Property Insurance Coverage Law Blog : Florida Insurance Lawyer & Attorney : Merlin Law Group Law Firm : Tampa, Houston, Coral Gables, Gulfport

The Birmingham News posted an article last week reporting that:

State insurance officials and others are working on legislation that would let Alabamians with insurance claims hire their own adjusters, clarifying what has been a gray area of the law. If passed, there'd be no question Alabamians could hire so-called public adjusters to help establish the scope of their losses and probably get more money from their insurance companies.

Not surprisingly, the insurance industry likes that insureds cannot hire public adjusters. It often makes the claims process a one sided game if the insured is without representation. The horrendous treatment some homeowners and business owners received from their insurance companies after the tornado damage claims last year, may prompt the Alabama legislature to recognize the need for public insurance adjusters.

Legislation was proposed last year to license and regulate public adjusters in Alabama, but it was dropped because of objections from the Alabama State Bar. Now, the Bar is working with state insurance regulators and industry groups on a compromise measure for the legislative session starting in February.

Since the April 27, 2011, tornado struck, Alabama has not received any complaints of actions by public adjusters, but in the past, there were complaints about roofers who improperly negotiated insurance claims. Contractors who act as insurance negotiators are a problem in many areas of the country. Licensing of the profession may make a difference.

Brian Goodman, of the National Association of Public Insurance Adjusters, provided the Birmingham News perspective on how passing a licensing law in Alabama will benefit the state because it will give the state the ability to regulate how these professional assist insureds and protect consumers.

Check back for updates on whether Alabama makes a change this legislative session.

The Joneses also argue that the trial court erred in entering a summary judgment for Alfa on their “abnormal” bad-faith claim. They argue that Alfa intentionally or recklessly failed to investigate the claim because neither Ralph Jones nor Bradshaw ever inspected the roof of the Joneses' house or their attic. Specifically, they argue that Ralph Jones focused exclusively on the foundation to the exclusion of all evidence available to him even though they had made a specific claim for roof damage and the hurricane had blown a tree onto the eave of their house. They also argue that neither Ralph Jones nor Bradshaw gathered any “before and after” evidence from the Joneses or from any other source. The Joneses note that their expert witness, Andrew Beverly, stated that “[a]ny investigation by Alfa that did not include the above-described activities would not satisfy proper claims handling practice.”

Neither Bradshaw nor Ralph Jones inspected the roof or the attic during their investigation, even though the Insureds filed a claim with Alfa for roof damage, the roof had clearly visible damage from the hurricane, and the Insureds contended that the damage to their house was caused by the hurricane. Alfa waited until after the Insureds' house had been extensively damaged by fire and after Alfa had canceled their policy to send Ralph Jones, along with three other engineers, to reinspect the house, including the charred attic and roof. Alfa's own attorney admitted during oral argument that Alfa sent the engineers to the house after the fire only because Alfa was afraid that litigation may arise due to Alfa's denial of the claim following Hurricane Opal, its cancellation of the Insureds’ policy, and the fire damage to the house.

The Supreme Court of Alabama also explained that several facts created a jury question: after Hurricane Opal, Alfa never investigated any records it had of the condition of the Insureds’ house before the hurricane; the record reflects that Alfa never contacted a realtor who visited the house three days before Hurricane Opal made landfall, even though, according to Harold Jones, Bradshaw had inquired about purchasing the residence; Alfa never inquired of the Insureds as to who would have seen their house before Hurricane Opal and never attempted to interview anyone who may have visited the home before Hurricane Opal. Furthermore, Alfa never considered its own “rewrite” inspection of the property, including photographs of the exterior of the house and never inquired of Sanders, its own employee, as to the condition of the house when he conducted the “rewrite” inspection, even though Sanders testified that he did not recall seeing any cracks in the interior or exterior walls of the Joneses' house when he conducted the “rewrite” inspection three months before Hurricane Opal.

An insurance company has a ‘responsibility to marshal all ... facts' necessary to make a determination as to coverage ‘ before its refusal to pay.’ ... This duty must include a duty to investigate a covered event that an insured claims has caused his loss [citation omitted]. Considering the evidence contained in the record that is before this Court, there is certainly a question of fact as to whether Alfa met its duty to marshal all facts necessary to make a determination as to coverage before it denied the Joneses' claim. Thus, the trial court erred in granting Alfa's motion for a summary judgment as to the Joneses' claims of “abnormal” bad-faith failure to properly investigate the Joneses' insurance claim and failure to investigate the condition of the house before Hurricane Opal. We therefore reverse the summary judgment entered by the trial court in favor of Alfa on the “abnormal” bad-faith claim.

