Isabel Victims Want Full Settlement, Threaten Suit

The Capital (Annapolis, MD)
January 23, 2005 Sunday
by E.B. FURGURSON III, Staff Writer

Shady Side's Jennifer Dieux was dreading winter.

Cold weather before Christmas froze the water and sewage pipes in the government trailer she's lived in since Tropical Storm Isabel struck in 2003. Now she hopes the current cold snap won't do it again.

She and other victims of the storm are threatening to sue the companies and government entities that run the federal Flood Insurance Program, claiming it has shorted them of funds needed to rebuild their lives.

A demand letter sent Jan. 9 from a Rockville attorney representing 140 families in seven states warns they will file a lawsuit against government agencies, insurance companies and related contractors if a settlement is not secured by Valentine's Day.

"It's a last resort. We have tried everything else," said Ms. Deiux, who shares the trailer with her husband, Eric McKay and three pre-teen sons. "We just want our money."

A class-action lawsuit filed in federal court last May also included county families, and seeks damages and other results from seven insurance companies. That case is still in preliminary stages.

In an unusual step, state Insurance Commissioner Alfred W. Redmer Jr. wrote a letter last week telling storm victims how to get involved in both lawsuits.

While noting the state is not endorsing any law office or lawsuit, he told victims of the class-action being brought by a Washington firm and the law firm that sent the demand letter, including phone number and e-mail contacts.

He even said his office would help people get in touch with the latter firm, and had received some calls on it by Wednesday.

Mr. Redmer, who earlier determined his agency had no grounds to take up the fight because the federal insurance program was beyond its purview, said the decision to write the letter was indeed unusual.

"But these are very unusual circumstances. These are families that have not received money they believe they are entitled to," he said.

Attorney Martin Freeman sent the demand letter to government agencies, insurance companies, independent adjusters, even Computer Sciences Corporation, the conglomerate that oversees the entire National Flood Insurance Program. In it he set the February deadline and warned the suit would follow.

"But we hope it does not come to that," Mr. Freeman said. "At this point all we want is a quick settlement so these families can put their lives back together."

Computer Sciences Corporation referred any press inquiries to the Federal Emergency Management Agency.

There, spokesman James McIntyre said, "It is FEMA policy based on instructions from counsel that we cannot comment on cases in litigation."

Robert Enten, a lawyer and Maryland lobbyist for the Property and Casualty Insurance Association could not comment.

"I'm not familiar with the letter. I'd like to help you, but I am just not familiar with it," he said.

If the suit moves forward, and the plaintiffs case holds up in court, the defendants could have to pay out a lot more. Indemnity insurance, protecting companies against suits for mistakes, does not cover fraud.

And Mr. Freeman's letter states a case can be made indicating a "conspiracy to commit fraud, the carrying out of that fraud, and the cover-up of that fraud. "

He said there is a virtual library of documents, written and videotaped, to back the case up.

The letter from Mr. Redmer, sent to 1,300 families that filed flood insurance complaints with his agency, said the window for getting in on the class-action suit was soon approaching.

Attorney Victoria Nugent, of the Washington law firm that filed the class action - Cohen, Milstein, Hausfield and Toll - said there is no firm drop dead date in that suit because the one-year window to file a suit varies from case to case.

She said the class action lawsuit is limited to policy holders with the seven insurance carriers named in the filing, and she did not know the number of litigants in the case.

Pretrial motions by defendants seeking to block parts of the lawsuit are now before U.S. District Court Judge Benson Legg in Baltimore, who could hand down a preliminary decision in the coming weeks.

Meanwhile, Ms. Dieux and her family wait in their trailer.

"We are all inside after dark. The kids get cold because their bunks are on the outside wall of the trailer."

Though the county has issued her family a building permit, they haven't gotten enough in flood insurance payments to begin the work.

"We were only insured for $109,000, and it will cost more than that to rebuild."

The last settlement offer from their insurance company was $40,000 short of their full coverage.

While she hopes for a quick settlement in order to begin tearing down her old home to build anew, she foresees her fight could help others in the future.

"Maybe if we fight for what we deserve here, maybe (flood insurance companies) will think before they do it to other people," Ms. Dieux said.