Mississippi Court Rejects Bad Faith Katrina Damages

The Mississippi Supreme Court has upheld a breach-of-contract verdict in a dispute between an insurance company and a retired Navy admiral over coverage of damages from Hurricane Katrina.

However, the high court said Admiral James W. Lisanby and his wife failed to prove United Services Automobile Association acted in bad faith when it denied their claim.

The justices threw out $86,000 awarded by a Jackson County jury in 2008 for emotional distress and an additional $302,920 in attorneys’ fees and $211,069 in litigation expenses. The high court let stand $823,000 to the Lisanbys for wind damage to their home.

Lisanby had sued USAA for funds to repair damage to their Pascagoula beach front home, a rental cottage and garage as well as for other losses. They also asked for an unspecified amount for emotional distress.

The high court upheld Circuit Judge Billy G. Bridges’ decision not to allow the jury to consider punitive damages.

USAA lawyers had argued the company did not owe more than the roughly $45,000 it had already paid because the Lisanbys’ homeowners policy did not cover damage caused by water, even wind-driven water.

The Lisanbys said USAA failed to fully investigate the claim before denying coverage.

The Supreme Court said it would not overturn the jury’s finding on the issue of water and wind damage.

However, Justice Jim Kitchens said the court record supported none of the Lisanbys’ claims of bad faith, which led to the emotional distress judgment and attorneys fees.

Topics Mississippi