Please consider that the opinion discussed above is specific to Alabama and that other jurisdictions might rule differently on this issues. Please tune in for another bad faith discussion next week.

In Jones, the insureds contended that there was no reasonable or justifiable ground for Alfa's refusal to pay the disputed claim when the following facts were considered:

1. The insureds’ testified that no cracks existed in the brick veneer or the drywall of their house before Hurricane Opal;
2. Their testimony was supported by the adjuster's testimony that he did not see or recall seeing any damage or cracks to the exterior of the insured property when he inspected the house during the summer of 1995;
3. Ralph Jones told the insureds that he believed that wind had become trapped under the carport during Hurricane Opal, lifting and shifting the roof of the house and that the soil in Coffee County was not prone to cause settlement;
4. Upon learning of the nonrenewal of the Joneses' policy by Alfa, Sanders told Harold Jones that Alfa did not “stand a snowball['s] chance in hell” of being successful if the claim was litigated because the cracks and other damage were not present when he inspected the house during the summer of 1995.

The insureds compared their situation to the facts of the Alabama Supreme Court’s decision in White v. State Farm Fire & Casualty Co., 953 So.2d 340 (Ala. 2006):

Based on the present state of the record in this case, we conclude that material questions of fact exist that make a summary judgment on the bad-faith claim improper. White and his office manager ... testified that two different State Farm agents told them to repair the roof. White insists that [the adjustor] not only authorized him to proceed with the repairs, but she also told him it would be a day before State Farm had the check processed for the claim. White says no one at State Farm ever told him that there was a question whether State Farm would pay the claim. John Hill, a State Farm manager, testified that if State Farm authorized repairs, then it should have paid the entire $43,395 proposed by Quality Roofing. Other State Farm employees testified, however, that if [the adjustor] had indeed authorized White to proceed with the repairs proposed by Quality Roofing, it would not have been necessary for her to have prepared an estimate, which she did.

Alfa attempted to distinguish White, arguing the cause of damage was not disputed in White. Instead, the issue in White was that the insurer refused to pay the full cost to replace the roof, arguing that the new roof was an upgrade.

After evaluating both arguments, the Supreme Court of Alabama agreed with Alfa that the insureds’ claim was distinguishable from White:

The ultimate question is whether the nonmovant has presented sufficient evidence to allow the case or the issue to be submitted to the jury for a factual resolution [citation omitted] In other words, the nonmovant must present substantial evidence in order to withstand a judgment as a matter of law…it is apparent that Ralph Jones's report creates a question of material fact that would preclude the Joneses from receiving a preverdict judgment as a matter of law on the underlying breach-of-contract claim. Accordingly, we affirm the summary judgment on the Joneses' “normal” bad-faith claim.

The Court held that the insureds did not present substantial evidence that could withstand a judgment as a matter of law and affirmed summary judgment of the insureds’ “normal” bad faith claim.

Next week I will write about the insureds’ “abnormal” bad faith claim. Please consider that the holding above is specific to Alabama and that other jurisdictions might rule differently on this issue.

The Insureds’ Complaint against Alfa contained a “normal” bad-faith claim and an “abnormal” bad-faith claim. The Alabama Supreme Court relied upon its definition of both “normal” and “abnormal” bad faith in the following manner:

In the “normal” bad-faith case, the plaintiff must show the absence of any reasonably legitimate or arguable reason for denial of a claim [citation omitted]. In the “abnormal” case, bad faith can consist of: 1) intentional or reckless failure to investigate a claim, 2) intentional or reckless failure to properly subject a claim to a cognitive evaluation or review, 3) the manufacture of a debatable reason to deny a claim, or 4) reliance on an ambiguous portion of a policy as a lawful basis for denying a claim.

Bad faith ... is not simply bad judgment or negligence. It imports a dishonest purpose and means a breach of a known duty, i.e., good faith and fair dealing, through some motive of self-interest or ill will.

