NU Online News Service, March 9, 10:44 a.m. EST
NEW ORLEANS (AP) — A judge has removed another legal hurdle for policyholders of Louisiana Citizens Property Insurance Corp. trying to collect more than $100 million for the company's failure to handle claims quickly enough following the 2005 hurricanes.
The ruling late Tuesday gives Regions Bank 10 days to tell plaintiff attorneys in the class-action lawsuit how much of Citizens' money the bank is holding, said Richard Robertson, chief executive of the state's property insurer of last resort.
A state district judge rejected a contention by Citizens and Regions Bank that the original seizure request should have made in Baton Rouge, rather than in Jefferson Parish. Robertson said the bank now has 10 days to reveal how much of Citizens' money it has and what accounts the money is in.
"The seizure has not been consummated. It will not be for at least 10 more days," Robertson said Wednesday.
Citizens has lost all appeals of a $92.8 million judgment in favor of about 18,500 policyholders claiming the company did not begin to adjust their claims for damage from hurricanes Katrina and Rita within the 30 days required by state law. Another 6,500 Citizens policyholders have pending claims.
Since the original decision, the bill has grown to about $105 million with judicial interest.
Citizens has made several offers to reach a settlement that would cover all 25,000 policyholders with claims. The latest called for the insurer to pay $103 million with a cap of $25 million on attorney fees. Plaintiff attorneys rejected the offer, saying those fees should be determined by a court.
The seizure process involves the bank turning over the money to the Jefferson Parish sheriff and then to the court for supervision before the judge decides how to distribute the money.
The governing board of Citizens has a regular meeting scheduled for Friday.
"I'm sure this will be discussed at the next board meeting," Robertson said.
Lead plaintiff attorney Wiley Beevers said his side could have begun seizing funds on Jan. 29.
"But we waited, offering a bit of a cooling off period to reach an out-of-court settlement, and though we think it was productive to a point, it's been 35 days and we were under no obligation to wait," Beevers said. "The longer Citizens waits, the more money they are costing the company and the longer our clients have to wait."
Citizens is considering an appeal to the U.S. Supreme Court, which has denied an emergency stay to block the seizure. The high court does not have to agree to hear the case.