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Insurers Push Back Against Judge's Order on Hurricane Sandy Cases

Joseph Jaafari | Property Casualty°
December 5, 2014

Insurance groups are fighting back against a sweeping order announced in November that would reopen all Hurricane Sandy cases for further discovery into how insurance companies evaluated properties for damages.

The order, issued by Judge Gary R. Brown of the U.S. Court for the Eastern District of New York, was in response to Deborah Raimey and Larry Raisfeld’s case against Wright National Flood Insurance, which evaluated their home through a third party engineering firm in Florida, U.S. Forensic. In two prior inspections, the Long Island home was deemed to be uninhabitable with damages of $205,000.

Wright only paid out $80,000, according to court documents obtained online through the Federal registry.

However, with an awkward workflow of rough drafts and inspections done through photographs, the judge found that U.S. Forensic had intentionally changed the amount of damage done to the house from Hurricane Sandy in order to avoid Wright paying out full damages to the plaintiffs, according to Brown’s order that was publicly released.

Brown demanded that the defendants in all Sandy-related cases disclose copies of all reports regarding the evaluation of homes, “plus any drafts, redlines, markups, reports, notes, measurements, photographs and written communications related thereto."

But the breadth of the order has a number of insurance companies and their legal teams scrambling to meet the Dec. 12 deadline, and has forced a few to file letters asking the judge to either extend the deadline or narrow the language in the order.

“The expansive document production obligations imposed by… the Order on all defendants in Sandy cases are overbroad and unduly burdensome,” wrote Douglas Dunham from the firm Quinn Emanuel, which represents State Farm.

Other lawyers that represent almost two dozen insurance groups have written letters saying that Brown made sweeping generalizations on how insurance companies work with their contractors and on how they conduct inspections.

“There is no evidence that adjusting companies…use a similar process or even if so, that the process is tainted in any way,” wrote Gerald Nielsen and Theodore Brenner, who represent a long list of insurance groups including Wright, in a letter to Brown. “It is further noted that there is absolutely no evidence that the subject engineering firms acted at the direction of the Defendants.”

Even President Obama’s top pick for his next Attorney General, U.S. Attorney Loretta Lynch,  sent a notice on behalf of 82 FEMA cases and asked that the court modify the order to be directed at cases where two adjusters disagreed on damages, or just limit to cases where U.S. Forensic was doing inspections.

“The actions of one engineering firm in one particular case cannot be imputed on all engineers,” wrote Lynch, who also said that FEMA does not have the authority to directly obtain all the documents included in Brown’s order.

Lawyers for Wright National Flood Insurance and U.S. Forensic did not respond for comment.

The content of this article is intended to provide general information and as a guide to the subject matter only. Please contact an Advise & Consult, Inc. expert for advice on your specific circumstances.

SOURCE: www.propertycasualty360.com

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