News - Weather - Hurricane

Tuesday, Nov. 03, 2009

Witness says wind, adjuster says water

GULFPORT — State Farm adjuster Tip Pupua testified in federal court Tuesday that he still believes Hurricane Katrina’s tidal surge swept away a policyholder’s outbuilding, even though he heard an eyewitness testify earlier that the building disappeared after the he and his family hunkered down in their hall while a tornado roared through the north Biloxi neighborhood.

“I don’t believe wind was capable of destroying the building,” Pupua said. “I do believe water was the more likely scenario.”

Pupua was called to the stand on the second day of a jury trial in the case Bossier v. State Farm Fire & Casualty Co. Reginald “Ed” Bossier is seeking policy limits of around $650,000 for the loss of his Back Bay home. Bossier is trying to show wind caused extensive damage to his property before the tide surged ashore. To prevail, State Farm must prove its assertion that water caused the damage.

After Katrina, the adjuster on Bossier’s claim paid him $2,300 for roof and shingle damage in October 2005. Pupua, promoted to manager for Katrina, reviewed the file and denied the remainder of Bossier’s claim three days later. Pupua told the jury he denied the claim because tidal surge, excluded from coverage, caused the extensive property damage. Pupua said his decision also was based on weather information gathered from the Internet and in written reports.

Pupua admitted under questioning from Bossier’s attorney, Judy Guice, that he was unable to produce any of the reports he used because State Farm later conducted a “Hurricane sweep,” as Guice called it. The company ordered adjusters to return all Katrina documents, including e-mails and adjusting guidelines.

Guice also established that State Farm did not send an engineer to determine what caused Bossier’s losses and Pupua did not review engineering reports on surrounding properties before denying Bossier’s claim. Four reports she reviewed with Pupua on surrounding properties indicated extensive wind damage in the neighborhood. Twisted tree tops, a sign of strong winds or a tornado, also sat on Bossier’s property.

Eyewitness Joseph Ziz Jr. said Katrina’s winds picked up around 6 a.m. He heard the unmistakable sound of a tornado, which he had previously experienced, around 7:30 a.m. When the roar subsided, Ziz said, he looked out to see that Bossier’s fence and outbuilding had disappeared. The water, he said, had not yet risen. It came up quickly at around 7:45 a.m., he said.

Bossier gave State Farm a sworn statement from Ziz about the tornado and outbuilding in January 2008. The company finally paid Bossier $77,000 for the outbuilding four years after Katrina and 30 days after Ziz gave sworn pre-trial testimony to State Farm attorneys.

Testimony on Tuesday also revealed that State Farm adjusters followed a wind-water protocol drafted by claims executive Stephan Hinkle. The first draft said State Farm had to prove its water exclusion applied in order to deny coverage. Damage caused by windstorm and flood, the draft said, required a detailed investigation.

After the draft was vetted by at least eight State Farm executives, State Farm’s burden of proof had been removed and the language about the investigation changed. The final version said: “When the investigation indicates that the damage was caused by excluded water and the claim investigation does not reveal independent windstorm damage to separate portions of the property, there is no coverage available under the homeowners policy . . .”

Hinkle, whose testimony from an earlier case was read into the trial record, acknowledged that the homeowners policy does not say that only wind damage to “separate portions of the property” is covered.