“Whistleblowers” barred from testifying as witnesses in State Farm Insurance Hurricane Katrina case

Back in August 2006, I reported on Kerri Rigsby and Cori Rigsby, sisters who worked as independent adjusters for State Farm. The sisters were deemed “whistleblowers,” for their allegations of corruption at State Farm Insurance.

The sisters came forward, claiming that there was fraud in the Biloxi and Gulfport field offices related to the processing of Hurricane Katrina claims. They said that supervisors were pressuring adjusters and consultants to attribute hurricane damage to water, rather than wind, so that claims would not have to be paid. Under the State Farm policies, water damage is not covered, but wind damage is.

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Nursing Home Owners Acquitted in Hurricane Katrina Deaths

Sal and Mabel Mangano, owners of a nursing home where 35 patients died after Hurricane Katrina, were acquitted of 35 counts of negligent homicide and 24 counts of cruelty yesterday. The trial lasted three weeks, but the decision by the jury took only four hours.

The couple owned St. Rita’s Nursing home in St. Bernard Parish, outside of New Orleans. The nursing home was not evacuated as the hurricane approached and patients ending up drowning, some in their beds. The prosecution said that the owners should have listened to the hurricane warnings and evacuated.

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Insurance Companies Win Major Katrina Ruling

Back in June, I reported that homeowners who lost homes in Katrina were waiting for a major ruling in their case against insurance companies.

U.S. District Judge Stanwood Duval Jr. had ruled in November that the insurance polices were ambiguous with regard to the language excluding water damage. He said the policies should have distinguished between floods caused by (a) a natural disaster, which would not be covered by most regular homeowners’ policies, or (b) a broken levee, which might be considered a man-made disaster and might be covered under regular policies. His decision was in favor of the policyholders.

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Judge Promises Quick Decision in Katrina Insurance Case

Carolyn King, one of the 5th U.S. Circuit Court of Appeals judges who will rule on the case involving New Orleans homeowners and insurance companies, has promised a quick ruling. Although such rulings usually take months, Judge King has acknowledged that tens of thousands of people could be affected by the case, so a quick ruling is important.

In November, U.S. District Judge Stanwood Duval ruled for policyholders who said that the insurance policy language excluding water damage from policies was ambiguous. He said that the policies didn’t distinguish between floods and rainfall that were acts of God, and other water damage caused by something like a broken levee. (I have a hard time seeing how a policyholder might think that a flood did not include water from a levee break. A flood is a flood, and flood damage was excluded.)

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