State Farm® appeals judge's order of punitive damages in Broussard

Arguments are set to be heard on Dec. 5 in State Farm's appeal of the Broussard v. State Farm decision. State Farm was surprised by a verdict by U.S. District Judge L.T. Senter in Broussard v. State Farm that took the wind versus water case away from a jury and ordered State Farm to pay policy limits and $1 million in punitive damages to a Mississippi couple whose home was damaged by Hurricane Katrina. The judge reduced the original jury award of $2.5 million.

State Farm contends the Broussard home was destroyed by flood, which is not a covered peril under the homeowners contract. Read State Farm's appellate brief.

Broussard vs. State Farm

The first Katrina-related trial involving State Farm resulted in a verdict on January 11. We were surprised and disappointed by the Broussard v. State Farm verdict because our claim investigation and the evidence presented at trial, both by the plaintiffs and State Farm, confirmed for us that the Broussards' home was destroyed by water, not by wind. The facts speak for themselves.

Issue
Hurricane Katrina left only a concrete slab where Mississippi policyholders Norman and Genevieve Broussard’s (plaintiffs) home previously stood. The Broussards believed their home was destroyed by wind and a tornado, and that State Farm breached the contract of insurance by failing to pay wind damages owed under their homeowners policy. State Farm believed the facts would show that the home was destroyed by water.

The Trial
U.S. District Court Judge L.T. Senter presided. A jury of eight Mississippi residents, all of whom sustained some sort of damage to their homes from Hurricane Katrina, was selected on the first day. The judge and jury heard two days of testimony.

What was presented at the trial

The Policyholder

• Norman Broussard, a retired insurance agent, testified that he and his wife evacuated to his daughter’s home during Hurricane Katrina. While there, they “heard” a tornado’s roar and witnessed damage near their home they attributed to a tornado.



• Mr. Broussard said he never purchased flood insurance, yet admitted that his home received enough damage from three feet of water during Hurricane Camille that it had to be gutted and the interior rebuilt. He also said his home sustained very little, if any, wind damage from Hurricanes Camille, Frederick and Georges.



• Texas civil and structural engineer Tim Slider served as an expert witness for the plaintiffs, and testified that he could not confirm the Broussards' home was destroyed by a tornado. Rather, he said if a tree top penetrated the home, the pressure would have caused the house to explode. He testified the Broussards' home was likely under 12 feet of water sometime during Hurricane Katrina.

State Farm

• State Farm claims personnel clarified for the court that State Farm handles each claim on its own merits.



• Two experts from the University of Florida served as witnesses for State Farm. Dr. Kurt Gurley, a wind expert, testified that it was his opinion that the plaintiffs’ home was destroyed by water and surge.



• Dr. Gurley testified that there was no physical evidence to support the plaintiffs’ theory that a tornado or hurricane winds destroyed the plaintiffs’ home. He said winds for the entire region were insufficient to destroy any home and that there was a 75% probability that zero to 35% of the Broussard home’s shingles might have been damaged by wind.



• Dr. Gurley explained that he arrived at his conclusions by looking at official wind readings, applying scientifically accepted formulas to those readings, reviewing photos and inspecting the Broussards' home site.



• Based upon Dr. Gurley’s opinion, we extended an offer to settle in the amount of $20,000. The Broussards denied the offer.



• Dr. Robert Dean, an expert on storm surge, testified that the structural damage to the plaintiffs’ home was caused by water and surge.



• He testified that the force of water was far stronger than the force of wind during Hurricane Katrina. In fact, Dr. Dean said the force of water on the Broussards' home was likely equivalent to a 520 mph wind.

The Ruling
Judge Senter issued a ruling from the bench instead of asking the jury to decide the case.

Judge Senter acknowledged that the evidence was overwhelming that the storm surge was sufficient in force and duration to destroy the dwelling, or to remove the debris of the property if the home had collapsed before the storm surge. He said State Farm offered no evidence which would meet its burden of proof as to the damage caused by water and, for this reason, determined State Farm should be liable for the entire home and contents loss. Judge Senter awarded the Broussards the policy limits for the loss of their home.

Having made this decision and using this burden of proof, Judge Senter asked a jury to determine punitive damages in the case because State Farm thus “ did not have a legitimate or arguable reason under Mississippi law or the unambiguous terms of the insurance policy for refusing to pay the plaintiffs’ claims for insured proceeds.” The jury awarded punitive damages in the amount of $2.5 million.

We believe this ruling is inconsistent with the evidence presented at trial, our insurance contract and Mississippi law.  This motion and brief support State Farm’s appeal.