Judge rules Recovery School District not entitled to Katrina insurance claims

Alejandro de los Rios Jul. 8, 2010, 1:23am


Judge Kern Reese denied a motion for summary judgment filed by the Recovery School District (RSD), effectively ruling that it is not entitled to insurance proceeds owed to the Orleans Parish School Board (OPSB) for damages incurred during hurricane Katrina.

The RSD is intervening on a 2006 insurance suit filed by the OPSB in Orleans Parish Civil District Court. The RSD was established in November 2005 during a special session of the Louisiana legislature convened to deal with the devastation wrought by Katrina. The RSD was granted power to manage federal, state and local funds dedicated to the 107 schools placed under its control.

The OPSB is suing 14 defendants including Goodyear Tire & Rubber, OPSB President Phyllis Landrieu, and 11 insurance companies, over insurance claims from damages incurred during hurricane Katrina.

New Orleans attorney Shelley Provosty is representing the RSD and, citing La. R.S. 17:1900 (4)(b)(iii), argued that the legislation's mandate applied retroactively, and thus the RSD was entitled to submit claims under the OPSB's insurance policies.

New Orleans attorneys Brent Barriere, Trevor Bryan, Christy Utley and Terrell Boykin; and Metairie attorney Robert Kutcher are representing the OPSB. They argued that La. R.S. 17:1900 (4)(b)(iii)'s mandate is prospective only.

The law at issue, reads in part: "[T]he school district, though its administering agency, shall be the exclusive authority to receive, manage, and expand any and all ...insurance proceeds attributable to damage done to any property."

In his 10-page ruling, Reese stated, "In the absence of contrary legislative expression, substantive laws apply prospectively only."

He also wrote, "No statute is retroactive unless it is expressly stated."

Reese noted that while the RSD asserts "that an implied retroactive application is necessary given the history of legislation," he "finds two problems with this line of argument" including that the RSD did not control many of the schools until after Katrina.

"If the transfer occurred in November, it would appear that the retroactivity of the law is irrelevant," Reese wrote.

Later on, he said that he found RSD's "argument regarding assignment unpersuasive."

Orleans Parish Case 2006-07342

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