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August 2005
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Fortune Magazine on Wind vs. Water

Fortune's take on the wind vs flood coverage issue. 

It is interesting how the insurance coverage issues seem to be affecting language itself, as far as I can tell from the media reports from Mississippi, Louisiana, and now Texas.  The word "flood" seems no longer politically correct on the Gulf coast -- substitute "surge", or better yet, "wind-driven surge."  Instead of "waves", use "wind-driven water."  If everyone talks in code, will the insurance companies will give up the flood exclusion?  No, it's too late, the English language doesn't change that fast.  My American Heritage Dictionary (1985 ed.) defines "flood" as "an overflowing of water onto land that is normally dry. "   Katrina caused heavy flooding, and so will Rita.   

D.C. Landlord's Liability for Lead-Based Paint Poisoning Expanded By Court of Appeals

The D.C. Court of Appeals has held that a landlord can be sued in negligence for lead-based paint poisoning of a child even if the landlord had no notice of the presence of lead-based paint on the premises, or notice of the presence of chipping, flaking or peeling paint --  provided that the landlord knew that a child under the age of 8 years old lived there. Childs v. Purll.

The Court based its decision on a D.C. regulation which creates an affirmative duty on the landlord to remediate lead paint hazards in an apartment where such young children live.

The Court stated, in pertinent part, as follows:

Although the Purlls and their management company may not have known there was lead paint in the premises, “actual knowledge [of the defect] is not required for liability; it is enough if, in the exercise of reasonable care, appellee[s] should have known that the condition . . . violated the standards of the Housing Code.” Whetzel, 108 U.S. App. D.C. at 393, 282 F.2d at 951. “Ordinarily, the landlord will be chargeable with notice of conditions which existed prior to the time that the tenant takes possession,” RESTATEMENT § 17.6 cmt. c, and the creation in § 707.3 of an affirmative duty to furnish lead-free premises implies a concomitant, antecedent duty to ascertain whether the premises in fact are lead-free.

Upon notification that the prospective tenants of 1411 Ridge Place would include children under eight years of age, § 707.3 imposed a specific, affirmative duty on the owners and their agents to provide those premises to the Childs family in a lead-free condition or not at all.

(footnotes omitted, emphasis added).

In this case, the landlord was notified of the age of the children in the lease agreement.

Citing a New York case, the Court further stated that, " In effect, § 707.3 presumptively serves to put the landlord on constructive notice of any lead paint hazard in premises occupied by children under eight."

One way to try to defend against the statutory presumption of negligence is to show that the landlord did all that all reasonable person would do to establish that the premises were free of lead paint and to comply with the regulation.

This is a major expansion of the liability of landlords for lead-based paint poisoning in the District of Columbia, in the same vein as recent lead poisoning cases in Maryland

The end result is that any child under 8 years old in the District of Columbia who sustains lead-based paint poisoning in an apartment has a cognizable cause of action in negligence against the landlord, even if the landlord had no knowledge that there was lead-based paint on the premises and had no knowledge that there was flaking, peeling, or chipping paint there.  The focus of lead poisoning litigation in the District will necessarily be on the proof that the child got the lead poisoning on the premises, rather than from other sources such as the municipal water system.

The Court's opinion, however, rejected the argument that a lead poisoning claim could be the basis for a claim under the D.C. Consumer Protection Act.

The Race to Retain Experts -- Is It On?

Bob Ambrogi put together an interesting piece in the IMS newsletter about the types of experts that might be in high demand in the wake of Katrina (and now Rita as well).  He also did a companion article containing relevant links for the legal system in the impacted States.

Substantial businesses are probably going to need an array of the right experts even if they have no intention of filing suit -- they will need experts to assist with a properly documented and justified proof of claim.

Hurricane Related Coverage Litigation in Maryland

Today's Washington Post reported on Maryland residents who still have not recovered from Hurricane Isabel and who are involved in a class action lawsuit against FEMA and a number of insurers.

Hurricane victims who have disputed insurance claims with FEMA and their private insurers have banded together and created an interesting website.

There have been a couple of class actions filed in Maryland arising out of Hurricane Isabel. One, the "Howell" suit, concerns the method of calculating losses. A copy of the complaint is available here.

Another class action, the "Moffett" suit, was filed in June, 2005 against FEMA and a number of insurers. A copy of the complaint is available here.

Mississippi AG Suit Against Insurers

Media Matters on Sept. 16 ran a favorable piece about the Mississippi Attorney General's suit against the insurers who are adjusting Katrina losses, accusing the Wall Street Journal and other major papers of leaving key details out of their stories.   However, Media Matters itself doesn't appear to have read the complaint and "Exhibit A" which is attached to it, which on its face is suspect.  For one thing, "Exhibit A" is clearly a  'sample ' document by a nonexistent insurance company,"Nationwide Flood Insurance Company."  There is no such insurer listed in Best's directory.

Now, one must assume that the Mississippi Attorney General has some other evidence supporting his request for a TRO, because the Exhibit A attached to his complaint isn't evidence at all.   

Later: Mississippi Attorney General Jim Hood gave a lengthy explanation of his suit in a television interview ("Attorney General Jim Hood Has Advice to Katrina Victims"). From his interview, it sounds like he was personally out in the field and saw the advance payment forms which were being used, and that he has jumped to the conclusion that insurers might use the forms as a basis to deny coverage. He did not say that any insurer had in fact used an advance payment form as a basis to deny coverage. Much Later: WLOX-13 has an enlightening interview of Mississippi attorney Dickie Scruggs who explains why he is planning to begin filing coverage suits. It sounds like he is intending to include in the suit insurance agents who allegedly told the plaintiffs that they did not need flood insurance -- probably to destroy diversity and keep the suits in Mississippi courts. The story also includes an interview with a physician who intends to be one of the plaintiffs. The physician said that he had as much flood insurance on his house as he could buy, but that it will not be enough to cover the value of what was lost. So, the physician at least was not mislead about the nature of the coverage that he needed.