Eleuterius is named defendant in a second State Farm case

Anthony property: Pre-Katrina photograph documenting elevation before renovation/addition .

Once again, Marshall “Rocky” Eleuterius appears to be a super salesman and named defendant in Katrina litigation – first in O’Keefe and now in Anthony v State Farm.

According to the Complaint, the State Farm policy covered the Anthonys property located in close proximity to the Bay of St. Louis on the Gulf of Mexico.

State Farm and its agent Eleuterius expressly represented to the Plaintiffs that they would have full and comprehensive coverage for any and all hurricane damage to the insured residence, including any and all damage proximately, efficiently and typically caused by hurricane wind and “storm surge” proximately caused by hurricanes.

A particularly interesting section of the Complaint addresses “storm surge”.

…regardless of whether the total damage to Plaintiffs’ insured property was caused by hurricane wind, storm surge proximately caused by hurricane wind, or both, the so-called “flood” exclusion, which State Farm defines in the subject policy and in its denial letter as “flood, surface water, waves, tidal water, tsunami, seiche, or overflow  body of water, or spray from any of these, all whether or not driven by wind,” is not applicable here.

Although the subject policy does not define “flood” or any of these other listed perils, none of them, as they are commonly understood and defined in the English language, occurred during Hurricane Katrina or caused the damage to Plaintiffs’ property.  The Gulf  of Mexico does not “flood” or “overflow.”

Waves” or “tidal waters,” as those terms are commonly used, likewise did not occur during Hurricane Katrina. Hurricane Katrina was not a “tsunami” or “seiche.” Plaintiffs’ insured residence was damaged by “hurricane wind” and/or “storm surge” proximately caused by Hurricane Katrina. “Storm surge” is a meteorological phenomenon caused by major hurricanes like Katrina. Indeed, a number of resources and experts in meteorology, including NOAA, the National Weather Service, and the National Hurricane Center note that “storm surge” is part and parcel of a hurricane and is distinguishable from “flood” damage.

Plaintiffs’ complaint provides the history of their claim and includes an engineer’s report of wind damage among the supporting exhibits:

Prior to August 29, 2005, the Plaintiffs purchased an insurance policy from the Defendant

State Farm. Said policy was purchased through Agent Eleuterius. Said policy was bound, effective and kept current through August 29, 2005, as evidenced by the declaration page attached hereto as Exhibit “A”,

Plaintiffs also purchased a flood policy to insure they were covered for all contingencies…

Based on the representations of hurricane coverage made by State Farm and Defendant Rocky Eleuterius and the express policy provisions, the Plaintiffs had the reasonable expectation that the subject policy, in conjunction with their flood policy, would provide full and comprehensive coverage for all hurricane damage to the insured residence and relied entirely on Defendants’ representations made as to the contract for insurance. The Plaintiffs relied upon these representations when the subject policy was purchased, issued and delivered by Defendant State Farm and Defendant Agent Eleuterius.

On August 29, 200S, within the policy coverage period of the subject policy, Hurricane Katrina resulted in severe damage the Plaintiffs’ home.

On or about November 4,2005, Plaintiffs were paid $158,600.00 from benefits under their flood policy. This amount represented policy limits of$124,100.00 under their dwelling coverage and $34,500.00 under their contents coverage. See Exhibit “B”.

Plaintiffs accepted said payment but were in no way made whole. Plaintiffs then turned to their homeowners’ policy as it was their firm belief that their home had also received severe damage to wind.

Subsequently, the Plaintiffs were informed that their claim had been assigned to an Adjuster ostensibly to investigate Plaintiffs’ claims. However, Plaintiffs never met with the adjuster and were not present at the alleged inspection oftheir property site.

On November, 20, 2005, State Farm sent Plaintiffs a letter denying their claim, stating: based on our discussions, site inspection, and investigation, it was determined the damage to your home was caused by flood waters. Damage resulting from this cause is not covered by your policy.

State Farm issued a check in the amount of $8,710.01 on or about April 28, 2006, for settlement of the Plaintiffs’ claim under their homeowners’ policy resulting from wind /hail damage.

Anthony home after renovation/addition

Plaintiffs retained Compton Engineering to aide in determining the cause of their loss. The Compton report, dated May 10, 2006, and attached hereto as Exhibit “C”, concluded the following:

• Rising water and wave action was responsible for much of the exterior wall structural damage observed on the ground and second floor.

Anthony home after Katrina

• All the roofdamage including the missing metal roof, failed roofdeck, missing vinyl trim on the soffit and fascia board and the fractured wood members seen at the top of the roof ridge line is believed to have been caused by the wind.

