Skadden Wins Fifth Circuit Ruling for State Farm in Katrina Dispute
By Andrew Longstreth
October 15, 2009
When Barack Obama made his first visit as president to New Orleans on Thursday, there were plenty of reminders of the havoc created by Hurricane Katrina. We, too, were recently reminded of Katrina's lasting impact, when the Fifth Circuit last week affirmed a lower court's decision tossing out a homeowner's suit against State Farm.Plaintiff Christopher Wiley of Biloxi, Miss., lost his home in the August 2005 storm. Although he had a policy with State Farm, the insurance company rejected his claim, taking the position that his policy didn't cover water damage. In 2006, Wiley received $80,235 through a mediation program with the Mississippi Department of Insurance, and in exchange, he released State Farm from damage claims. Later, under an agreement with the state insurance department, State Farm agreed to reevaluate Wiley's claims, and in 2007 offered him an extra $26,798.13 for an additional release. Wiley rejected that offer. He came to believe that wind had caused part of the damage to his home, and sued State Farm for breach of contract and tortious breach of contract.
State Farm's attorneys at Skadden, Arps, Slate, Meagher & Flom convinced the court in the Southern District of Mississippi to grant their motion for summary judgment, arguing that Wiley’s claims were barred by the release he gave State Farm in 2006. The Fifth Circuit affirmed. Because the 2006 mediation process was used to resolve hundreds of Katrina insurance claims, this decision could be significant.
Joe Owen of Owen, Galloway & Myers, an attorney for Wiley, did not return our call for comment.
State Farm was represented by Skadden attorneys Sheila Birnbaum, Douglas Dunham, and Ellen Quackenbos.
