Judge Senter’s Opinion In Broussard v. State Farm: On The Money, Somewhat Wrong Or Way Wrong?

I have been thinking about the issues of allocation of proof between the insured and the insurer since the day I read Judge Senter’s opinion in Broussard v. State Farm, and a couple things have troubled me:

1.  Everyone knows that an insurer has the burden of proving an exclusion.  But does that mean that, upon the introduction of any bit of evidence by the insured that a loss may be covered, even if the evidence is speculative, way out there or in the "Abracadabra" category, the insurer must then nail the damages down to the penny or face a directed verdict that it hasn’t proven the exclusion? Senter has said in other cases that the insured’s responsibility is to show that covered damage occurred and how much of it there was.

2.  Why couldn’t a reasonable jury weigh the evidence as to what kind of damage happened and decide? Why did Senter believe he had to direct the verdict? For example, couldn’t the jury have decided that several thousand dollars in shingle damage occurred, but that a couple hundred thousand dollars of damage was caused by a surge of water that flattened the Broussards’ home?     

In case you don’t have it handy, here is a pdf of Senter’s opinion.

I was reading an article my friend Randy Maniloff wrote for National Underwriter’s FC&S publication on Broussard.  It came out yesterday, and here is a pdf of the article.  It’s very good and written with the usual attention to detail and skill you expect from Randy.  In the article, Randy says the Broussard opinion is a lot of hat and very little cattle when it comes to the law.  I have to agree.  As Randy has pointed out before, Senter’s opinion relied on one case, Lunday v. Lintz, which is not an especially strong case or an intellectual discourse on the allocation issue. Randy also brought up the State Farm appellate briefing on allocation in the Tuepker v. State Farm case, another Katrina case in Senter’s court.  That briefing relied on some stuff about burdens shifting back and forth, and I found myself swaying in my chair, I didn’t really like it.  I don’t think there are any shifting burdens. It’s simpler to say it the way I said it in the questions above.  This issue of the insurer having to prove exclusions gets distorted, and people lose sight of the fact that the insured has to establish damages in the first place, they can’t just dance in with a smile and a happy tune, they have to show something real.  

Randy also points out that Senter has never cited what Mississippi caselaw supports the imposition of punitive damages on State Farm. This is true, and it is potentially a troubling development to hold an insurer liable for bad faith for its failure to pay a claim after a lawsuit is filed against it.  As I understand Senter’s opinion, he said the lawsuit does not toll the insurer’s duty to pay, but instead the clock is ticking the whole time.  But isn’t that what a lawsuit is for, to determine whether the prior denial was in bad faith? 

3 Comments

Filed under First Party Insurance

3 Responses to Judge Senter’s Opinion In Broussard v. State Farm: On The Money, Somewhat Wrong Or Way Wrong?

  1. “Senter Ring: Looking Beyond The Side Show Of The Mississippi Katrina Coverage Litigation”

    Randy Maniloff wins the award for best one-liner so far:Mr. Hood

  2. Daughter for Justice

    Why does no one mention anything about State Farm’s Wind-Water Protocol that was devised three weeks after Katrina Hit? Is it not a major factor in all these cases? All this discussion on the burden of proof makes me wonder what difference would it have made to the insured. Even if it was determined that the burden of proof would fall upon the insured. How on God’s earth could the Broussard’s prove wind loss when State Farm refused to look at or consider any evidence brought to them unless of course it was an eyewitness (Blaylock’s testimony during the Broussard trial)? Judge Senter mentioned that in his order. What course other than suing did the Broussard’s have in order to get their claim investigated? I’ve also noticed no one mentions the fact that State Farm totally ignored their first engineer’s report on the Broussard property (It concluded wind and water contributed to the loss of the property and gave estimated percentages of the loss). State Farm threw out this report and ultimately hired another expert who came to a different conclusion. Why would they do that?

  3. Whether the protocol was flawed does not directly address the legal question of what the allocation of proof is. That’s why no one is talking about in connection with burden of proof, which is a legal issue that is present in all insurance litigation including lawsuits where the State Farm protocols are not at issue.
    How could the Broussards prove it? They presented testimony to Tim Slider that the house was destroyed by a tornado. They had pictures of the debris taken some weeks after the destruction by their daughter. They could present evidence on the rubble pattern, the timing of the wind and the timing of the water surge. To my mind, a jury could choose to believe that testimony or not. I’d have to have you show me the testimony you are talking about. As I understand it, the State Farm expert from the University of Florida, not Blaylock, provided testimony that there was a certain percentage chance that a certain percentage of the Broussards’ roof was damaged by wind. From that evidence, couldn’t a jury choose to believe no wind damage occurred, or that $2,000 worth of wind damage occurred, or that $50,000 of wind damage occurred?
    No one says the Broussards did not have the right to sue or that they should not have sued. They are only one of thousands of claimants, and the concern is with what legal rules are established, because these affect many, many people for many, many years. How does whatever State Farm did with the engineer’s report reflect on whether Judge Senter picked the correct legal standard? It doesn’t. So that’s not addressed in the post or Randy’s article. Sometimes there is a fine line between politicking over a case and analyzing the soundness of its ruling. As far as analyzing the Broussard ruling, the engineer’s report and all the talk about it fall into a subsidiary category of lesser significance than whether Judge Senter got the law right.