Matthew Pearson says he was worried when the jury returned a verdict in Jaw the Pointe v. Lexington Insurance Co. after only two hours.

“I prepared my client for bad news,” he says.

But Pearson, a partner in Galveston’s Gravely & Pearson, need not have issued his warning.

On April 28, his client Jaw the Pointe — a limited liability company that owns an apartment complex known as the Pointe — won what Pearson believes is the first Galveston plaintiff’s verdict in a residential property owner’s Hurricane Ike-related suit against an insurer. Hurricane Ike hit the Texas coast on Sept. 13, 2008, severely damaging many Galveston residential properties.

In an amended petition filed on March 19, 2010, Jaw the Pointe alleged that its apartment complex was severely damaged on Sept. 13, 2008, and Sept. 14, 2008, but Lexington, one of several companies that provided Jaw the Pointe with storm coverage, violated the Texas Deceptive Trade Practices Act and the Texas Insurance Code when it delayed and denied full coverage.

In an amended answer filed Jan. 28, Lexington denied the allegations and alleged Jaw the Pointe’s claims were excluded under the policy.

Robert Siegel, a partner in New Orleans’ Gieger Laborde & Laperouse who represents Lexington, did not return a telephone call seeking comment.

After a nine-day trial, a 10-2 jury in the 56th District Court returned a $3.96 million verdict against Boston-based Lexington, deciding that the insurer had engaged in unfair or deceptive practices by failing “to effectuate a prompt, fair and equitable settlement” of the apartment complex owner’s claim; failing to provide a reasonable explanation for its denial of the claim; and failing to affirm or deny coverage in “a reasonable time,” according to the verdict form.

The jury awarded Jaw the Pointe $1.2 million to fix or replace the damaged property; $30,000 for expenses other than attorneys’ fees; $2.5 million in damages for the defendant “knowingly” engaging in unfair or deceptive trade practices; and $170,000 in attorney’s fees with another $60,000 set aside if appeals reach the Texas Supreme Court.

Pearson says his client’s apartment complex consisted of 168 units in 13 buildings. During Hurricane Ike, wind and three feet of flood water damaged the structures, he says. Four months after the storm, Jaw the Pointe learned that more than 50 percent of the structures were damaged, triggering a Galveston building ordinance that required his client to raze all of the buildings to meet flood guidelines, Pearson says.

Because Jaw the Pointe was the first Galveston win for an insured suing over Hurricane Ike residential property damage, Pearson says, the trial drew a crowd, but he wasn’t nervous. “When the crowd is standing behind you, you don’t notice it,” he says.

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