the damages caused by the leakage, but just the replacement value of the four damaged or missing shingles. The total damages that State Farm paid were under $500.00.

The insured had damages that were estimated at $9,385.00 by one expert and $204,717.78 by another expert. However, while these experts estimated what the cost of the leakage damage and repairing the roof would be, neither expert determined the actual cause of the damages. One of the insured’s experts thought that the wind had lifted the house’s flat roofing, which allowed water to enter the home. However, the expert could not explain why the nails on the flat roofing were still in place if the wind had lifted it. The State Farm expert, on the other hand, determined that the wind damage only included those four damaged or missing shingles and the leakage was actually caused by normal wear and tear. The State Farm expert concluded that there was “no evidence of roof damage that would be caused by severe weather . . . . The roofs, both asbestos shingle and built up roofs and all associated flashings are past their life cycle and are in need of replacement.”

The insured’s policy did not cover “poor workmanship; wear, tear, deterioration, or latent defect; settling, cracking, or expansion of walls, roofs, or ceilings; or leakage of water from air conditioning systems, household appliances, or plumbing.” Since the State Farm expert determined that the cause of the damage was from normal wear and tear, there was no way that the insured could satisfy the requirement to prove that the policy covered his claim. As such, the court granted State Farm summary judgment.

The court will grant summary judgment where one party cannot meet their required burden as a matter of law at trial. Summary judgment allows the court to avoid costly trials where there is one clear winner before the trial even begins. In this case, where the insured had no evidence that all of the damage he was claiming was caused by an occurrence included in the insurance policy, the court determined that summary judgment was appropriate. If the insured had employed experts that specifically testified as to the cause of the leakage damage, then the court may have allowed the case to proceed to trial. Further, the insured could have made a more diligent effort to report leakage as it occurred, which would help prevent the damage from spreading in the long run.

This case illustrates several very important points for the average homeowner. First, you should carefully read your policy so that you know what type of damage is covered. Second, if necessary, you may need to acquire experts that can explain what caused the damage to your home. Lastly, report damages immediately so that you can avoid costly repairs later on. Continue reading

Understanding the Federal National Flood Insurance Program as Hurricane Season Approaches

Published on: April 17, 2013 | By Berniard Law Firm

The Federal National Flood Insurance Program (“NFIP”) is a federal program that allows homeowners to protect against flooding because most homeowners insurance does not cover flooding (You can check out their website here). It is offered to homeowners, renters and some business owners. The federal government works with private insurance companies to encourage them to offer insurance. The government sets a standard rate and then the insurance is actually through the private insurance company, but involves the federal government to a great degree. The federal government underwrites, or supports the insurance company, but the private insurance company does all of the related administrative tasks.

Because of the federal government’s involvement, when there are issues with the insurance company, you must follow unique litigation paths in order to recover for any damages in many occasions. For example, the federal government will normally cover any litigation costs for the private insurance company. As such, some procedures that would normally be acceptable at the state level may not be allowed in the federal court.

A case in Mississippi that was appealed to the Fifth Circuit Court of Appeals helps explain these differences. In that case, Grissom, the insured individual, had insurance under the NFIP through Liberty Mutual. He was eligible for a preferred risk insurance policy, but did not know he was eligible. After Hurricane Katrina, he argued that he would have purchased the preferred risk insurance policy if he had known about his eligibility.

Attorney Jeffrey Berniard makes New Orleans Magazine top lawyers list

Published on: April 4, 2013 | By Berniard Law Firm

Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

– What is Mass Tort Litigation? –

Happy Mardi Gras!

Published on: February 12, 2013 | By Berniard Law Firm

As a Louisiana law firm, our practice takes great pride and enjoyment from Fat Tuesday and all of the history that follows. For all of our readers in the New Orleans area, have a safe and happy holiday.

Postings will resume shortly. In the meantime, laissez les bon temps rouler!

Court Explains the Requirements of a Settlement Agreement

Published on: October 23, 2012 | By Berniard Law Firm

Recently, in the State of Louisiana Court of Appeal for the Third Circuit, a case was decided that effectively laid out the requirements of a settlement agreement. These requirements are especially important because many cases are settled before they get to court. In fact, settlement is often preferable because it saves a significant amount of time, money, and it allows the parties to reach a compromise that they not only come up with themselves, but that is also acceptable to both parties. That way, the parties share the benefits instead of there being a clear-cut loser and clear-cut winner as is usually the situation should a case go to trial.

In this case, an individual was seeking to enforce a settlement agreement with an insurance company regarding a life insurance policy. The life insurance policy involved three beneficiaries; however, it was unclear as to when the money should go to each beneficiary. There may have been a contingent beneficiary. That is, the policy was set up so that if one of the beneficiaries had passed away prior to the money dispersion, then it would go to a different beneficiary. However, the insurance company was unsure of this stipulation, so they did not give out any money at all.

As a result of all of this confusion, one of the beneficiaries entered into negotiations with the insurance company in order to get at least some money out of the life insurance policy. Louisiana Civil Code, Article 3071, defines compromise as “a contract whereby the parties, through concession made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.” Therefore, the parties in this case sought to compromise regarding the payment of the insurance policy.

