News



Baby Crib Recall Results from SmithPhillips Product Liability Case

December 04, 2009

December 2009: Today’s U. S. Consumer Products Safety Commission recall of Italian-made LaJobi baby cribs (click here for CPSC Notice) was a direct result of the SmithPhillips case, Stephens v. LaJobi. This product liability case arose from the tragic death of a Mississippi infant whose neck and head became entrapped in the headboard cutout of a LaJobi baby crib.  The family of the infant was represented in the wrongful death case by SmithPhillips attorneys Briggs Smith and Jason Nabors.

As part of the settlement of the case, the family of the child and their SmithPhillips attorneys demanded the Defendant manufacturer cooperate in securing a nationwide recall through CPSC.  On December 2, 2009, the Consumer Products Safety Commission announced the recall notifying consumers nationwide to stop using the cribs immediately and contact LaJobi to receive replacement end panels which eliminate the hazard.

"The death of this young child was a terrible tragedy.  One of the primary concerns of her family was that others not suffer the same fate.  This CPSC recall is an important part of resolution of the case.  It insures others are spared the suffering this family has undergone," said Smith Phillips partner Briggs Smith.

RECALLED BABY CRIBS

MOLLY                                                    BETSY

      

Mississippi Supreme Court Rules in Nationally-Watched Anti-Concurrent Cause Case

October 08, 2009

CORBAN v. USAA

Katrina Homeowners Insurance Litigation:

Mississippi Supreme Court rejects Fifth Circuit Tuepker/Leonard Katrina AntiConcurrent Cause Clause Interpretation

October 8, 2009

See Full Opinion:

http://www.mssc.state.ms.us/Images/Opinions/CO58302.pdf

The recent Corban opinion by a unanimous Mississippi Supreme clears up a question of tremendous importance to homeowners across the country. More and more people live in coastal and other areas subject to catastrophes such as hurricanes or earthquakes. Homeowners can depend on their contracts of insurance only if the courts are willing to enforce those contracts. The Corban case has been watched by courts and legal scholars throughout the nation. Today, the Mississippi Supreme Court rejected the Fifth Circuit "Erie guesses" of the Tuepker and Leonard opinions regarding the Anti-Concurrent Cause (ACC) clause. Today’s opinion says homeowners "all risk" policies mean exactly what policyholders across the Gulf Coast, as well as legal scholars across the country, have said from day one: (1) Concurrent means concurrent, i.e. at the same time, and (2) In "all risk" policies like those sold today, it is the insurance company’s burden to prove what part of the loss was caused by an excluded peril (water in the case of a hurricane). The ACC clause does not relieve an insurance company of its obligation to establish causation if it seeks to exclude coverage for part of the loss caused by water. (The four-year Katrina ACC odyssey is covered in the below post from earlier this year.)

Attorneys for Dr. and Mrs. Magruder Corban (from left to right):  Buddy Gunn, Judy Guice, Richard (Flip) Phillips, and Christopher Van Cleave.

The Corban victory is "bittersweet" because thousands of Gulf Coast residents whose homes were destroyed by Katrina have been forced by economic circumstances to settle their insurance claims over the past four years under an erroneous interpretation of the law. Thousands of honest, hard-working homeowners, who prudently purchased all risk homeowners policies, have settled their claims for fractions of the amounts due under the contracts of insurance. This opinion is of tremendous importance, however, to victims of future disasters both in Mississippi and throughout the nation. The opinion by a unanimous, 9-0, court is based on solid precedent and application of long established rules of insurance contract construction that apply in every state. It is impossible to overstate the significance of today’s opinion by the Mississippi Supreme Court.

CORBAN v. USAA: NATION AWAITS RULING ON ACC (Anti-Concurrent Cause Clause) ODYSSEY

[Posted August 2009]

Legal scholars, insurance companies, and homeowners throughout the nation await the ruling on one of the most-watched State Court Oral Arguments in the U.S. – the June 9, 2009, en banc argument of Corban v. USAA before the Mississippi Supreme Court.  See "Hot Supreme Court Case," Mississippi Bar News, July 21, 2009. At issue in Corban is the Anti-Concurrent Cause (ACC) Clause which the insurance industry used to deny coverage to thousands of Gulf Coast homeowners following the 2005 Katrina catastrophe.

