Summary judgment hearing in case against Morgan Stanley reset

Alejandro de los Rios Jan. 24, 2011, 1:54pm

A summary judgment hearing set for Jan. 21 in a lawsuit against Morgan Stanley Dean Witter Investment Management Inc. of New York has been reset to Jan. 28 in Orleans Parish Civil District Court.

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 costing the plaintiffs billions of dollars in claims.

New Orleans attorneys Gladstone Jones III and Lynn Swanson filed the original petition for damages in May 2009. New Orleans attorneys Edward Wegmann, Patrick Vance and Mark Mintz are representing Morgan Stanley and PPF.

Judge Herbert Cade is overseeing the case. The plaintiff's motion for summary judgment asks the judge to order the defendants to pay indemnity, as allegedly required under 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 original petition alleges the plaintiffs formed Safeguard Storage Properties in May 2005 in New Orleans with PPF, with Morgan Stanley acting as its owner and manager. According to the suit, when Katrina struck, 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.

Four supplemental petitions filed by the plaintiffs have been dismissed on prematurity due to the fact that the plaintiff's Katrina litigation is ongoing and it as yet determined what their damages really are. The plaintiffs appealed one of the dismissals, but Cade's ruling was upheld by the 4th Circuit Court of Appeals.

The defense filed a counter-claim against the plaintiffs in September, with arguments also taking place on Jan. 28. The counter claim seeks to recover damages the defendants incurred when Cade "wrongfully" 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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Organizations in this Story

Morgan Stanley
1585 Broadway, New York, NY 10036, United States
New York, NY 10036

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