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Hurricane Katrina LandmarkMarch 14, 2008The Louisiana Supreme Court heard oral argument in Sher v. Lafayette Ins. Co. on February 26, 2008. Deciding if it will deviate from federal court decisional law enforcing flood exclusions, the Supreme Court will address if flood exclusion clauses are ambiguous or will be enforced as written; the Supreme Court inevitably will decide if there is a legal distinction between natural and man-made flood waters. Because the Supreme Court scheduled the Sher case for expedited briefing, it likely will afford priority to the issuance of its decision. Summary of Sher v. Lafayette Insurance Company Plaintiff, Joseph Sher, a 92 year old Holocaust victim, filed suit against Lafayette Insurance Company to recover monetary damages and statutory penalties allegedly due under his homeowner's insurance policy for damages sustained to his commercial property in New Orleans, Louisiana during Hurricane Katrina. His lawsuit sought monetary compensation for structure damages, business personal property, and lost rent. Plaintiff filed a motion for partial summary judgment that the Lafayette policy covered all of his damages. The district court granted his motion for partial summary judgment holding that the flood exclusion contained in the Policy was ambiguous; therefore, it covered "man-made events." The jury awarded damages for the structure, lost rent, property and 25% statutory penalties plus attorneys' fees. The Louisiana Court of Appeals upheld the trial court's quantum determinations with respect to building damages, lost rent, and property damage. The Circuit Court, however, reduced Plaintiff's award for penalties under La. R.S. 22:658 by one half to $92,269.25, and vacated Plaintiff's award for attorneys' fees. In a divided decision, the Louisiana Fourth Circuit concluded the Flood Exclusion to be ambiguous and afforded the insured the more liberal interpretation of the policy. To read the entire Court of Appeal opinions, please see the following links: For more information, please contact Harry Rosenberg. |
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