Kodrin v State Farm: a Writ with its wits about it
Roof to the Kodrin property (Redmann website) The roof was found 1000 feet from where the property stood. Wind blowing in that direction preceded the arrival of flood water when wind was blowing in the opposite direction. The force of water entering the property was not strong enough to have moved the roof from where it landed.
Sop caught the breaking news Kodrins take the 5th to the Supremes last week and, wanting to know more about the Writ, I picked up on the invitation of Kodrin’s Counsel and made a trip to the Redmann Law website.
Kodrin, much to my surprise, is not petitioning the Court to hear insurance issues. Instead, Kodrin raises two questions about the federal authory over state law. Obviously the underlying issues are about state insurance law but the question Kodrin presents are clearly about the extent of any related federal authority, if any authority at all:
- The court of appeals ruled that under Louisiana law as long as an insurer relies upon its own engineer’s opinion that petitioners’ loss of their home from Hurricane Katrina was not covered under their homeowners’ policy because it was flood-caused rather than wind-driven, it is not acting in bad faith and cannot be assessed extra damages and attorney’s fees under Louisiana law when it wrongfully denies coverage. Does this result overturn settled Louisiana law which penalizes an insurer who acts in bad faith in denying coverage even when it relies upon its own engineer’s opinion in doing so, creating unprincipled federal common law on the subject and subverting the policies of comity and federalism announced by this Court in Erie R. Co. v. Tompkins, 304 U.S. 65(1938)?
- Did the court of appeals nullify petitioners’ right to a jury trial by usurping the jury’s finding that respondent had acted in bad faith when it delayed deciding about whether petitioners’ homeowners’ policy would cover the loss of their home and then eventually denied coverage for the loss as flood-caused rather than wind-driven?
Skadden Arps attorney Shelia Birnbaum represented State Farm before the Court in Campbell and figured prominently in State Farm’s settlement with the Scruggs Katrina Group. Her name came to mind when I opened a State Farm engineer’s report you really could write on a napkin.
State Farm’s engineer somehow managed to spread an I-saw-nothing-therefore-I-know-nothing-with-certainty determination over two pages. As incredible a feat as that is, nothing is insufficient to prove cause of loss.
Basic math and basic law required State Farm to pay the Kodrin’s claim. However, their claim was denied.
A jury looked at the evidence and saw what the engineer reported – nothing. Instructed on the basic law that applied, the jury determined the Kodrin’s claim should be paid. The jury then applied basic math and the law and determined 0 proof = 0 reason for denial = bad faith x law = additional award to the Kodrins.
In a calculated move, State Farm took the jury’s decision to the Fifth Circuit and there the justices recalculated the case as 0 + 0 = 1 with 1= jury decision and determined this added up to 0 – 1=0 thus the law of the State of Louisiana was not applied.
The Kodrin’s asked the Fifth Circuit to reconsider; but, the Fifth declined – a decision that only makes sense if one understands the Justices had not considered the law of the State of Louisiana in their decision, consequently, they could not reconsider what they had never considered.
It is well established that individuals with disabilities develop coping strategies. However, oral arguments can only compensate for dyslexia. Dyscalculia requires a different set of compensating strategies but the Fifth Circuit needs just one – a reminder that the laws of math are beyond their authority.
The Kodrin’s Writ to the Supreme Court has it wits about it – the questions posed address only the authority the Fifth had to uphold the established Law of the State of Louisiana and Constitution.
The Constitutionally endowed right of a trial by jury and the primacy of state law are so fundamental that the greatest barrier the Kodrin’s Petition faces may prove to be anyone believing the Fifth Circuit could reach a decision contrary to either.
Regardless of what one thinks about Mississippi’s Supreme Court, the Justices clearly had read the briefs filed in Corban v USAA and understood Oral Arguments as the opportunity to ask questions for clarification, including the basis for calculation, leaving the math to the jury.
The Fifth Circuit, on the other hand, may need to hire a reader to ensure members comprehend the issues before attempting to reach a decision. Likewise, Court’s the best coping strategy to compensate for the dyscalculia that resulted in their convoluted decision in Kodrin is fidelity to the primacy of state law and the Constitution.
