Citizens Property funds delivered
After seven years, dozens of legal maneuvers and rulings by both the Supreme Courts of Louisiana and the United States, the plaintiffs in a class-action lawsuit against Louisiana Citizens Property Insurance Corp. have the $104 million judgment.
On Friday, the state 1st Circuit Court of Appeal denied Citizens’ request to prevent its bank, Regions Bank, from handing over the money to the Jefferson Parish Sheriff’s Office. On Monday, the state Supreme Court denied Citizens’ request to overturn the appellate court decision.
On Monday afternoon, Regions delivered the money to the Sheriff’s Office.
Attorneys for the 18,573 Citizens policyholders say a court-approved distribution plan should be in place by mid-September and the checks distributed within three to six months.
Citizens policyholders sued in 2005 claiming the state-backed property insurer of last resort took too long to begin adjusting claims after hurricanes Katrina and Rita. In 2009, a Jefferson Parish state district court ruled that Citizens had to pay the maximum penalty, $5,000, to each of the policyholders affected.
“It’s actually not over, just this phase of it,” plaintiff Attorney Fred Herman said Monday. “We have many more thousands of claims in the pipeline.”
Altogether as many as 40,000 Citizens policyholders had their 2005 hurricane claims mishandled and a substantial number of them could qualify for the penalty, Herman said.
The second phase of the class action may have even more people in it than the first, he said.
Earlier estimates of the second set of class-action plaintiffs put the maximum number at around 7,500 people.
The plaintiff attorneys expect to file the second round of claims by September.
Herman said he does not expect the next round of litigation to last as long as the first since a legal framework has been established.
However, Herman said he does expect Citizens to continue the legal battle using whatever “ill-fated” legal strategies the insurer can come up with.
Citizens Chief Executive Officer Richard Robertson said the insurer has not decided how it will handle the second portion of the class-action lawsuit.
Having paid out the $104 million judgment, Robertson said Citizens still has enough money on hand to pay its claims for now without levying an assessment against property insurance companies, and their policyholders.
The situation could change if the state gets hit by a hurricane and the hurricane is large, he said.
Insurance Commissioner Jim Donelon has said Citizens won’t have to levy an additional assessment as long any storms do less damage than Hurricane Rita.