In addition to defining compromise, the Court also points out that the settlement agreement must be in writing and signed by both parties as required by Louisiana Civil Code Article 3072. In this case, there was an oral agreement, but when the parties attempted to put the terms in writing, there was still dispute regarding the agreeability of quite a few of the terms of the settlement. They created drafts and sent them back and forth, but nothing was ever finalized by way of a signature from either party. The Court recognizes that there are no other cases where a settlement was validated even though neither party signed the final settlement agreement.

The Court also goes on to explain that contracts, which are the basis of a compromise, require that there be a “meeting of the minds.” That is, both parties should completely understand and agree to the terms in the contract. The contract embodies the intention of both parties and if the intention of both sides is not fully included in the settlement, then that settlement cannot be valid. In this case, both sides described other terms that were either not included in the agreement or that appeared, but they did not approve of their inclusion in the settlement. The Court notes that there was no “acceptance and acquiescent from both parties” in this case.

Although the settlement agreement can be included in more than one document, it is apparent that there was no such agreement. It based this conclusion on the testimony of both parties, lack of signature on the settlement agreement, and other communications between the parties at the negotiation stages in this case (such as letters between the attorneys that expressed displeasure with terms in the agreement). Therefore, the Court concluded that a settlement agreement did not actually exist and that it could not enforce a settlement agreement that does not actually exist.

Obtaining settlement agreements can be somewhat complicated because they involve getting both sides to agree to many different terms. However, they are very valuable because they allow the parties to avoid trial and get their conflicts resolved quickly. The Berniard Law Firm is always interested in solving our clients’ problems quickly and effectively.

Contract Dispute Resolution in Louisiana

Published on: August 17, 2012 | By Berniard Law Firm

The state of Louisiana, like many other states, has very specific requirements that the judicial branch uses to help interpret contracts when the parties are in dispute. Generally, the court likes to stay out of contracts because the right to contract without interference from the government is something that the American society greatly cherishes. The ability to contract is a basic fundamental right that is guaranteed by the Fourteenth Amendment. The court will usually only interfere if there is a dispute or if the contract was in some way illegal. Therefore, it is very important to have a contract that is well written and that all parties understand completely.

If the court has to step in to work with a contract, then it will follow a few select guidelines. The ultimate goal of the court is to determine the common intent of the parties and enforce the contract in that way. In order to determine the intent, the court will look to the contract itself. In contracts that include terms of art or very technical requirements, the court will look to the common use of the word within that trade. For example, some trades include quantity information that is always larger than actually stated; think of a “baker’s dozen.” Even though twelve is technically considered a dozen, a contract between bakers may actually mean thirteen. This notion disregards the fact that in any other contract that is not between bakers, a dozen would equal twelve.

The court will also consider the contract in its entirety, not just a few sections or a single disputed term. It will determine what outcome is practical for both parties and technical terms will be given their technical meaning. In addition, if a word has more than one meaning, then the court will defer to the meaning that will carry out the goal of the contract. Consider a simple example. If a grocery store contracts to receive bananas and they receive plastic bananas instead of real bananas, the court will likely conclude that the other party providing the plastic bananas was at fault because the definition of a banana is commonly a consumable food, especially if it is going to be sold at a grocery store. The contract did not say that the grocery store wanted edible bananas, but the court will assume this information because the outcome becomes ridiculous without this assumption.

The court will generally try to stay within the language of the contract when attempting to resolve disputes. When the contract is clear and doesn’t lead to ridiculous consequences, then external evidence provided by the parties to show an alternative intent cannot be considered. The contract’s wording is therefore very important. However, if the contract is not clear or is ridiculous, then the court can consider some outside evidence in order to determine the common intent of the parties. In our banana example, if the grocery store has always ordered real bananas from this seller and has never requested plastic bananas from this seller, then that information could be considered in the court’s analysis.

The court has a means to determine whether the meaning of the contract is clear or not. Obviously if a term or issue is missing from the contract entirely, then the court will most likely deem the issue to be unclear or ambiguous. In addition, the court will also reason that an issue is ambiguous when “the language used in the contract is uncertain or is fairly susceptible to more than one interpretation.” If this is the case, then the outside evidence can be used to determine what the intent of both parties actually is.

A well written contract will convey the intention of both parties and will define all of its questionable terms so that there is no contention in the future. Sometimes, one party does not think a term in unclear when it actually is, so a conflict will arise. Competent attorneys are needed to create a well written contract and deal with conflict.

Summary Judgment Summarily Dismissed by Third Circuit in Vehicle Accident Case

Published on: April 23, 2012 | By Berniard Law Firm

A summary judgment is rendered when a trial court decides that there are no genuine issues of material fact that need to be determined. “Manifestly erroneous” is the high standard under which summary judgments are reversed on appeal. Summary judgments are cheaper and less time consuming than full blown trials; they are a means toward the end of judicial expediency, a goal that becomes increasingly important to our judicial system over time. Despite the importance of this procedural device, many cases do not call for summary judgment. Sometimes trial courts grant full or partial summary judgments in error and are reversed. That is what occurred in the case of Jagneux v. Frohn, which you can read here.