Gulf Coast attorneys Judy Guice and Buddy Gunn and SmithPhillips partner Richard (Flip) Phillips represented Dr. and Mrs. Magruder Corban, whose home, like those of thousands of other Coast residents, was destroyed by a combination of wind and water in the storm. The case carries significant consequences for insured victims of future catastrophes throughout the nation. Appearing as Amici Curiae in the case were the American Insurance Association, the National Association of Mutual Insurance Companies, State Farm Fire and Casualty Company, Allstate Property and Casualty Ins. Co., National Mutual Fire and Nationwide Property and Casualty Ins. Co., as well as United Policyholders and the Mississippi Attorney General.

The Katrina ACC nightmare began for the Corbans and thousands of Gulf Coast residents when they returned to the Mississippi Gulf Coast after Katrina to find their homes destroyed by a combination of wind and water. Using the ACC clause, State Farm, Nationwide and other insurers denied homeowners’ claims under all-perils policies when water (storm surge) acted "concurrently or in any sequence with" wind to cause the damage. The Federal Courts backed the insurance companies’ effort in Leonard v. Nationwide, 499 F.3d 419 (5th Cir. 2007).

SmithPhillips initially challenged the effort to deny coverage seeking class certification on behalf of some 2,000 homeowners whose homes were reduced to slabs. See NATIONAL LAW JOURNAL, Jan. 23, 2006: Katrina’s Second Wave: Class Action against Insurer, Guice v. State Farm Fire and Casualty Co., 1:06cv1-LTS (S.D. Miss.).  The lower Court denied class certification in Guice, however, and the Fifth Circuit Court of Appeals denied the request for an interlocutory appeal.  The Guice case, which sought actual and punitive damages for post-Katrina modification of the ACC "wind-water protocol," subsequently settled prior to depositions of home office personnel involved in the post-Katrina "editing" of State Farm’s ACC procedure.

The Fifth Circuit’s Leonard (mis)application of the ACC clause was roundly criticized by legal scholars throughout the nation. Thousands of Mississippi homeowners, however, could no longer afford to make payments on destroyed homes while trying to rebuild their lives. They were forced, as a practical matter, to settle claims through "mediation" or otherwise for a fraction of what should have been paid had the ACC clause been applied to the hurricane "wind-water" conundrum appropriately.

Finally, in the case of Dr. and Mrs. Magruder Corban, the Mississippi Supreme Court was afforded the opportunity to address the ACC issue. Jurisdiction in Corban, unlike the vast majority of Katrina cases, was in state rather than federal court.  Addressing cross-motions for summary judgment, the lower court reluctantly followed the Fifth Circuit "Erie-guesses" in Leonard v. Nationwide and Tuepker v. State Farm.  "Pursuant to Leonard and Tuepker," the Court stated, "the ACC clause will be applied [and] the Corbans may not recover for any damage caused by . . . . a combination of water and wind."

The Guice/Gunn/SmithPhillips team re-assembled to address the issue.  A Petition for Interlocutory Appeal was filed with the Mississippi Supreme Court and on May 16, 2008, the Supreme Court granted the Corbans’ Petition.  The ACC issue was briefed by the parties and by Amici from throughout the nation.  On June 9, 2009, the case was argued before the Mississippi Supreme Court en banc in the new Supreme Court building in Jackson, Mississippi.

At Oral Argument, the Court zeroed in on the application of the ACC discussed by the Fifth Circuit in Leonard and Tuepker.  Granted authority to argue for Amici, Nationwide’s attorney explained precisely how the insurance company interpreted the "in sequence" language of the ACC clause with regard to Katrina hurricane damage.  Given the example of a home that is first 95 percent destroyed by wind, and then subsequently washed away by storm surge, the insurance company’s response was it owed nothing under the ACC:

"JUSTICE: I’m giving you – the example is 95 percent of the home is destroyed, the flood comes in and gets the other five percent, and you know that. Does your interpretation of the word ‘sequence’ mean you pay zero?