In order to recover on a “normal” bad-faith claim, the plaintiff must prove:

(1) the existence of an insurance contract; (2) an intentional refusal to pay the claim; and (3) the absence of any lawful basis for refusal and the insurer's knowledge of that fact or the insurer's intentional failure to determine whether there is any lawful basis for its refusal. [citation omitted] For a ‘normal’ bad-faith claim to be submitted to the jury, the underlying contract claim must be so strong that the plaintiff would be entitled to a preverdict judgment as a matter of law.

The Alabama Supreme Court distinguished “abnormal” cases as those that dispensed with the predicate of a pre-verdict judgment as a matter of law for the plaintiff on a contract claim if the insurer recklessly or intentionally failed to properly investigate a claim or subject the results of its investigation to a cognitive evaluation.

The Court went on to analyze if and how “normal” and “abnormal” bad faith claims played a role in Jones v. Alfa Mutual Insurance Company. I will write about those issues next week.

Please tune in next week for a continued evaluation of this case.

The lower court entered summary judgment in favor of Alfa, finding that the Insureds did not file their complaint within the statute of limitations and the Insureds appealed. The Insureds argued that Alfa did not close its file on the claim until January 20, 1997, less than two years before this action was filed. Furthermore, Alfa's actions following the issuance of Ralph Jones's report were not in accordance with the denial of the claim. Alfa, on the other hand, claimed that both Ralph Jones's report and Bradshaw's December 29, 1995, letter to the Insureds (collectively “the Letters”) sufficiently placed the Insureds on notice that their claim for damage to their drywall and brick veneer was being denied.

When analyzing this issue, the Supreme Court of Alabama reviewed the statute of limitations for bad faith claims:

Bad faith is an intentional tort [citation omitted] and a species of fraud [citation omitted]. The cause of action for bad faith refusal to honor insurance benefits accrues upon the event of the bad faith refusal, or upon the knowledge of facts which would reasonably lead the insured to a discovery of the bad faith refusal. The accrual of the tort of bad faith is a question of fact to be determined by the circumstances of each case [citation omitted]. The statute of limitations for bad faith claims arising on or after January 9, 1985, is for two years [citations omitted]. When a claim accrues, for statute-of-limitations purposes, is a question of law if the facts are undisputed and the evidence warrants but one conclusion [citation omitted]. However, when a disputed issue of fact is raised, the determination of the date of accrual of a cause of action for statute-of-limitations purposes is a question of fact to be submitted to and decided by a jury.

Alfa argued that the Letters constituted a denial of the claim specifically regarding the damage to the drywall and exterior brick veneer of their house. The Insureds argued that the Letters did not explicitly state that the claim was being denied and did not reference all the items that were damaged by the hurricane. Because the facts were disputed, the Insureds argued that summary judgment was not warranted on the statute-of-limitations issue. In further support of their argument, the Insureds refered to Godwin's deposition testimony indicating that Alfa's policy was to deny a claim orally whenever possible or, in the alternative, to deny the claim in writing. The Insureds testified that they had several face-to-face conversations with both Sanders and Bradshaw after Ralph Jones completed his report, but Alfa never orally denied the claim. Harold Jones testified that while he was adjusting the peanut-boil-over claim, Bradshaw informed him that Alfa had not ruled on the hurricane claim, that Alfa had not informed him how to handle the claim, and that, as of that date, there had been no settlement of the claim.

Furthermore, after Ralph Jones’ report was issued, Alfa invited the Insureds to submit additional information to support their claim and continued to investigate the claim for almost two years following that report, reinspecting the home in November and December 1997. The Insureds also pointed out that Alfa made payments on the claim on January 20, 1997, demonstrating that the claim was still open. Additionally, the Insureds addressed the fact that Sanders did not know that the claim had purportedly been denied and that he assured them on numerous occasions that their hurricane claim would ultimately be paid.

There was also evidence that Alfa took actions subsequent to writing the Letter that could have led the Insureds to doubt their claim had been denied. Among other things, Alfa continued to investigate the cracks in the walls of the house, Bradshaw's stated in October 1996 that Alfa had not instructed him how to handle the claim and that it had not ruled on their claim, and the fact that Sanders, the Insureds’ insurance agent, was unaware that the claim had been denied until March 1997.

Taking all of this into consideration, the Court could not conclude as a matter of law that Alfa put the Insureds “on such notice that the fraud reasonably should [have been] discovered.

