Supreme court will hear hurricane suit
BY VICI PAPAJOHN Gulf Breeze News vici@gulfbreezenews.com

T h e issue of wind vs. flood still looms large in Northwest Florida. Though high courts in both Alabama and Mississippi have ruled in support of their state's Value Policy Laws (VPL) in suits resulting from 2005 Hurricane Katrina, Florida policy holders are without resolution two years and seven months after Hurricane Ivan.

While Florida's VPL was upheld in the Fourth Circuit Court of Appeals' decision in Mierzwa v. Florida Windstorm Underwriting Association, and the Florida Circuit Court confirmed the Mierzwa decision, numerous wind carriers balked at paying wind damages after Hurricane Ivan. The carriers claimed that they were not responsible for damages not caused by wind, and battle lines were drawn. Insureds raised the battle cry of the Mierzwa decision, and insurance companies cried foul. They refused to pay.

In short, the Mierzwa decision requires that "if an insurer has any obligation under the policy to pay on account of a covered peril, and the structure is a total loss, then the insurer is responsible for paying the total amount of the policy." Insurers were expected to pay policy limits for homes with both wind and flood damage from the 2004 hurricanes as long as both perils played a part in the destruction of that property. Hundreds of Northwest Florida homeowners found themselves without checks to pay off their mortgages or to help fund removal of the destroyed property and hired attorneys or joined a class action suit, Scylla Properties LLC vs. Citizens Property Insurance Corp.

Citizens Insurance policyholders emerged victorious in the Scylla Properties LLC vs. Citizens Property Insurance Corp. all the way to the Florida Circuit court level, and the Florida Farm Bureau Casualty Insurance Company vs. Cox is due to go on the fast track before the Supreme Court in April according to court sources.

"The reason for a valued policy law was to avoid litigation," explained Attorney Jason H. Coffman at a recent Navarre Area Board of Realtors (NABOR) meeting. "There were two primary reasons to have a VPL - first to avoid overinsuring and second to have definitive rules for responding in an emergency. We had that emergency. Insurance companies want to turn it into an average, ordinary situation and stretch it out." Coffman has his own law firm and is one of the lawyers working on the Scylla Properties class action lawsuit against Citizens.

"If Cox wins in the Supreme Court, it may not apply to Citizens, as Citizens is likely to claim that is for private insurance carriers, not public. The first DCA recently ruled Ubishaw case, the first DCA ruled that VPL applied to Citizens as well," assures Coffman. "The frustrating thing is that Citizens wants to claim that the courts are asking them to pay for flood. What the courts are doing is upholding the law."

"In late March, the Ueberschaer vs. Citizens case went before the first DCA and they confirmed that VPL applies to citizens in the same manner as all carriers. It may take that case getting to the Supreme Court, but I predict the homeowners will win."

"The insurance companies would have you think they are going to go bankrupt, but they are the only ones who gain when litigation ensues. VPL says if you wrote a policy then give them a check for the amount of the policy. Until the Florida Legislature rewrote the law on June 1, 2005, it was the law of the land."

"For the insurance companies, it is business, it's not personal," Coffman says. Hyper analyzing and sorting hurricanes into multiple perils, insurers can find grounds for denying coverage. Some insurance companies deny coverage for the entirety of a claim, under these classifications or deny coverage for various parts of a claim-after first placing the burden on policyholders to prove which parts are covered. They make a lot of money while they stall or refuse to pay, according to Coffman.