Supreme Court to decide statute of limitations in Katrina litigation

Steve Korris Nov. 15, 2010, 9:30am


NEW ORLEANS – Thousands of Hurricane Katrina suits against insurers hang in suspense as the Supreme Court of Louisiana decides how to apply a statute of limitations.

Louisiana Citizens Coastal Plan, an insurer the Legislature created, wants to reverse appeals judges who ruled that class actions stopped the clock on individual claims.

Fourth Circuit judges in New Orleans stretched the statute and reversed Orleans Parish District Judge Michael Bagneris, who dismissed a suit against Coastal Plan.

About 1,250 claims came in after deadline, Jack Culotta of Metairie wrote in Coastal Plan's brief to the Court.

He wrote that potentially 2,000 more suits awaited a decision.

At oral argument on Oct. 20, he said, "If it doesn't end today when will it end, if ever?"

For plaintiffs Sherry Taranto, Dean Coleman and William Coleman, John Denenea Jr. of New Orleans told the Justices no one wants Katrina litigation to go on forever.

He said it's winding down.

Justice John Weimer asked if suits were waiting to see what happened.

Denenea said he heard it anecdotally.

He said there weren't a lot of new cases waiting.

He said that if not for Coastal Plan's obstruction, many would have been resolved.

In rebuttal, Culotta said hundreds of cases were filed in the last 60 days.

"He has hundreds more," Culotta said.

His brief warned that a ruling against Coastal Plan would result in assessments on private insurers and surcharges on premiums across the state.

In a brief for business groups as friends of the court, Wayne Fontana of New Orleans predicted that it would drive a stake into the recovery.

"Louisiana Citizens is precisely that, the citizens of Louisiana," he wrote.

"The burden of funding Citizens truly falls on the backs of all Louisiana residents," he wrote.

He represents Louisiana Association of Business and Industry, self insured employers, auto dealers, restaurant owners, insurance agents and brokers, New Orleans hotel owners and Morial Convention Center.

"Louisiana's insurance market clearly stands to suffer renewed economic pressures and continued worsening of the crisis which presently exists," Fontana wrote.

If the ruling stands, he wrote, "insurers will not have a prayer of accurately assessing their risks and setting appropriate premiums."

"How can they if we still do not have a final price tag for Katrina and don't know when we will?" he wrote.

Another friend of the court, National Association of Mutual Insurance Companies, predicted devastating effects on state citizens.

Adrianne Baumgartner of New Orleans wrote that the longer a policyholder has to sue, the greater reserves an insurer must maintain.

In turn, she wrote, the greater premiums an insurer must collect.

Another friend, Lafayette Insurance, reported facing 90 late

"Indefinite extensions would constitute an unconstitutional impairment of these contracts," Howard Kaplan of Metairie wrote for Lafayette.

For American Insurance Association and National Association of Mutual Insurance Companies, Ralph Hubbard of New Orleans wrote, "By all accounts the market has improved and is stabilizing."

American National Property and Casualty Company, Louisiana Farm Bureau Mutual, and Allstate all submitted friendly briefs for Coastal Plan.

A friend on the other side, Sidney Torres of Chalmette, wrote that he represents 2,720 persons whose suits would be prescribed if the Justices reverse the Fourth Circuit.

Jennifer Eagan of New Orleans, author of a friendly brief for Louisiana Association for Justice, tried to crash oral argument.

Eagan, who represents Vanessa and Ramon Reece in a suit against Allstate, jumped to the podium after Culotta's rebuttal and asked for time that remained.

She said the Justices denied her oral argument in the Reece case.

Acting Chief Justice Bernette Johnson asked if she had the same

Eagan said yes, and Johnson said she could have five minutes.

Three men in seats along a rail behind the podium jumped to their feet.

Murmurs arose and heads swiveled.

Johnson said her colleagues felt the request should be denied.

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