Plaintiffs press on despite multiple setbacks in suit against Morgan Stanley
Plaintiff lawyers have not backed down from an Orleans Parish Civil District Court lawsuit against Morgan Stanley Dean Witter Investment Management Inc. of New York, despite exceptions granted to the defense.
BCR Safeguard Holdings LLC of Georgia, JAC Safeguard Holdings LLC of Louisiana, and Safeguard Development Group II LLC of New Orleans are suing Morgan Stanley and PPF Safeguard of Georgia for allegedly misrepresenting the plaintiffs in Hurricane Katrina insurance claims and allegedly costing the plaintiffs billions of dollars.
New Orleans attorneys Gladstone Jones III and Lynn Swanson filed the original petition for damages in May 2009.
Orleans Parish Judge Herbert Cade will hear arguments in a plaintiff motion for summary judgment Jan. 21.
The summary judgment motion alleges that after the plaintiffs, along with defendant PPF – with Morgan Stanley acting as its owner and manager – formed Safeguard Storage Properties in May 2005 in New Orleans, Katrina struck the city as Safeguard Storage had $100 million worth of construction pending.
The suit alleges that Morgan Stanley acted as a partner and conspired to deny the plaintiffs billions of dollars in insurance claims by telling the plaintiffs to settle for just $3 million. It also alleges that Morgan Stanley risk manager Bruce Plummer inappropriately disclosed confidential plaintiff litigation strategy to their insurers in 2007.
An earlier report on this case by The Recordmistakenly stated that Morgan Stanley later fired Plummer. The report should have stated that the plaintiffs only alleged that Plummer was fired.
Morgan Stanley and Plummer have strenuously denied all of plaintiffs' allegations of wrongful conduct.
Morgan Stanley and Plummer specifically deny they disclosed confidential information to anyone and specifically deny that Plummer's subsequent departure from Morgan Stanley was in any way related to plaintiffs' allegations.
New Orleans attorneys Edward Wegmann, Patrick Vance and Mark Mintz are representing Morgan Stanley and PPF.
The plaintiffs have filed four supplemental and amended petitions since initiating the suit. The third petition was dismissed as premature after the defendants filed a motion for exception on the grounds that the plaintiffs are currently in hurricane litigation against their insurers and their claims against the defendants in this case are contingent on the insurance suit's outcome.
Plaintiffs appealed to the 4th Circuit Court of Appeals, but the court upheld Cade's ruling in September. The appellate court ruling stated that the plaintiffs' "claims make clear that any alleged harm for which they seek to recover has not yet occurred."
Cade also found that the fourth amended petition contains no new claims or contested issue of material facts and dismissed it on prematurity.
The Jan. 21 hearing will go over the plaintiff motion for summary judgment in which they seek indemnity payments from the defendants. The plaintiffs claim the defendants are tied to an indemnity obligation in their contract with Safeguard.
Citing the contract, the plaintiffs claim that they "are entitled to indemnification of 'any losses, claims, costs [and] expenses' incurred 'in connection with any matter arising out of or incidental to any act performed or omitted to be perform by any such Indemnified Party in connection with this agreement or the Company's business or affairs.'"
The defense filed a counter-claim against the plaintiffs in September, with arguments also set to take place on Jan. 21. The counter claim seeks to recover damages the defendants incurred when Cade issued a temporary restraining order against the defendants in 2009, which was later overturned by the 4th Circuit.
Orleans Parish Case 2009-04705
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