It shouldn't have to take a hurricane to prove that a policyholder is indeed properly covered for the damage the storm caused.
But it has come to that in Mississippi.
Gaming operator Pinnacle Entertainment recently won a partial summary judgment against two of its insurers, Allianz Global Risks US Insurance Company and RSUI Indemnity Company., in an insurance coverage case stemming from Hurricane Katrina.
"Pinnacle has always maintained that it has coverage for flood and other related damage caused by Hurricane Katrina," said Dan Lee, CEO of Pinnacle. "We specifically bought $400 million of coverage for Weather Catastrophe Occurrences like Katrina, including any resulting flood. We have been extremely disappointed that it has taken a lawsuit to convince our excess insurers of this fact."
The Irell & Manella law firm is representing Pinnacle in the case, which is pending before Judge Brian E. Sandoval of the U.S. District Court in Nevada.
In August 2005, Pinnacle's facility in Biloxi, Mississippi, suffered severe damage and a financial loss due to business. Allianz Global Risks US Insurance Company and RSUI Indemnity Company took the position that coverage for all storm surge damage falling within their policy layers was precluded by flood exclusions contained within their policies.
After filing suit in August 2006, Irell & Manella moved for partial summary judgment on this issue in April 2007. The insurers subsequently filed cross-motions. Judge Sandoval took the motion and cross-motions under submission after a two-hour oral argument. On March 26, he issued his ruling in Pinnacle's favor.
According to Marc Maister, a partner with Irell & Manella who served as Pinnacle's lead counsel, the order granting Pinnacle partial summary judgment (and denying the insurers' cross-motions) was based on the language of the policies at issue and eliminates the insurers' primary coverage defense.
"The judge's opinion is extremely well-reasoned, based on the specific policy language in question, and applies long-standing rules of insurance policy interpretation," Maister said.
The ruling follows a settlement with another of Pinnacle's excess insurers, Arch Specialty Insurance Company, which paid Pinnacle $36,750,000 on March 14, bringing its total insurance recovery thus far to $141,750,000.
In addition to the contractual claim under the policies, Pinnacle is pursuing a bad faith claim against Allianz and RSUI.
|
