Yesterday, I was up very early in the dark and flew from Tampa into a cool New Jersey morning in Newark – then drove down the Garden State Parkway along trees burning with red, yellow, and gorgeous shades of purple mixed with green. It is two years from the anniversary of Sandy’s fury, and we are in the muck of New York and New Jersey claims and lawsuits which inevitably follow these major disasters. My mind reflected on about past storms, people, and judges that played a role resolving similar disasters over the past decade.


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Continuing with my nuts and bolts series on the statute of limitations, I’ve selected the boot of the Gulf Coast states, Louisiana. Louisiana has been hit hard in past years by the likes of Hurricanes Katrina, Rita, Ike, and other named wonders of weather. Due to the numerous claims made in recent years, Louisiana enacted special legislation to extend the limitations periods at times. The Louisiana legislature extended the time for instituting a judicial action against an insurer seeking recovery for property damages arising out of Hurricane Katrina to 1 September 2007, at the very latest, or forever be barred from doing so. The only exception the Legislature provided to the filing deadlines set forth in Acts 802 and 739 was if the contract or the parties (Acts 802) or the law (Act 739) provided for a later date for the filing of an action. With various Acts created to help claimants deal with losses, it’s important to make mental note of the Louisiana limitations.

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(*Chip Merlin’s Note–Rocco Calaci has been a noted meteorology expert witness in the Katrina Legal Wars. Click here to read his previous guest blogs)


Tropical Storm / Hurricane / Tropical Storm Isaac is gone, but it generated numerous tornadoes along the East Coast; from Florida to the Carolinas, in Alabama, Mississippi and Louisiana. In my area of Northwest Florida, there were many public reports of tornadoes on Tuesday, Wednesday and Thursday. Unfortunately, the large majority of these tornadoes were never reported to the proper authorities. This creates a huge problem for everyone.


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Banks and mortgage companies regularly buy what is known in the insurance world as “force-placed” insurance coverage. This type of coverage protects a mortgagee’s interest in the property should no other insurance coverage apply. In other words, force-placed insurance ensures that a property is covered, regardless of the circumstances. Most force-placed policies are made between the bank/mortgage company and the insurer. So what rights, if any, does a borrower have under such a policy?


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In Bender Square Partners v. Factory Mutual Insurance Company, Bender Square Partners sought to recover for losses it suffered as a result of Hurricane Ike to one of its properties it leased to PNS Stores, Inc. According to the Plaintiff, the amounts it sought to recover were covered under a Commercial Property Insurance Policy that Factory Mutual Insurance Company (“FM Global”) issued to Big Lots, Inc. and its subsidiaries, one of which is PNS Stores (the “Policy”). Plaintiff alleged that FM Global improperly refused to pay and indemnify Plaintiff for all losses covered under the policy. As a result, Bender sought damages and other relief for FM Global’s alleged breach of the policy.

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In H&H Hospitality L.L.C. v. Discover Specialty Ins. Co., No. 10-1886 (S.D. Tex. Dec. 20, 2011), the U.S. District Court for the Southern District of Texas granted summary judgment in favor of a commercial property insurer in an action brought by an insured motel owner for wrongful denial of a business interruption claim arising from property damage caused by Hurricane Ike. The Court held that the policy did not provide coverage for the reduced business operations experienced by the policyholder.


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It was about a year ago when I reported that Texas led the nation for highest insurance premiums in 2010. Well, the results are in for 2011 and Texas has once again topped the nation as the state with the highest insurance premiums in the land. Roger Mares of KTXS News reports that Texas homeowners pay an average of $1,511 annually for their home insurance. That’s $50 more than Florida, the state that came in second place.


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Last November, in A House on the Beach, Literally, I wrote about the Texas Supreme Court decision in Severance v. Patterson, 09-0387, 2010 WL 4371438 (Tex. 2010), reh’g granted (Mar. 11, 2011), in which the Texas Supreme Court held that public beach rights could not “roll” up over private property rights when a hurricane or other force changes the vegetation line on a Texas public beach. Normally, a decision by a state court’s highest tribunal ends the dispute, however, this case was procedurally different from a traditional state court action. In Severance, the plaintiff sued Texas state officials in federal court. When the federal court had questions regarding the correct interpretation of Texas law, it certified those questions to the Texas Supreme Court. The Supreme Court then provided answers to the federal court so it could resolve the federal lawsuit. After providing its decision to the federal court, the Texas Supreme Court granted a rehearing on the merits of its decision, which could potentially change it.

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The first chapter of my Insurance Law textbook from law school was about the history of insurance. It set the stage for the next chapter on the insurable interest, one of the fundamental principles in insurance law. The term “insurable interest” is actually quite self-explanatory. In order to obtain insurance on something, one must have some interest in that thing that could be covered by insurance. Requiring an insurable interest is one way of negating moral hazard. Wikipedia currently defines “moral hazard” as occurring when, “a party insulated from risk behaves differently than it would behave if it were fully exposed to the risk.” To use a cliché, moral hazard could be phrased as having everything to gain and nothing to lose.

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