A review of the evidence in a light most favorable to the nonmovant, the Joneses [the Insureds], indicates that genuine issues of material fact exist as to when Alfa actually denied the Joneses' claim and as to when the Joneses would have or should have known of facts that would reasonably lead them to discover the denial. Thus, the partial summary judgment on the Joneses' bad-faith claims is not barred by the statute of limitations.

Please consider that this analysis and decision is specific to the Supreme Court of Alabama. Other jurisdictions may have different rulings on the same or similar issues. Please tune in next week for the next legal issue analyzed in this case.

The property damage insurance claim arose from damage to Harold and Pam Jones’ cattle farm in Coffee County on October 4, 1995, caused by Hurricane Opal. They filed a claim on October 6, 1995, with Alfa, their carrier. At first, two Alfa adjusters arrived at the residence to inspect the damages. Alfa agent Wendell Sanders then inspected the property and, according to the insureds, told them that they could proceed with a roof replacement. After Alfa adjuster Gary Bradshaw inspected the property, he consulted with his supervisor Hilton Godwin, an Alfa district claims manager, regarding Bradshaw’s uncertainty regarding some of the damages. It was determined that an engineer's opinion was warranted, so structural engineer, Ralph E. Jones, was hired to inspect the property:

After inspecting the property, Ralph Jones told Harold Jones that if the Joneses' house was located in Montgomery County he would say the damage was most likely caused by soil settlement but that the soil in Coffee County did not tend to cause settlement problems in structures. Harold alleges that Ralph Jones continued by saying that it was his belief that wind had become trapped in the carport of the house during Hurricane Opal and that the trapped wind had lifted the roof and had shifted the top of the house. Harold Jones recalls that Pam Jones and possibly Bradshaw were present when Ralph Jones made this statement. Ralph Jones, however, testified by deposition that he did not recall making such a statement.

Ralph Jones’ December 4, 1995 report reflects the following:

It is my opinion that the brick cracks, caulk separations, [S]heetrock cracks, and related damage along the north and east sides of the carport are due to settlement of the foundation in the vicinity of the northeast corner of the carport, and that this settlement and damage was not caused by wind forces or otherwise related to Hurricane Opal.

Bradshaw claims that he told Harold Jones by telephone that Ralph Jones's report reflected that the cracks in the drywall and exterior brick veneer were not covered by the insurance policy and that Alfa would pay benefits only for the damage to the roof. Harold Jones, however, denied that Bradshaw ever told him that the claim would not be paid.

On December 29, 1995, Bradshaw wrote a letter to the insureds’ attorney, Bruce McLean:

Enclosed is an estimate for the replacement of the insured's shingle roof and a draft representing payment less the deductible for that roof…I also understand that you are in possession of a copy of the engineer's report which indicates that shifting and settlement of the insured house was not related to the hurricane winds. Should you have any questions concerning that report or any aspect of the insured's claim or policy please feel free to give me a call. Also if there is any other damage that the insured has found as a result of the hurricane that we have not already addressed please have him to submit itemized estimates for those to be considered. I thank you for your help and cooperation and look forward to hearing from you.

The insureds contended that Alfa knew there were no cracks in their exterior brick veneer and interior drywall before Hurricane Opal.

On August 8, 1996, Bradshaw sent a memorandum to Richardson asking that the Joneses' farm owner's policy be canceled “based upon [the] engineer's report after the hurricane that this house is suffering from settlement and structural damage, none of which was related to the storm but all attributed to the foundation.” Richardson responded to Bradshaw on August 13, 1996, stating the Joneses' policy was to renew on September 9, 1996, that she did not receive Bradshaw's memorandum until August 12, 1996, that insufficient time existed to give 30 days' notice of nonrenewal before the renewal date, and thus that the policy would be renewed, but it would be renewed for only 6 months.

On or around January 14, 1997, Richardson sent a memorandum to Sanders, instructing him to raise the insureds' deductible at the next renewal. In response to the memorandum, Sanders called Richardson and inquired if Alfa could legally raise the deductible while a claim was pending. Richardson told Sanders that she would inquire about the issue. On January 19, 1997, Alfa's underwriting department signed off on the August 13, 1996, recommendation not to renew the insureds' farm owner's policy. On January 20, 1997, Alfa closed the insureds' Hurricane Opal claim file and issued a $350 check for damage the barn sustained during the hurricane.