• A case can be made for a high wind event (tornado or wind shear) occurring during the storm on the east side of the structure. The factors supporting this belief are as follows:

1. The three large trees that had been located on the northeast comer of the structure.  Two had their trunks twisted off several feet above the ground and the one dead one still standing had all the bark removed from its trunk.
2. The failure of  the northeast comer foundation post (snapped in two approximately ten feet above grade). The way the house floor frame and roof had been connected to the perimeter supporting post had provided excellent lateral bracing in the east/west and the north/south orientation. It is difficult to understand how this support post failed from just storm surge yet none of the other posts (some of which were longer) show any signs of structural damage.
3. The east bearing wall on the second floor failed at the top (not the bottom which is common for water pressure), the bottom still being connected to the floor.
4. The structural roof wood members that fractured were on the east side of the structure. Most of these failures were on the north side of the ridge line.

Upon receipt of the report, Plaintiffs forwarded a copy of the report to State Farm.

To the best of Plaintiffs knowledge, no structural engineer was ever retained by State Farm,either before or after the Compton report, to inspect the subject property and determine the cause of damages.

On or about August 8, 2006, State Farm sent Plaintiffs another letter indicating that, despite the information obtained from Compton Engineering, Inc.’ s report, their position remained unchanged. (See Exhibit “D”)

The exclusion relied upon by Defendants does not exclude “storm surge” from coverage. Defendants’ reliance on the so-called exclusion is misplaced. Alternatively and/or additionally, the policy is ambiguous and must be construed to bind coverage in favor ofthe insured. Still further, the alleged exclusion does not apply. The Plaintiffs, having spoken with eyewitnesses and having reviewed the weather bulletins from August 29,2005, contend that there were numerous tornados known to have touched down in the area oftheir home. Plaintiffs’ home sustained severe damage due to the hurricane winds and tornado activity prior to the arrival of the surge waters.

In addition to the report from Compton, Plaintiffs had an expert report from Neil Hall incorporating a Dr. Pat Fitzpatrick report specific to the property and an additional report that is a peer review of the Hall/Fitzpatrick report:

The house was constructed in the 1970s with 6’ piles and tie-beams attached at grade level between the base of the piles. The front gable-end of the house faced SE towards Riverview Road. After the house was constructed, the exterior cladding (the photos show rigid mineral shingles, possibly with asbestos containing material) was covered with blueboard insulation and vinyl or aluminum siding. (The siding on the remaining timber piles is aluminum siding; this report assumes that aluminum siding was used on the elevated portion of the house, as well..

Exterior walls were constructed under the elevated portion of the house so that the vinyl siding was uniformly applied from the eave to the ground level…About 2002, an addition was made to the rear of the house at which time the siding and metal roof were extended towards the waterfront. The addition was a screened-in patio.

Mr. Hall and Dr. Fitzpatrick are familiar names to those who follow Katrina litigation.  State Farm, however, goes beyond its usual attempt to exclude a Plaintiff’s expert witness with a 22-page motion to exclude Neil Hall.

Plaintiffs proffer Mr. Hall, an architect, to testify that wind, rather than water, destroyed the roof and elevated level of their house. Mr. Hall is a self-described “professional expert witness” with no degree in engineering and no expertise in meteorology or hydrology. Mr. Hall’s report offers no calculations or physical evidence of any kind to show that wind, rather than water, destroyed Plaintiffs’ house. Instead, Mr. Hall’s methodology depends entirely on a chronology of wind speeds and storm surge levels prepared for litigation by Plaintiffs’ meteorologist Dr. Patrick Fitzpatrick. Relying on this purported chronology and an erroneous application of the Enhanced Fujita Scale (the “EF Scale”), a scale designed to deduce wind speeds from tornadoes, Mr. Hall concludes in wholly conclusory terms that winds destroyed Plaintiffs’ house prior to the arrival of peak storm surge levels. For multiple reasons, Mr. Hall’s opinion is unreliable and inadmissible. Plaintiffs cannot meet their burden to show otherwise.

Why State Farm selected Anthony to hit hard on Hall’s use of the Enhanced Fujita Scale is anyone’s guess.   Rocco Calaci’s guest post on Merlin’s blog is an excellent introduction to the issue for anyone unfamiliar with the Enhanced Fujita Scale.

However, Plaintiff’s Counsel came back with a knock-out Response in Opposition to Defendant’s Motion to Exclude Expert Testimony of Neil B. Hall.   So thorough that I’m not certain it could have been done any better, it has two particularly interesting exhibits:

Dr. Hall has also published in the area of which he is testifying, thereby subjecting himself to peer review of the methodology he invoked to analyze the damage to property such as the Plaintiffs’. See his article, “Differentiating Between Wind and Flood Damage in Hurricane Katrina,” attached as Exhibit “C”. This article specifically presented and explained Hall’s use of the Enhanced Fujita scale to identify damage causation subsequent to a hurricane. See Exhibit “C” at page 10.

Dr. Hall’s expertise has also been recognized by Defendant State Farm – who now seeks to exclude Dr. Hall’s testimony. Dr. Hall has been retained three to four hundred times to give a building damage assessment for State Farm.  See Deposition of Neil Hall in Remel v. State Farm, attached as Exhibit “D”.

Anthony v State Farm is definitely a case to watch.  Stay tuned!