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Clock restarts for Hurricane Katrina victims disputing their insurance claims

by Rebecca Mowbray,

The Times-Picayune

Thursday June 18, 2009, 5:16 PM

The class action allegations against insurers in the consolidated levee breach litigation have been dismissed, restarting the clock for anyone who is dissatisfied with the results of their Katrina claim and allowing them to file a lawsuit against their insurer nearly four years after the storm.

Home and business owners and renters had two years to file lawsuits against insurers over claim disputes after the Aug. 29, 2005, storm. Class action lawsuit filings stop the legal clock by covering the rights of all potential members of a class, but if that petition fails to get certified as a class or individual defendants get cut from the proceedings, plaintiffs' individual legal rights to pursue similar claims are restored.

On Tuesday, U.S. District Court Judge Stanwood R. Duval Jr. granted a request by insurers to be severed from the Katrina Canal Breaches Consolidated Litigation, saying that disputes against insurers were individual, and not suitable to be handled as part of a class action.

Bob Hartwig, president of the Insurance Information Institute trade group, says the ruling unfairly places insurers in double jeopardy.

"Insurers are going to be gratified to be severed from the levee breach litigation, but it's especially ironic that, by virtue of being found to have no culpability there, they are opened up to some very old litigation," Hartwig said.

The levee breach litigation names virtually every insurer operating in the state in broad claims of bad faith, breach of contract and breach of fiduciary duty, giving home owners, business owners and renters a broad platform upon which to file new lawsuits.

Soren Gisleson, head of the insurance section at the Louisiana Association for Justice, said that the amount of time that would-be plaintiffs now have to file suits is contingent upon the amount of time that remained between when the insurance portion of the levee breach litigation was filed and the Aug. 30, 2007, deadline for filing suits.


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