The Firm . Slate of post-Ike ‘slab’ litigation settled

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Slate of post-Ike ‘slab’ litigation settled

Texas Windstorm Insurance Association has agreed to settle a raft of lawsuits by paying almost $190 million to some 2,400 Galveston County property owners whose insured homes were reduced to their foundations by Hurricane Ike.

The suits are known as “slab” cases because they all involve properties where Hurricane Ike left little or nothing standing above ground when it made landfall Sept. 13, 2008.

The policy-holding property owners are suing the insurance association for $189 million in Judge Susan Criss’ 212th District Court.

They are divided into two groups of about 1,200 homeowners each.

The first group consists of plaintiffs individually represented by counsel, of which 517 have filed suit. The second group consists of homeowners who have joined in a class-action lawsuit.

One application in the class-action lawsuit was filed on behalf of 206 Bolivar Peninsula homeowners by area attorneys Tony Buzbee and Darrell Apffel in January. It joined lawsuits challenging the windstorm association’s offer of 11.2 percent of the value of each lost house.

The association based that figure on its assessments of how much damage had been caused by flooding during the storm, a figure hotly disputed in court by the plaintiffs’ attorneys.

The cases went to mediation, where lawyers for both sides and mediator Todd Hunter spent six days negotiating the new deal.

Under the terms of the negotiated settlement, the property owners will be offered higher settlement figures, plus their attorneys’ fees, in confidential transactions.

For property owners who sued individually, acceptance of their individual offers will end their cases. Class-action plaintiffs must wait until Criss considers the association’s offer in court, which could take another month or so, state Rep. Craig Eiland, one of the attorneys involved, said.

Criss said: “We have had more than 100 lawyers, many of them among the state’s leading trial lawyers, involved in the mediation and, if they all think this is a good resolution, I’m not going to throw it out. It’s $189 million for the county, and that’s good for everyone.”

Eiland said: “The association is making the same offer for all the plaintiffs, whether individual or class-action. The offer is calculated based on the value of each property, payments already made or agreed to by the National Flood Insurance Program and policy limits.

“I have some individual and some class-action clients. I will be sending the individual plaintiffs’ offers to them in the next day or two.”

In a statement issued by Mostyn Law Firm’s Houston office, plaintiffs’ attorney Steve Mostyn, who serves as the liaison counsel to the court for all Hurricane-Ike cases filed in Galveston, said: “We are pleased that TWIA stepped up to the plate and resolved these cases so that these folks may now get on with their lives.”

Another of the class counsel, Mitchell Toups, of Beaumont, said: “This is a triumph for ‘slab’ owners and the Galveston County economy.”

The windstorm association’s general manager, Jim Oliver, said: “These slab claims were very complicated and numerous, and they required a great deal of time and analysis in determining the impact from wind and storm surge damage since TWIA policies only cover direct loss caused by wind.

“TWIA needs to receive information on the amount of reductions due to flood insurance payments before determining what amount is to be offered in each individual case.”

Altogether, the association, the largest property insurer in Galveston County and the Texas coast’s insurer of last resort for windstorm and hail coverage, received more than 100,000 claims, costing $2.1 billion, for damage caused by hurricanes Dolly and Ike in 2008.

 

Ian White
Galveston Daily News
July 15, 2010