According to Sanders, he was unaware until March 1997 that the Joneses' claim had been denied. Sanders stated that he had been told that Alfa “was working on” the claim. Pam Jones stated that on numerous occasions Sanders told the Joneses that he would take care of their claim and that there was no need to worry. According to both of the Joneses, Sanders told them that he would go to Montgomery and try to get their claim resolved. Sanders, however, stated that he never made any such offer. The Joneses contend that Sanders encouraged them not to pursue legal action on the claim, and Sanders admits that he would have asked them not to get a lawyer until an Alfa adjuster could talk to them.

On February 4, 1997, Alfa sent a letter to the Joneses notifying them that their farm owner's policy was not being renewed as the result of “substantial change in the risk due to claims experience.” Harold Jones alleges that he had a conversation with Sanders about the nonrenewal in which Sanders stated that he would go to Alfa's headquarters in Montgomery on his day off to help the Joneses become reinsured and that Sanders said “Alfa doesn't stand a snowball ['s] chance in hell because your house was not in this condition two months prior to me renewing your insurance.” According to Sanders, he did not promise the Joneses he would go to Montgomery on their behalf, but he did contact the Montgomery headquarters about the nonrenewal by discussing the matter with Jim Short, who was in charge of Alfa's underwriting department. Sanders also contends that he made no statement to the Joneses about the likelihood of success or failure of a legal claim by the Joneses against Alfa.

Ultimately, the insureds’ policy with Alfa was not renewed.

In January and March 1997, the insureds received questionnaires from Alfa regarding their satisfaction with Alfa's handling of their claim. They also received a telephone call from an Alfa representative seeking comments about the handling of their claim. A few days after the telephone call from the Alfa representative, Godwin telephoned the insureds and asked about their complaints with the claims process. According to the insureds, Godwin did not tell them that the claims which had not yet been settled were denied.

The insureds ultimately decided to file a 12-count complaint against Alfa, Bradshaw, and Ralph Jones on December 3, 1998. The defendants moved for a dismissal, contending that the statute of limitations expired before the insureds filed their action.

Next week, I will address the issue of whether the insureds filed their Complaint within the Statute of Limitations.

The path of Tuscaloosa's F5 tornado was also clearly seen from the air and awe inspiring. The magnitude of catastrophic damage viewed from the ground is hard to describe. These photographs may give you some appreciation for the horror beset of those in its path:

Mary Fortson and I accompanied the Windstorm Insurance Network's Executive Director, Michelle Griffin, to Tuscaloosa yesterday. The Windstorm Network gave much needed donations to the Salvation Army and the Red Cross. Both are stationed in temporary quarters because their permanent locations were damaged by the tornados.

At the Red Cross operation headquarters, I was shown a Tuscaloosa County map showing the path and breath of each tornado that ripped through Tuscaloosa. The F5 was more than a mile wide as it left Tuscaloosa headed for Birmingham. Red Cross officials told us they were lucky to have closed their previous Red Cross office shortly before the F5 hit.

Tuscaloosa tornado damage eerily reminds me of the worst damage from Hurricanes Charlie, Ivan, Katrina and Ike. Hurricanes typically give people some opportunity to evacuate. Tornadoes do not. I cannot imagine the terror felt by those who faced the F5.

Tuscaloosa joins the list of blue tarp towns; tarps now cover hundreds of roofs throughout the city to mitigate further damage. They will remain for months until repaired.

For those wishing to help, here are links to the American Red Cross and Salvation Army.

The reason why it is important to go to seminars is get an edge and tips about your practice. I will go over cases and what the judges say. Still, the value of attending is to hear the practical analysis and how these cases can be used by adjusters, public adjusters, attorneys and others in the practice of their respective trades.

Here are the cases and the outline. I will be giving a similar speech in Houston at the Windstorm Conference, January 24-27. 2011. I promise that if you attend, you will come away with some practical tips you can use to help your clients--whether insurers or policyholders.
 

The Gulf of Mexico oil spill could be leaking at a rate of 25,000 barrels a day, five times the government's current estimate, industry experts say.

Basing their calculations on government data and standard industry measurement tools, the experts said the Gulf spill may already rival the historic 1969 Santa Barbara, Calif., and 1989 Exxon Valdez disasters.

