ORRILL v. AIG INC.

• Decision Date: 21 April 2010
• Docket Number: No. 2009-CA-0888.,2009-CA-0888.
• Citation: 38 So.3d 457
• Parties: Toni Swain ORRILL, Individually and on Behalf of the Class v. AIG, INC., AIG Consultants, Inc., AIG Com, Inc., AIG Domestic Claims, Inc., d/b/a AIG Claims Services, Audubon Insurance Company d/b/a Audubon Insurance Group, and ABC, DEF and GHI Insurance Companies, Individually, et al.
• Court: Court of Appeal of Louisiana — District of US

38 So.3d 457

Toni Swain ORRILL, Individually and on Behalf of the Class

v.AIG, INC., AIG Consultants, Inc., AIG Com, Inc., AIG Domestic Claims, Inc., d/b/a AIG Claims Services, Audubon Insurance Company d/b/a Audubon Insurance Group, and ABC, DEF and GHI Insurance Companies, Individually, et al.

No. 2009-CA-0888.

Court of Appeal of Louisiana,Fourth Circuit.

April 21, 2010.

Madro Bandaries, Edward Moreno, Madro Bandaries, P.L.C., Jeffrey Berniard, Berniard Law Firm, Gregory P. DiLeo, Jennifer B. Eagan, Gregory P. DiLeo, APLC, New Orleans, LA, for Settlement Class.

Fred L. Herman, Law Offices of Fred L. Herman, Stephen J. Herman, Steven J. Lane, Herman Herman Katz & Cotlar, L.L.P., New Orleans, LA, Wiley J. Beevers, Steven M. Mauterer, Michael F. Somoza, Beevers & Beevers, L.L.P., Gretna, LA, J. Robert Ates, Ates Law Firm, APLC, Destrahan, LA, for Scharwath & Roberts (and Appellants Herein).

Darren A. Patin, Richard T. Simmons, Jr., John T. Culotta, John E. Unsworth, Jr., Hailey McNamara Hall Larmann & Papale, Metairie, LA, for Louisiana Citizens Property Insurance Corporation.

(Court composed of Judge PATRICIA RIVET MURRAY, Judge JAMES F. McKAY, III, Judge TERRI F. LOVE, Judge DAVID S. GORBATY, Judge ROLAND L. BELSOME).

DAVID S. GORBATY, Judge.

The instant appeal arises from a March 19, 2009 judgment approving a settlement and awarding attorney's fees in the Orrill class action. The fairness hearing on the proposed settlement was held December 15-19, 2008. The facts and events culminating in this appeal were recently chronicled in Orrill v. Louisiana Citizens Fair Plan, 09-0566, 09-0568 (La.App. 4 Cir. 12/09/09), 26 So.3d 994. We will reiterate the facts necessary to address the issues raised by appellants herein.

The issues presented for review are res nova; there is no case law to support either party's position, other than factors to consider at a fairness hearing. However, we must determine if the proposed settlement in this case is fair in light of the existence of another active class action in another jurisdiction.

PROCEEDINGS BELOW:

This appeal involves three class action lawsuits. The captioned matter was filed in Civil District Court for the Parish of Orleans on October 2, 2005, and the class was certified June 6, 2008. A second class action entitled “ Oubre v. Louisiana Citizens Fair Plan,” was filed in the 24th Judicial District for the Parish of Jefferson on November 18, 2005, and the class was certified on July 17, 2006. A third class action was filed in the 34th Judicial District for the Parish of St. Bernard entitled Chalona v. Louisiana Citizens Property Ins. Corp. It is unclear from the record exactly when this case was filed, but one can derive from the judgment certifying the class that it was filed after the Oubre suit. Chalona was certified on January 25, 2008. As of this date, the remaining defendant in each lawsuit is Louisiana Citizens Fair Plan (Citizens). All lawsuits were filed in connection with alleged failings by Citizens to timely adjust claims and/or timely offer to settle claims following Hurricanes Katrina and Rita. For purposes of this appeal, and at the request of plaintiffs' counsel in both Orrill and Oubre, this Court has reviewed and considered the entire record filed in connection with 2009-CA-0566 c/w 2009-CA-0568 and 2009-CA-0888.

The Oubre class definition, which was affirmed by the Louisiana 5th Circuit Court of Appeal, is as follows:

All present or past insureds of Louisiana Citizens Property Insurance Corporation a/k/a LOUISIANA CITIZENS FAIR PLAN, hereinafter referred to as “LCPIC”, who on or after August 29, 2005, provided notification of loss resulting from Hurricanes Katrina and/or Rita to LCPIC, and whose loss adjustment was not initiated within thirty (30) days after notification of loss.