The defendants in this case convinced the trial court that no issues of fact existed that required litigating. Their legal journey was not over though due to the plaintiff’s appeal. The court of appeals applied the standard promulgated by the Louisiana Supreme Court. This Louisiana Supreme Court’s standard initially places the burden of proof on the party that is moving for a summary judgment. The moving party must prove that one or more elements of the adverse party’s claim or defense lacks any factual support on the record so far. The opposing party is then granted an opportunity to prove that there have been facts alleged that support that party’s position. At the time of summary judgment the record is sparse so a granting of summary judgment represents a finding by the court that no facts supporting a particular party’s, in this case the plaintiff’s, position.

The appellate court reversed the trial court’s decision in this case because it found that the issue of whether Mrs. Kling, a defendant in this case, was the driver of the white SUV at the time that it, at least partially, caused the accident at issue in this case. Because there was conflicting evidence about where Mrs. Kling was and whether or not she was actually in control of the car at the time of the accident, summary judgment was not the right choice in this case. The trial court is not to weigh the merits of the case when addressing summary judgment. Summary judgment is only appropriate in cases where no potentially meritorious case is presented by one of the parties.

Happy Holidays from the Berniard Law Firm

Published on: April 8, 2012 | By Berniard Law Firm

On behalf of the Berniard Law Firm, we hope that all of our friends and followers have had a relaxing and restful holiday. Posting will resume on Tuesday

A Happy Holidays to All Friends of the Berniard Law Firm

Published on: December 25, 2011 | By Berniard Law Firm

The Berniard Law Firm would like to wish everyone a Happy Holiday.

Regular posting will resume in 2012! Have a happy, and SAFE, holiday season!

Supreme Court of Louisiana Rules on Hurricane Katrina Insurance Policies’ Anti-Assignment Clauses

Published on: August 26, 2011 | By Berniard Law Firm

In insurance, an assignment is the transfer of legal rights under an insurance policy to another party. The legality of assignments became a major issue in the aftermath of hurricanes Katrina and Rita. During this period, the federal government, in an effort to aid rebuilding efforts, issued money through the Road Home program to homeowners who held underinsured properties. In exchange, these homeowners were required to assign their rights to insurance claims under their policies to the the state of Louisiana. The purpose of this assignment was to prevent homeowners from fraudulently receiving duplicate payments. However, the program incentivized insurance companies to estimate damages too low, which in turn forced homeowners to take the higher amount offered through the Road Home program.

The shortfall created within the Road Home program forced the state of Louisiana to bring suit against insurance companies through the policy rights assigned to the state by homeowners. In essence, the state sought to recoup actual insurance claim damages that the homeowners were rightfully owed had they not opted into the Road Home program. Though most, if not all, of the homeowner insurance policy contracts contained an anti-assignment clause, the state maintained that it had the right to post-loss assignment. Therefore, it is critical to distinguish between a pre-loss assignment and a post-loss assignment.

A pre-loss assignment occurs when one transfers a legal right under an insurance policy to another before the injury or loss occurs. An example of a type of pre-loss assignment is found in cases when life insurance is assigned to a bank as collateral for a loan. Here, the assignment has occurred before the loss, in this case the death of the original policy holder, and any benefits that accrue at the time of death are used to repay the bank first. These types of assignments typically require consent from the insurer, but are usually barred by anti-assignment clauses.

A post-loss assignment, on the other hand, is the transfer of a legal right under an insurance policy to another party after the injury or loss occurs. Post-loss assignments frequently give the third party transferee the ability to file a claim against the insurance company for any loss accrued by the original policy holder. Many insurance companies try to block such assignments through broad anti-assignment clauses found in policy contracts. Such clauses were found in most Katrina and Rita policies, and insurance companies pointed to these sections in an attempt to avoid paying actual damage costs homeowners thought they rightfully assigned to the state.

While national jurisprudence holds that pre-loss anti-assignment clauses are valid in favor of contract law and public policy, anti-assignment clauses related to post-loss assignments are held to be invalid. The reasoning behind this difference primarily lies with public policy considerations. A pre-loss assignment, for example, may increase the risk beyond the point that the insurance company had originally contracted for and with a party the insurance company had not originally contracted with. A post-loss assignment, on the other hand, simply assigns an accrued right to payment after a loss has already occurred. There is no change in risk as the loss has already occurred, and since payment is to be made it matters none to whom the payment is made.
The Supreme Court of Louisiana holds that such public policy concerns are better suited for the legislature. However, the Court does state that clauses prohibiting post-loss assignment must be written in clear and unambiguous language. If the language in the policy contract is unclear, then, in accordance with laws regarding contracts of adhesion, the language will be construed against the insurance company and in favor of the insured. If you have entered into a contract with an insurance company and are looking to assign your rights under the policy to a third party, turn to the language in the contract itself. Though there is not specific set of words or test used to determine “clear and unambiguous,” your own judgment is a good starting point in determining whether or not you have the right to assignment.

Though your own judgment is an excellent place to start, insurance law is very complicated and is best suited for a practicing attorney.