I’ll say it once again– unfortunately, the Kodrins’ Writ has almost no chance of being granted. I commend the Kodrin team for framing the issue as an Eerie court gone awry. As I have said on this site multiple times, federal courts here in Louisiana have abused and overstpped their authority by attempting to “make law” and repeatedly failing to follow well accepted and embedded principles of Louisiana law.
However, the U.S.Supreme Court is going to look at the Kodrin case as a case where the 5th Circuit found manifest error in the jury’s conclusion of bad faith, nothing more, nothing less. I would be shocked if the Supremes looked at this case from a constitutional perspective.
While we can debate the merits of the 5th Circuit’s finding and certainly agree the 5th was overly active and likely wrong, this is just not the kind of case the U.S. Supreme Court tends to accept Writs on.
NRB
August 7, 2009 at 1:45 pm
Actually, NRB, your earlier comment is the reason for this second post on the Kodrin’s Writ.
I just repaired the link to the Writ in this post, btw.
http://www.redmannlaw.com/pdf/finalwrit.pdf
Did you notice there was Co-counsel listed who has a specialized practice in this area? http://www.certworthy.com/about.htm
Obviously, I can not read with your lawyer eyes, so could you please point me to the “manifest jury error” identified by the 5th?
nowdoucit
August 7, 2009 at 2:30 pm
Basically, a jury’s factual findings are subject to a “manifest error” review on appeal. This means that the 5th Circuit may not substitute is findings of fact for that of the jury’s findings, unless it determines the jury committed manifest error. Outside of the 5th Circuit, this a very difficult and high standard for an appellant (State Farm) to meet. In the Kodrin case, the 5th Circuit simply said “we don’t see record evidence of bad faith and thus, we are fidning manifest error.”
I unfortunately had the La. 4th Circuit do the same thing to me in a State Farm automobile case pre- Katrina. The Judge who wrote the opinion susbtituted his findings of fact on liability for the accident and zeroed my client. The La. Supreme Court of course refused writs.
In contrast to the heightened and hence, more difficult standard of manifest error, legal rulings may be addressed de novo. This means the appellate court can all but ignore what the trial court did and make its own rulings.
In sum, I think the constitutional issues will not sound well with the Supremes. Also, as indicated previously, the Kodrin case does not have any real implications for Joe Blow sitting in Idaho. The Supremes are reluctant to take cases that have very limited or narrow impacts regardless of the merit.
NRB
August 7, 2009 at 3:31 pm
It shouldn’t matter if the court addressed it with the judges standing on their heads, the evidence was there and the jury saw it…on second thought maybe they were
nowdoucit
August 7, 2009 at 5:09 pm
Nowdy, after just reading Dennis P. Derrick, Esquire’s, VERY IMPRESSIVE Resume, citing he is:
“…a seasoned attorney with an established appellate practice in Massachusetts since 1977,”
I have more hope than ever for Mr. & Mrs. Kodrin. They deserve the bad faith damages awarded to them as a matter of law – nobody was doing them any favors by giving those damages to them. Frankly, I believe “Joe in Idaho” would be greatly affected if a jury of his peers awarded him punitive (or bad faith) damages only to have an Appellate Court take them away from him.
So kudos to Attorneys Redmann and Derrick and I hope they kick major ass in their continuing endeavor. We need more attorneys in this world that possess just an ounce of their stamina and faith in the judiicial system….win, lose or draw.
SHIRLEY HEFLIN
shirley heflin
August 7, 2009 at 11:57 pm
ATTORNEY FOR THE KODRINS, still doggedly on my mission to get the public – and, ideally, the U.S. Supreme Court – to understand what’s really at stake in this case, reporting in again! I respond to the some discussion seen on Slabbed just recently that demonstrates that one or more people seem to think like the Fed. 5th Cir. Court, who are still “missing the forest for the trees” here, and simply getting it wrong with their analysis (good wishes for the Kodrins appreciated and notwithstanding).
Much like the learned federal appellate judges on the Fifth Circuit, charged with analyzing whether there was any “manifest error” in how the trial jury handled the evidence and applied Louisiana state law and, in that assignment, “dropped the ball.”