Ian MacDonald, professor of oceanography at Florida State University who specializes in tracking ocean oil seeps from satellite imagery, said there may already be more than 9 million gallons of oil floating in the Gulf now, based on his estimate of a 25,000 barrel-a-day leak rate. That's compared to 12 million gallons spilled in the Valdez accident.

Interior Department officials said it may take 90 days to cap the leaking well. If the 25,000 barrels a day is accurate and it leaks for 90 days, that's 2.25 million barrels or 94.5 million gallons.

Mr. MacDonald and his colleagues at the Earth, Ocean and Atmospheric Science Department have worked jointly with National Oceanic and Atmospheric Administration in the past on oil spill tracking, and have shared their estimates with NOAA scientists. He said the NOAA scientists didn't dispute the calculations.

A NOAA spokeswoman said the government estimate of 5,000 barrels a day leaking from the BP PLC deep sea well was based on collaborative assessments produced by BP, NOAA and the U.S. Coast Guard. NOAA scientists weren't immediately available to comment.

The 5,000-barrel figure was first announced late Wednesday and marked a five-fold increase from the previous estimate. News of the higher estimate ratcheted up the pressure on officials to take more-aggressive steps to contain the spill and heightened concerns about potential environmental damage and disruption to the Gulf Coast economy.

Climate Now called this an Oilpocalypse Now! That blog provides a detailed report on the serious issues confronting Gulf Coast states.

In Safety Device Questioned in '04, the Wall Street Journal also noted that safety devices could have been better:

Some newer rigs have blowout preventers with two separate pairs of shear rams—providing an added safeguard in case one shear malfunctions or hits an obstruction in the pipe. The Deepwater Horizon had a single pair of shear rams.

The Interior Department's Minerals Management Service, which regulates offshore drilling, questioned whether shear rams were strong enough to shear through a pipe.

In two offshore incidents in 2001, the rams didn't work as expected. The agency issued new rules in 2003 instructing the oil industry to make sure the rams would work reliably.

In 2004, a study commissioned by the MMS raised significant questions about the ability of rams to cut through the stronger pipes used in deep-water drilling. Those thicker pipes—as well as the shear rams—must withstand the enormous pressures found at 5,000 feet below sea level.

The study noted there was no agreement on how to determine if the sheer rams would work properly in deep-water conditions. Only three of 14 newly build rigs had blowout preventers that were able to squeeze off and cut the pipe at the water pressure likely to be experienced at the equipment's maximum water depth, the study noted. (emphasis added)

I will be flying over the Gulf of Mexico to Galveston on Hurricane Ike litigation matters as many are reading this post. I am certain that the spill will be even more unbelievable to see than this past Thursday when I last flew over the disaster. The Gulf Coast needs a reprieve from these heartbreaks. The recent post in Slabbed, “We interrupt this interruption of our regularly scheduled disaster blogging to report that levees have failed above Memphis” – said the Editilla this soggy Sunday morning, is sadly accurate of what we have been experiencing lately.

Yesterday, Time Magazine reported in an article, Gulf Oil Spill Swiftly Balloons, Could Move East, that:

The Coast Guard conceded Saturday that it's nearly impossible to know how much oil has gushed since the April 20 rig explosion, after saying earlier it was at least 1.6 million gallons....Even at that rate, the spill should eclipse the 1989 Exxon Valdez incident as the worst U.S. oil disaster in history within about a week. But a growing number of experts warned that the situation may already be much worse.

The oil slick over the water's surface appeared to triple in size over the past two days, which could indicate an increase in the rate that oil is spewing from the well, according to one analysis of images collected from satellites and reviewed by the University of Miami. While it's hard to judge the volume of oil by satellite because of depth, it does show an indication of change in growth, experts said.

"The spill and the spreading is getting so much faster and expanding much quicker than they estimated," said Hans Graber, executive director of the university's Center for Southeastern Tropical Advanced Remote Sensing. "Clearly, in the last couple of days, there was a big change in the size." Florida State University oceanography professor Ian R. MacDonald said his examination of Coast Guard charts and satellite images indicated that 8 million to 9 million gallons had already spilled by April 28.