 COUNSEL FOR NATIONWIDE: Yes, your Honor."

It is too late, as a practical matter, for thousands of victims of Katrina who were denied the recovery to which they were entitled by misapplication of the ACC clause by the insurance companies adjusting Katrina claims. The claims of thousands of Mississippi policyholders were assigned to one federal judge who was instructed by the Fifth Circuit to apply the ACC clause as interpreted in Leonard and Tuepker.  Thousands of other financially-strapped homeowners settled their claims in Department of Insurance mediation in which the claims were "negotiated" by insurers from an erroneous ACC position. The post-Katrina handling of the insurance catastrophe in the federal system may eventually come under the same scrutiny as did FEMA’s handling of the natural disaster.

The Mississippi Supreme Court, however, in the widely-watched Corban case, has the opportunity to set forth the correct interpretation of the Anti-Concurrent Cause clause.  The case is important to homeowners throughout America.  Katrina-type catastrophes will occur again – indeed, with increasing frequency as populations continue to increase in coastal and disaster-prone areas.  Hopefully, the Mississippi Court’s ruling in Corban v. USAA will restore the application of long-established rules of contract law to policies of homeowners’ insurance for the protection of prudent homeowners in the future.  We will keep you posted here at SmithPhillips.com.

A copy of the Appellant’s Reply Brief, discussing the appropriate application of the Anti-Concurrent Cause clause, filed on behalf of Dr. and Mrs. Corban is posted here.  For more information on the issue see: Rossmiller, David P., Interpretation and Enforcement of Anti-Concurrent Policy Language in Hurricane Katrina Cases and Beyond, New Appleman on Insurance:  Current Critical Issues in Insurance Law (2007), available at http://www.insurancecoverageblog.com/Appleman's%20Anti-Concurrent%20Cause%20Article.pdf; and Lavitt, Joseph, The Doctrine of Efficient Proximate Cause, the Katrina Disaster, Prosser's Folly, and the Third Restatement of Torts:  Cracking the Conundrum, 54 Loyola L. Rev. 1 (2008).  A transcript of the entire Corban argument can be found here.  The Oral Argument is available on video at http://lawwin2k3.mc.edu/videoarchive/video.asp?dn=2008-IA-00645 SCT .    

Overloaded Trucks: Jury Awards $30 Million for Catastrophic Injury

July 26, 2009

August 14, 2009: A Desoto County Mississippi jury returned a $30 Million verdict today for SmithPhillips client Ethan Bryant and his parents, Carey Bryant and Kateri Bryant, as a result of catastrophic injuries suffered in a 2006 collision caused by an overweight gravel truck. Ethan Bryant, sixteen years old at the time of the collision, was catastrophically injured when a gravel truck, overloaded by more than twenty thousand pounds, was unable to stop for a red light.

Proof at the trial established that the driver, hauling for APAC-Tennessee, had hauled at least fifteen overweight loads through Desoto County, all exceeding legal limits by 16,000 pounds or more, during the days prior to the tragic collision. APAC denied liability, claiming the driver was an Independent Contractor in spite of the control it exercised over the driver.

Ethan Bryant, now 19, remained in a coma for eight months. He suffered quadriplegia and episodic seizure disorders which require him to have twenty four hour a day assistance and supervision. Testimony from medical and life care experts established anticipated future medical expenses of over seven million dollars throughout his lifetime.

The Desoto County jury found APAC-Tennessee negligent in failing to properly supervise its driver and accepting overweight loads. It also found the company that loaded the truck, Memphis Stone and Gravel, negligent in allowing the truck to be overloaded. Fault was allocated by the jury 70% to Defendant APAC-Tennessee, 20% to Memphis Stone and Gravel, and 10% to the Defendant Driver.

