Monte Tynes · David Baria
Bad Faith Insurance Denial/Delay; $10,457,858.89 Jury Verdict
February 27, 2025 6:30 PM||
An historic family home located on the beach in Ocean Springs, MS was totally destroyed by Hurricane Katrina on August 29, 2005. USAA adjusted the loss and found minimal wind damage and attributed most of the loss to flood, an excluded peril. USAA paid nothing on contents, an insured boathouse and pier, jewelry and refrigerated goods. USAA delayed adjustment of the claim requesting floorplans, photos and a contents list despite having detailed information regarding these matters in its underwriting files.
On September 10, 2013, the Estate’s lawsuit against USAA went to trial in Jackson County, MS where a jury awarded $1,547,293.37 (policy limits - deductible, depreciation and money USAA had already paid on the claim). The trial judge had previously granted summary judgment on the extracontractual damages claims. The insured appealed the summary judgment and in 2017 the case was remanded to the trial court.
On September 19, 2022, the case was tried on the sole issue of whether USAA had an arguable basis for its claims decisions. On September 23, 2022, after seven hours of deliberations, the jury returned their verdict.
Focus Groups
Two mock trials were conducted, from which we learned that the impressions of the insureds were neutral to positive. Whereas, the impressions of USAA leaned more negative. Also, both focus groups were willing to award a significant amount of punitive damages.
Motions in Limine
There were multiple significant issues addressed by the parties through motions in limine. These include the following:
Plaintiff
1. Family patriarch Paul Minor has a criminal conviction and served time in prison, but he was not a party to this action and was not to be called as a witness. Introduction of this evidence would be more prejudicial than probative.
2. During discovery, USAA maintained that it had no written policies or procedures regarding adjusting hurricane claims. Plaintiff sought to prevent USAA from maintain at trial that it had followed its adjusting standards, or that it did not violate external adjusting standards.
Defendants
1. USAA sought to prevent Plaintiff from introducing evidence relating to delay during litigation.
2. USAA sought to exclude evidence relating industry adjusting standards and guidelines.
3. USAA sought to prevent Plaintiff from introducing evidence that USAA should have conducted an internal review of its claims handling since the 2013 jury verdict.
Voir dire
Voir dire was limited by the trial judge to 30 minutes per side. I focused on insurance industry affiliation, jurors personal experience with hurricanes and insurance claims, “conscience of the community,” and punitive damages.
Opening Statement
Opening statement was originally written approximately 1 year prior to trial in advance of the initial mock trial. The focus was enumerating the poor decisions made by USAA adjusters that lead to the denial of portions of the claim and long delays in payment of those portions actually paid.
Order of Proof
Because on remand the claim was for extracontractual damages only, the focus was on the USAA adjusters. I had no power to compel them to attend trial in Mississippi, so I took video depositions that we played in our case. I also called the corporate rep. USAA brought to trial as an adverse witness.
Defense Witnesses
USAA called its corporate rep., who did not adjust the claim, its engineer (by depo), and an adjuster (by depo).
Closing Argument
The initial portion of the closing argument focused on USAA’s bad acts and the original jury verdict in favor of Plaintiff.
Defense Closing
USAA attempted to blame its insured arguing that if they had cooperated the claim would have moved at a faster pace and certain covered losses would not have been missed by adjusters. USAA also made ridiculous evidentiary arguments patently contrary to the evidence, and attempted to convince the jury that Plaintiff’s attorneys were misleading them.
Rebuttal
I used USAA documents that I had introduced in evidence to rebut USAA evidentiary arguments and reiterated the covered losses that USAA had simply not paid. I argued that the jury would speak for Gulf Coast homeowners regarding how claims should be adjusted and that the only way to get the attention of a $41 Billion company is with a large punitive damages award. I requested an award of $16 Million to maintain a single digit multiplier of the original compensatory verdict and to keep the percentage of net worth extremely low.
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