Boston Globe: Judge orders mediation in dozens of Katrina insurance cases

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Judge orders mediation in dozens of Katrina insurance cases

By Kunzelman, Associated Press | October 27, 2006

GULFPORT, Miss. -- Rideout braced for a grueling court battle when he

sued Allstate Insurance Co. for denying his claim after Hurricane Katrina

destroyed his home on Mississippi's Gulf Coast.

To his surprise, all it took was two hours behind closed doors for both

sides to work out their differences without a trial. Rideout said the agreement

should enable him to rebuild.

Rideout, 50, was one of the first participants in an experimental mediation

program designed to ease the crushing load of lawsuits spawned by last year's

epic storm, which damaged or destroyed more than 250,000 homes in Louisiana

and Mississippi.

With hundreds of Katrina lawsuits clogging his docket, U S District Judge

L.T. Senter Jr. has ordered several dozen plaintiffs and their insurers to sit

down with a mediator and try to resolve their differences, or face

" appropriate sanctions. "

Settlements were reached in seven of the first 17 cases to go to mediation,

including Rideout's two weeks ago. Encouraged by those results, Senter last

week ordered mediation for 57 more cases.

Senter, who presided over the first trial of a Katrina insurance claim,

sided with insurance companies in that case when he ruled in August that

standard

homeowner's policies cover damage from wind but not rising water. Insurers

have refused to pay for billions of dollars in damage from Katrina's

wind-driven storm surge.

The next batch of trials is scheduled to start early next year, with several

judges from other districts joining Senter in presiding over the cases.

Chip Merlin, whose Tampa -based Merlin Law Group has had more than two-dozen

Katrina cases ordered into mediation, said the process could only help his

clients get the money they deserve.

" Our clients want to get on with their lives, " Merlin said. " They don't want

this to drag out. "

Other lawyers are not as supportive. " Dickie " Scruggs, whose legal

team is suing insurers on behalf of hundreds of policyholders, has urged

Senter to try cases in groups instead of individually. Mediation " has no teeth

in

it, " he added.

" If they were going to pay these claims, " Scruggs said of insurers, " they

would have done it already. "

Many homeowners who are locked in disputes with their insurers but have not

sued have agreed to mediation through a program sponsored by Mississippi's

insurance commissioner. As of Oct. 16, 82 percent of those voluntary 3,372

mediation cases have resulted in settlements, according to the commissioner's

office.

An Allstate spokesman said mediation is " less adversarial, time-consuming,

and costly than litigation. "

Rideout said he is grateful for the chance to move on with his life. " It was

less emotional than I expected, " he said of the negotiations, which were

held at a federal courthouse in Gulfport. " It was strictly dollars and cents. "

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