The Bryant family was represented at trial by Robert R. Morris III of the SmithPhillips Batesville office, who heads up commercial trucking litigation at the firm, and Paul R. Scott, senior partner at the Hernando office. Bryant v. APAC-Tennessee, Memphis Stone and Gravel, et al.

Investment Fraud Case Certified

August 19, 2007

The United States District Court for the Northern District of Mississippi, in SPMS&N class action, Roberts, et al v. First Financial Planners, Inc., et al, 1:05cv38-D-D, N.D. Miss., has certified a class of investors who participated in an Insured Money Management Program (“IMMP”) marketed nationwide by IGIC Management Company and Bernard L. Koyen.  The Court approved an initial settlement as to two of six defendants and allowed the case to proceed as to the remaining defendants. The suit, filed by Smith Phillips on behalf of investors who purchased the IMMP through First Financial Planners of St. Louis, Missouri, sought contract damages from First Financial Planners, Inc., FFP Securities, Inc., and FFP Advisory Services, Inc., plus actual and punitive damages for alleged tortious conduct, including civil conspiracy and aiding and abetting fraud, by defendants IGIC, Koyen, and Dorinco Reinsurance Company. For additional information on the Class Action Settlement, visit the Settlement Website at www.firstfinancialsettlement.com.

SPMS&N class members received an initial recovery in late 2006, when the Federal Court approved the Partial Class Action Settlement as to defendants First Financial Planners, Inc. and FFP Securities, Inc. On August 14, 2007, a Motion for Rule 23 Class Certification was filed as to the remaining defendants FFP Advisory, IGIC, Koyen and Dornico. Dorinco Reinsurance is a subsidiary of Dow Chemical Company. See www.dorinco.com and www.dow.com.

Two More Class Action Victories

July 26, 2006

Smith Phillips nationwide class actions completed include one on behalf of purchasers of health insurance through Group Associations, and another on behalf of holders of interest sensitive life insurance.

Golebiowski v. Mega Life, National Association for the Self Employed, et al. sought relief on behalf of a nationwide class of Plaintiffs who were sold policies of health insurance through so-called "group associations." The Golebiowski case was transferred by the Judicial Panel on Multi District Litigation to the United States District Court for the Northern District of Texas as part of the In re UICI "Association Group" Insurance Litigation, MDL # 1578. There it was consolidated with Lacy v. Mega Life, Mid-West National Life, Alliance for Affordable Services, et al. with SP Partner Richard T. Phillips as co-lead counsel. The consolidated Golebiowski/Lacy cases were settled on behalf of over a million current and former Association members and insurance purchasers.

Jones v. Jackson National arose from interest crediting practices of Jackson National Life Insurance Company. Originally filed in federal court in the United States District Court for the Northern District of Mississippi, Jones was transferred by the Judicial Panel on Multi District Litigation to the United States District Court for the Western District of Michigan. There, the case was consolidated with the South Carolina case of Wood v. Jackson National. After hearings before U.S. District Judge David McKeague, the insurance company defendant entered into settlement negotiations.  Judge McKeague approved a settlement on behalf of approximately 169,000 policyholders nationwide.

Million Plus Gulf Coast Eminent Domain Victory

July 25, 2006

A Harrison County jury in Gulfport, Mississippi, recently returned a verdict in excess of one million dollars for Smith Phillips’ client, Penny Rodrique, in a Katrina eminent domain case.  For more than twenty-five years prior to Hurricane Katrina, Ms. Rodrique operated her business, Mississippi Coast Fireworks, on her property located at the base of the Bay St. Louis Bridge in Pass Christian, Mississippi.  When the Highway 90 bridge was destroyed by the hurricane, the Mississippi Transportation Commission decided to relocate and elevate the bay bridge requiring the taking of a portion of Ms. Rodrique’s property.

Before the MTC taking, Ms. Rodrique’s property consisted of approximately an acre and the storm-damaged remnants of a 4,000 square foot metal building used in her fireworks business.  MTC took approximately two thirds of the property and the building remnants, leaving Ms. Rodrique only a small triangular shaped parcel.  Prior to the taking, the property, the first commercial property coming off the bridge into Harrison County, had high visibility from all directions and easy access from Highway 90.  The small remnant left after the taking had limited visibility and no direct access to the highway.