The Fed. 5th Circuit panel disregarded mountains of affirmatively proven facts – evidence of multiple instances of violations of Louisiana state bad faith laws, each independent grounds under law for awarding penalties and most facts UN-controverted (e.g., untimeliness of adjusting, failure to disclose conflicts of interest), and simply ignored or “nullified” whole swaths of state laws that called for penalties, and instead got “tunnel vision” solely on this big issue:
• Whether State Farm, by eventually getting an expert to write them a “Get out of Coverage or at Least All Penalties for Bad Faith Tactics Note” trumps EVERYTHING else State Farm did, irrespective of Louisiana express state law, and irrespective of what the jury thought. And guess what? The answer they gave is “Yes; State laws and jury verdicts ARE trumped under the new Federal “Hired Gun Immunity” law the Fed. 5th Cir. appears to have ‘legislated,’ (UNLESS the potential far-reaching ramifications of such a ruling are addressed by the U.S. Supreme Court).
Insurance company executives at State Farm – AND every other insurance company – across the entire country were surely popping multi-hundred dollar bottles of champagne in excitement and gratitude contemplating this amazing “gift” from the Federal Fifth Circuit doing far more for them than perhaps billions of dollars in lobbying against consumer protection laws reigning in bad faith legislation that has been on the law books for generations. Or so I think.
Considering substantial numbers of Katrina victims still awaiting trial, and all other current and future alleged ‘bad faith’ insurance victims (ANY kind of insurance disputes, mind you) that will come in the vast Gulf region encompassed in the domain of the U.S. 5th Circuit, it is indeed hoped the U.S. Supreme Court will recall its own pronouncement that, not only has it granted writs in state law application scenarios such as this, it “undoubtedly should do so where the alternative is allowing blatant federal court nullification of state law,” Leavitt v. Jane L. 518 US 137 (1996).
For those interested in more details about the other instances of bad faith, read on:
On the record in this trial, the bad faith violations (which include misrepresenting pertinent facts that would affect their rights and coverage {writ, pp. 3-5, quotes the law} that were proven – any ONE of which the jury’s verdict re penalties should have been left untouched (i.e. no manifest error) – included but not limited to:
• Undue delays in starting to adjust the claim (See timeline on prior Slabbed post; **Bad Faith**;
• Undue delays in adjusting the claim, and advising of decision to pay or not (law gave State Farm 30 and 60-day limit to get this done (appreciating financial turmoil of insureds, this is mandate, not “suggestion”) – SF took c. 124 days. **Bad Faith**;
• SF never told Kodrins about its scandalous CONFLICTS OF INTEREST – that it had convenient option of using government checkbook to write gov’t check to pay flood ins. payments if SF – as sole judge – decided the loss was caused by flood, or write SF checks out of SF bank accts. Adj and SF never mentioned adj’s (and later “sham” expert’s) “opportunity” to save his boss well over $200K on the homeowner policy – which it did proceed to do. **Bad Faith**;
• Nor did SF ever tell the Kodrins, in addition to this blatant and outrageous conflict that SF was even getting paid a commission on the flood insurance payments on the gov’t tab it was offering to the Kodrins (and everyone else up and down the gulf coast). I.e. – SF was ALSO getting paid extra money when it put blame on flood and passed the buck on the US Taxpayer. **Bad Faith**;
• Nor – and especially “UN-Neighborly” of SF – while SF was trying to force a flood policy payment for limits (worth only about 1/3 the homeowner’s policy, fyi) down the Kodrins’ throats, SF never mentioned that accepting flood ins. money could jeopardize their rights to make claims on their homeowner’s policy. !. One would expect even a “Bad Neighbor” to advise about that kind of a conflict, especially if the law commands it, as here. Note SF did, indeed, later raise that the Kodrins did later accept flood money as an asserted SF defense in their suit as a defense to paying on their policy, to no avail. The jury was not amused, we are fairly certain. **BIG Bad Faith**;
