Negotiations between Louisiana Citizens Property Insurance Corp. and plaintiffs' attorneys over more than $100 million are off to a rocky start following a U.S. Supreme Court decision to not delay the execution of the class-action judgment against the last-resort insurer.
According to Citizens CEO Richard Robertson, the state-run insurer and plaintiffs' attorneys continue to meet in an attempt to resolve the litigation with a class of more than 18,000 policyholders who say the last-resort insurer failed to start the claims-adjusting process within the time frame set by law following Hurricanes Katrina and Rita in 2005.
The state Supreme Court reinstated what is now a judgment of more than $100 million against Citizens, paving the way for the Citizens' policyholders to collect $5,000 each. However, the amount of people eligible to join the class could rise.
Citizens asked the U.S. Supreme Court to delay the execution of that judgment while the last-resort insurer prepares an application for the high court to hear the case, but the court rejected the request, prompting Citizens to seek a settlement with plaintiffs' attorneys.
Citizens presented an $80 million offer to settle the case. Attorneys representing the class of plaintiffs countered with an offer of $123 million to be paid in three installments.
Wiley Beevers, who serves as class counsel, says Insurance Commissioner Jim Donelon has “made a public spectacle of the so-called 'offer' of $80 million, but he and the Citizens' board fail to understand that we have a judgment for $104 million plus $10,000 per day in interest until the funds are paid.”
Donelon, meanwhile, says the state has “several arrows left in our quiver,” noting that Citizens can still make a case for a rehearing before the state Supreme Court, appeal to the U.S. Supreme Court, pass a legislative fix or negotiate the award.
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