The original class definition in Orrill signed on June 6, 2008, was:

All persons insured by or through the Louisiana Citizens' [sic] Fair Plan, and/or the Coastal Plan, underwritten, administered and/or serviced by any one or more of the named defendants, who sustained damages as a result of Hurricane Katrina to their covered personal and/or rental property and/or real property and improvements who have been unable to receive prompt adjustment within thirty days after notification of their loss, and/or who did not receive a written offer to settle within thirty days after receipt of satisfactory proof of loss of that claim, as provided by their policies of insurance.

Contemporaneously with the activities in Orrill, the Oubre case was moving forward in the 24th JDC, as was the Chalona case in the 34th JDC. Six months prior to certification of the class in Orrill, Judge Sullivan, the judge presiding over Oubre, approved the class notice, which advised:

At present, this class action covers no other claims of [sic] cause of action other than that clearly set forth in the class definition and effects no other pending litigation, individual and/or class action, brought in the Parish of Jefferson or any other parish which action is not in conflict with the class definition as set forth by this court.

If you have filed your own separate claim as a result of Hurricane Katrina or Rita against Louisiana Citizens which does not make a claim that Louisiana Citizens failed to initiate loss adjustment within thirty (30) days after notification of loss, you MAY maintain your own separate lawsuit AND be a member of this class.

By remaining a class member, any claims against Louisiana Citizens for damages arising from their conduct as alleged by the class representatives will be determined in this case and cannot be presented in any other lawsuit.

At the same time these two above-referenced lawsuits were pending, the other class action, Chalona v. Louisiana Citizens, was pending in the 34th Judicial District Court for the Parish of St. Bernard. That court certified the class, and specifically noted and ruled:

This Court also takes note of the decision in and the class as defined in Oubre v. Louisiana Citizens Fair Plan, 961 So.2d 504 (La.App. 5th Cir., 2007).... The Court defined the class as ‘all present or past insured of Louisiana Citizens Property Insurance Corporation a/k/a LOUISIANA CITIZENS FAIR PLAN, hereinafter referred to as “LCPIC,” who, on or after August 29, 2005, provided notification of loss resulting from Hurricane Katrina and/or Rita to LCPIC, and whose loss adjustment was not initiated within thirty (30) days after notification of loss.’ The 5th Circuit Court of Appeal affirmed that decision and the Louisiana Supreme Court denied writs in the Oubre case, therefore there exists a maintainable class action in the 24th Judicial District Court of Jefferson Parish that inherently would include some potential class members of the class action at issue in the Chalona case. Additionally, the Oubre case was filed in Jefferson Parish before the Chalona case was filed in St. Bernard Parish. The Court takes note of the existence of Oubre, but must nonetheless render an appropriate judgment in the Chalona case. Accordingly, the defined class will exclude the members of the Oubre class unless they additionally did not have a written offer to settle within thirty (30) days after receipt of satisfactory proof of loss.... Therefore, the Chalona class will seek recovery for damages for a different alleged act than Oubre and will not duplicate any recovery. (emphasis added.)

On September 23, 2008, counsel for Citizens sent a letter to Orrill counsel, accepting a proposal of settlement. In addition to outlining the monetary details of the settlement, the letter stated ¹ :

In consideration of the above, the Chalona and Orrill class members will execute a complete Release in favor of Louisiana Citizens, relative to any and all other claims of bad faith (pursuant to La. Rev. Stats. 22:658, 22:1220 and/or any other provisions of the law) which they have or may assert, and emanating out of the occurrence of Hurricanes Katrina and/or Rita, which Release specifically includes, but is not limited to, the claims which are being asserted in the Oubre matter.

An order was signed on October 1, 2008, whereby the notice of the proposed settlement in Orrill was approved, and dates were set to opt out of the class, to object to the settlement, and for a fairness hearing. The Notice of Proposed Class Settlement contained a new class definition, effectively discarding the previously certified class definitions in both Orrill and Chalona, and enlarging and expanding the class definition. The new class definition now included persons who were members or potential members of the Oubre class, the suit pending in the 24th Judicial District for the Parish of Jefferson.

The Stipulation of Settlement that accompanied the motion for approval specifically states: “... there are pending in this, and other jurisdictions, the same or similar matters that contend to be class actions arising out of the same occurrence that was the subject matter of this litigation; and/or, in addition, are based upon the same cause or causes of action, involve parties in the same or similar legal capacity, and involve the same or similar evidence.” The Stipulation further stated: “The parties herein acknowledge that this Compromise Agreement, that is entered between the parties to avoid further litigation, is favored by law, has a force equal to the authority of things adjudged and thus has res judicata effect, as per provisions of La. Civ.Code Art. 3078, including members of the class as found in the ‘class definition’ below.” [emphasis added]. The referenced definition is identical to the one found in the motion to approve the settlement.

On October 29, 2008, Judge Sullivan issued a temporary restraining order to Citizens restraining them 1) from processing any claim form by an Oubre class member (as per Oubre class definition); 2) from considering the absence of receipt of an “opt out” form to be a consent by an...