• On the date of the first inspection of the Kodrin property, October 20, 2005, by SF’s adjuster Kaminsky. Kaminsky admitted under oath at trial that he saw evidence of wind damage, possibly from tornados (too), told the Kodrins in no uncertain terms it was “wind damage” and not only that he would “write it up” as a wind loss covered by the homeowner’s policy, but that he would “advocate it” that way. Sound good? Well, NOT to “management” it seems. Because according to Kaminski’s log, on the very same day, he has a meeting with his boss (i.e., management), and on that same day he emerges from the meeting then that same day writes a report without ANY indication he thinks wind played any part in causing the loss, and that “per discussion with management,” an engineer [Danner] needs to [eventually] go look at the property. This is what most people would, and what the jury was entirely within its rights to, conclude was evidence of a big lie in the report as to what Kaminski saw, to the detriment of the Kodrins, to the benefit of SF, and delaying quite a long time the adjustment of the claim. **BIG Bad Faith**;
• NOVEMBER 26, 2005 – More than 86 days since loss adjustment started – “Expert” Danner finally gets out the property, but it has been cleared. There’s just a slab. There’s photo’s, but he testified he hardly looked at them. He also testified that he never did research on, nor attached reports on: the hurricane’s wind speeds in the area, nor when the winds blew hardest, timing of same; nor when the flood waters came, nor from what directions, nor at what speed, nor with what force, etc. The stunning absence of knowledge on his part accounts for how brief his report was – just a few hollow paragraphs – about 252 or so words, total. Had he checked, he would have figured out the very strongest winds blew hours before the flood waters crept in (yes, “crept,”). And, under basic insurance law, whatever State Farm and their expert did not know, they are/were required to assume facts beneficial to the insured, anyway. So, when they denied the claim, since they didn’t know wind speeds, timing, flood arrival timing, direction, force, etc. it was bad faith per se for State Farm’s expert to pretend he had even a clue from looking at rubble and know if that rubble was rubble before or after the flood waters got there. And, under Louisiana law, since the burden of proof on structure claims is on the insurer/State Farm, State Farm had to prove that rubble was still an intact home after the strongest winds hit and before the flood waters slowly filled the area, nearly reaching the underside of the roof. State Farm is indeed responsible, under Louisiana law, for the absurd actions of its expert in doing a sham of a report, and presenting what a report to a sophisticated adjuster (that half-way mature child could tell was a sham of a report), and State Farm was alleged to have known that it did not have any reasonable basis to deny the claim. That plus knowing what Kaminski knew and told Mr. Kodrin. ** Bad Faith**.
So, to wrap up, “Joe in Idaho” darn well better be concerned about it. Or at least “Ms. Lippy” in Mississippi and anyone’s “exes who live in Texas,” since the Fifth Federal Circuit Court’s jurisdiction covers MS, LA and TX, as that court will hear appeals of federal court cases between any insureds and any insurance companies (home – hurricane, fire, hail; auto accidents, etc.; health ins. coverage denials; anything!) wherein state bad faith laws are alleged breached.
As previously explained on Slabbed in detail, and as can be best shown/seen by reviewing the writ application, and also by reviewing the supporting documents, articles, photos, etc. all available at http://www.redmannlaw.com/press-and-news.html this is to attempt a summary of why the Kodrin case is so much bigger than a mere “insurance coverage dispute” whose outcome the petitioners didn’t agree with:
It simply is a big deal.
For more info, about this, the Writ Press Release, Kodrin photos, documents, visit http://www.redmannlaw.com/press-and-news.html
And/or see my even more detailed discussion of facts, law, experts’ testimony at trial, SF tactics, etc. at Slabbed’s story dated 07-31-09 at:
http://slabbed.wordpress.com/2009/07/31/the-kodrins-take-the-5th-to-the-supremes/#comment-8571
Many thanks, again, to Slabbed, and anyone else interested in an honest and serious discussion about what went on and is going on in this case, and why it should (or shouldn’t, if you have that opinion) matter!
John W. Redmann
Attorney for the Kodrins
New Orleans
http://www.redmannlaw.com
johnredmann
August 9, 2009 at 8:40 am
Dear Mr. Redmann: It’s really too bad we can’t “clone” million of attys. like you !!
You said it best when you said what’s true:
“…And, under basic insurance law, whatever State Farm and their expert did not know, they are/were required to assume facts beneficial to the insured..”
Now there’s a concept that’s obviously foreign to SF in the instant cause (and many others, of course).
I’ve said it once and I’ll say it again, the Kodrins are so lucky to have you, your Firm and the over-the-top qualified Appellate Counsel, by their side.
SHIRLEY HEFLIN
shirley heflin
August 9, 2009 at 2:13 pm
Ms. Heflin – I’m sorry we can’t clone millions of appreciative people like YOU. Maybe a few judges like you, too.
Thanks so much for your very kind and supportive words; they mean a lot.
johnredmann
August 19, 2009 at 7:41 am