There are a lot of bitter homeowners and relieved insurance companies today. Yesterday the Louisiana Supreme Court issued its ruling in a landmark Katrina-related insurance lawsuit, and sided with the Lafayette Insurance Co.
In a unanimous 7-0 decision, the Supreme Court justices opined that New Orleans resident Joseph Scher wasn’t entitled to damages caused by flooding during Hurricane Katrina. Scher didn’t have flood insurance, but the crux of his lawsuit contended that since the water damage sustained by his apartment was caused by human error in levee construction and maintenance, Lafayette Insurance Co. was still responsible for the water damage under its hazard insurance policy. In its opinion, which reversed two previous lower court rulings, the Supreme Court wrote, “Contrary to the court of appeal’s reasoning, this definition (of ‘flood’) does not change or depend on whether the event is a natural disaster or a man-made one — in either case, a large amount of water covers an area that is usually dry.” (The full opinion and ruling is here.)
Attorney John Houghtaling, who joined the lawsuit on behalf of the state of Louisiana, told The Times-Picayune , “This is the end of the road here. This is a very, very sad day for anyone who isn’t an insurance executive.”