Doug Suttles, BP's chief operating officer for exploration and production, said it was impossible to know just how much oil was gushing from the well, but said the company and federal officials were preparing for the worst-case scenario. Oil industry experts and officials are reluctant to describe what, exactly, a worst-case scenario would look like — but if the oil gets into the Gulf Stream and carries it to the beaches of Florida, it stands to be an environmental and economic disaster of epic proportions.

The Deepwater Horizon well is at the end of one branch of the Gulf Stream, the famed warm-water current that flows from the Gulf of Mexico to the North Atlantic. Several experts said that if the oil enters the stream, it would flow around the southern tip of Florida and up the eastern seaboard.

"It will be on the East Coast of Florida in almost no time," Graber said. "I don't think we can prevent that. It's more of a question of when rather than if."

Our firm will file our first BP Oil spill lawsuit tomorrow morning. We will do so with our long term co-counsel in the panhandle of Florida, Keefe, Anchors, Gordon & Moyle, P.A. Michelle Anchors is proudly a fervent environmentalist, and she wrote the following in her Blog:

Those of us who grew up on the Emerald Coast have been around the block a few times watching the Weather Channel and waiting to see where the hurricane would land. Most of us have never watched an oil slick to see whether and when it would land. Waiting for a hurricane seemed to be a lot more fun. Maybe we would get out of school. Maybe the electricity would go out. Maybe the wind would bring good waves for the surfers. And now that I represent clients who have to fight their insurance companies after a hurricane, maybe I would even get some business. But waiting for the oil spill of the Deepwater Horizon to reach our coast is gut wrenching. I don’t want the business.

During the last few days, I have received calls from some of my clients asking if we can help them prepare for this potential disaster. Not to be unnecessarily alarmist, but the potential consequences are grave. Emotionally, environmentally, and economically, Northwest Florida has everything to lose. So we have mustered our troops and our resources and we are going to fight BP, who could have and should have taken more actions to prevent this devastating event. This is not like a hurricane that the forces of Mother Nature unleashes without any human or corporate control. This is an oil company that apparently did not take the precautions necessary to protect us all – this is an underwater Chernobyl.

With oil coming ashore, there will be massive income and loss of use claims. Those have already started and will only increase as the oil permeates a community. As a result, Merlin Law Group hired an environmental attorney who has extensive experience with pollution litigation. We also retained a consultant who managed claims from the oil industry's side following the Exxon Valdez disaster. We also hired Trial Exhibits, which photographed and documented damage for a oil transport company following a 1993 oil spill off St. Petersburg and Clearwater. We will do our best to help and serve our clients. I look forward to working with Michelle Anchors and others as we work through this unprecedented catastrophe.

Oil spills, clean up and recovery are topics of discussion at my family gatherings. My father helped start the Marine Spill Response Corporation operations in the Gulf Coast at Lake Charles, Louisiana. After his retirement there, he has taught oil spill clean up and recovery for the State of Louisiana and throughout the Gulf Coast. I am certain that many of the people trying their hardest to stop the spread of this spill have been taught by him. There is only so much that can be done if the flow of oil is not contained.

Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak. BP is hoping a plan to cover the well with a steel cap and capture the leaking oil will avert an environmental disaster. But that will take four weeks, and by then more than 150,000 barrels could have spilled. If the steel cap does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take two to three months. If it takes that long, the spill could be even larger than the 258,000 barrels leaked in 1989 by the Exxon Valdez.

Estimates of the damage are already in the billions. In BP Vows to Pay All Gulf Coast Oil Spill Damage Claims, the National Law Journal reported:

BP Plc will compensate all those affected by an oil spill from one of its wells in the Gulf of Mexico, its Chief Executive said, accepting the disaster could hit plans to open new areas off the U.S. coast to drilling.

"We are taking full responsibility for the spill and we will clean it up and where people can present legitimate claims for damages we will honour them. We are going to be very, very aggressive in all of that," Tony Hayward told Reuters in an interview on Friday.
...

The cost to the fishing industry in Louisiana could be $2.5 billion while the impact on tourism along Florida's Paradise coast could be $3 billion, Neil McMahon, analyst at investment firm Bernstein, said in a research note on Friday.

On the way to Houston on Thursday morning, I was amazed to look out the window of our plane and see the size of the oil spill. As far as I could see, oil was there. This will not end anytime soon. There will be significant claims, losses and litigation involving this tragic event.