La. Citizens appeals to SCOTUS, despite order to pay policyholders

by R.J. Lehmann on April 20, 2012

Louisiana Citizens Property Insurance Corp. on April 18 filed a last ditch appeal to the U.S. Supreme Court seeking to overturn a more than $100 million judgment that it was slow to adjust claims from 2005’s Hurricane Katrina and Hurricane Rita, the Associated Press is reporting.

The appeal marks the last judicial option left for the state-run insurer-of-last-resort, which has lost all of its prior appeals in state court. Indeed, as reported by Rebecca Mowbray of The (New Orleans) Times-Picayune, Citizens filed its appeal on the same day that Jefferson Parish Judge Henry Sullivan signed an order for the full $104.6 million to be deducted from Citizens’ account at Regions Bank.

Sullivan was the local court judge who handed down the original $92.8 million judgment in March 2009 in a suit brought by 18,500 Citizens policyholders who complained the insurer did not start the adjustment process for their hurricane claims within the statutorily mandated 30-day period.

The amount of the award has since grown to $104.6 million, due to judicial interest.  An additional group of 6,500 policyholders also have pending claims against Citizens for as much as an additional $35 million.

National Underwriter’s PropertyCasualty360.com site reported April 20 that Citizens has filed a temporary restraining order against Regions Bank to prevent it from complying with Sullivan’s order, but quoted policyholder attorney Wiley Beevers saying that he intends to file a motion to vacate the order on the bank.

When he appeared on the FIRE Podcast earlier this month, Louisiana Insurance Commissioner Jim Donelon said he didn’t think an appeal to the Supreme Court once the order to disburse funds was handed down, as “the money would have been spread to the four winds by then.”

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  • King

    Just an editorial comment on the headline:u00a0 A party to litigation does not appeal “despite” an adverse order, but _because_ of it.u00a0 Otherwise there is nothing to appeal.

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