Denied: Class Action V. State Farm: Senter Ruling Stops One Woman's Quest

Mar 23, 09:51 AM

Current Headlines: By Tom Wilemon, The Sun Herald, Biloxi, Miss.

Mar. 23--GULFPORT -- U.S. District Judge L.T. Senter Jr. has denied class-action status for Judy Guice's lawsuit against State Farm.

In an opinion filed Thursday afternoon, Senter wrote that the "sweeping relief" would prevent the insurance company from meeting its burden of proof because of the "possible variations that may exist" in claims cases. Lawyers for Guice had wanted all legal disputes in "slab cases" put in one class-action suit. Policyholders and State Farm are at odds over whether water, wind or what ratio of each destroyed houses during Hurricane Katrina.

"We are pleased with Judge Senter's affirmation," said Fraser Engerman, a spokesman for State Farm. "Each claim is unique and no two property owners experienced the same type of loss. It is only right each claim be tried in court separately. We have evaluated every Mississippi claim based on its own merits and are committed on paying what we owe based on our contract with each policy owner."

State Farm is now readjusting homeowner claims.

Richard T. Phillips, the lawyer representing Guice, said although he was disappointed with the judge's ruling, it does help clarify State Farm's obligations in presenting burden of proof.

"The crucial exclusion under the State Farm policy is the water-damage exclusion," the judge wrote in the opinion. "This exclusion covers damage from storm-surge flooding, the incursion of tidal water driven on shore during this windstorm. Because this is a coverage exclusion, State Farm has the burden of proving the extent of the loss caused by this excluded peril. This rule of law concerning the allocation of the burden of proof will apply to all cases brought against State Farm under this form of its homeowners' insurance policy, and establishing a class action is not necessary to establish its general applicability."

Phillips said he hopes the Guice case will continue to bring out information that will be helpful to others who lost their homes, even if it cannot be a class-action suit.

"State Farm had the obligation and the opportunity a year and a half ago to properly pay those slab claims under the terms of their contract," Phillips said. "State Farm chose to walk away from that obligation and that opportunity. Now, after a year and a half of litigation by Ms. Guice and many other homeowners and after a year and a half of suffering of thousands of homeowners, whose claims are still unpaid, State Farm wants to 'readjust' those claims. They had the obligation to do so a year and a half ago and chose to turn their backs on the policyholders at that time."

-----

Copyright (c) 2007, The Sun Herald, Biloxi, Miss.

Distributed by McClatchy-Tribune Business News.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.