MTC initially offered Ms. Rodrique $416,700 as compensation for her property, including the building remnants and damage to her remaining property.  Ms. Rodrique retained Smith Phillips’ partner, Paul Scott, of Hernando to represent her in the case.  The landowner’s expert real estate appraiser testified just compensation, including damages, was over a million dollars.  Scott tried the case in the Special Court of Eminent Domain in Harrison County, Mississippi.  The jury returned a verdict for the full amount sought by SPMS&N partner Paul Scott --- $1,136,745.

Landowners Win Pipeline Cases

July 24, 2006

Energy prices have new pipeline construction increasing throughout the Southeast United States. Three new gas pipelines in Mississippi are in various stages of development, regulatory approval, and/or construction.  Ozark Gas Transmission will cross the north part of the State, cutting through private property in Coahoma, Quitman, Panola, Lafayette and Calhoun Counties.  A second company, Mid-Continent Express, has applied to the Federal Energy Regulatory Commission [FERC] for approval of a pipeline through Central Mississippi.  The third, Gulf South Pipeline Company, LP, is already in litigation taking right-of-way through Warren, Hinds, Copiah and Simpson counties.

Gas pipeline companies are private, for-profit companies.  The government has granted them the power of eminent domain, that is, the power to take private property for the construction of pipelines over the objections of private landowners. Such “takings,” even for easement purposes, are subject to due process requirements of the Constitution, which entitles landowners to compensation and to protection of the courts.

SPMS&N partner Paul Scott, the only Mississippi lawyer recognized by Best Lawyers in America in the field of eminent domain, represents landowners throughout the State whose land is being crossed by the new pipelines.  Scott says the pipeline easements have a much greater negative impact on property values than gas companies let on. “These pipelines adversely impact the entire tract of land,” says Scott.

Scott recently completed trials in two of the first new pipeline cases.  In both cases juries returned verdicts for the full amounts requested by Scott and the SPMS&N landowner-clients.  "We are very pleased with these verdicts,” said Paul Scott, the SPMS&N partner who represented both the Martins and the Eleys.  “When given all the facts, jurors understand the negative impact a gas transmission pipeline can have on the value of a piece of property."

Scott, managing partner of the Smith Phillips office in Hernando, is the only Mississippi member of Owners Counsel of America, the national organization of eminent domain and property rights litigation specialists committed to preservation of private land owners’ rights. [click here for more information on Owners Counsel of America] For more information on Smith Phillips eminent domain and property rights litigation [click here].

SPMS&N Partners Speak at National Seminars

January 30, 2003

SPMS&N Partners Richard T. Phillips and Paul R. Scott were speakers at recent national seminars in Miami, Florida and San Francisco, California.  Phillips spoke on "Institutional Bad Faith Litigation" at the ACI 12th Advanced National Forum on Litigating Bad Faith and Punitive Damages in Miami.  Paul R. Scott was a speaker at the national American Law Institute-American Bar Association advanced seminar on Eminent Domain and Land Value Litigation held in San Francisco.

Drawing on his extensive experience representing landowners in eminent domain, or “land taking” cases, Scott addressed the national audience on the trial of condemnation cases.  Scott served as outside counsel for the Mississippi State Highway Department and initiated numerous eminent domain cases across North Mississippi throughout the 1980s. He joined the Smith Phillips firm in 1993 and now exclusively represents property owners in his eminent domain practice.  Scott is the Mississippi representative in Owners Counsel of America, a national organization that works to defend the rights of private property owners, large and small, locally, and nationally.

“There is no more basic right than the right to private ownership of property” says Scott. “When the government takes private property for public use, it must deal fairly with the landowner and pay full and just compensation for the property taken.”

FedEx Drivers Litigation

January 15, 2003

Smith Phillips represents Mississippi drivers for FedEx Ground in nationwide Multidistrict Litigation pending in Indiana.  For more information click here for the litigation website www.fedexdriverslawsuit.com .