Louisiana Citizens Property Insurance Class Action Settlement Gets Final Approval

Louisiana Citizens Property Insurance Class Action Settlement Gets Final Approval

By Anne Bucher

A Louisiana judge has given final approval to an estimated $40 million class action settlement between Louisiana Citizens Property Insurance Corp. and a class of policyholders over alleged claim handling delays following hurricanes Katrina and Rita. This class action settlement will resolve a long-running dispute from policyholders who accused Citizens of waiting 30 days after being contacted by policyholders before beginning the loss adjustment process in violation of Louisiana law.

Under the terms of the class action settlement, Louisiana Citizens will pay $4,500 for each claim they show was improperly delayed. Each claimant is expected to receive about $3,000 after attorneys’ fees and other court costs are considered.

In March 2009, Judge Henry Sullivan awarded the plaintiffs in the Louisiana class action lawsuit $92.8 million, but more than 18,500 eligible Class Members discarded their notices. On appeal, the U.S. Supreme Court upheld the award, which has continued to grow with accrued legal interest. Louisiana Citizens agreed to settle the remaining class action lawsuits. Last year, the insurer paid out $108 million to about 18,500 claimants in a class action settlement.

Now that Judge Sullivan has given final approval to the class action settlement, the court-appointed special master will adjudicate the remaining claims. Thomas R. Juneau, Esq. was appointed by Judge Sullivan to oversee the settlement. It is unclear how many policyholders will come forward to collect on the settlement. However, Louisiana Citizens has budgeted $40 million to resolve claims from this class action settlement.

Class Members include all past and present policyholders of Louisiana Citizens Insurance who, on or after Aug. 29, 2005, provided notification of loss resulting from hurricanes Katrina and/or Rita and whose loss adjustment was not initiated within 30 days after notification. This summer, approximately 80,000 notices about the class action settlement were mailed out to current and former policyholders.

Louisiana Citizens is a non-profit, state-sponsored insurance company that has been hit with a number of hurricane-related lawsuits following hurricanes Katrina and Rita. In 2010, the insurer agreed to a class action settlement over claims that it had withheld payments of general contractors’ overhead and profit from amounts paid under homeowners’ insurance claims.

The plaintiffs are represented by Steven M. Mauterer, Wiley J. Beevers and Shayna Lynn Beevers of Beevers & Beevers LLP; Robert Ates of Ates Law Firm PC; and Fred L. Herman of Fred Herman Law.

The Louisiana Citizens Property Insurance Class Action Lawsuit is Oubre, et al. v. Louisiana Citizens Fair Plan, Case No. 625-567, in the 24th Judicial District Court for the Parish of Jefferson, State of Louisiana.

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