Court Sides with Mississippi Agent in Katrina Restaurant Case

By Andrew G. Simpson | April 26, 2012

The Mississippi Court of Appeals has upheld a ruling that the owners of a Bay St. Louis restaurant cannot collect more than $300,000 they claimed to be owed by a local insurance agent after their business washed away in Hurricane Katrina.

A Hancock County judge ruled against the owners of Trapani’s Eatery in in 2010. Annthony Trapani and his wife Jolynna had sued David Treutel Jr., a longtime insurance agent, following the 2005 storm. The couple claimed he failed to place as much insurance on their restaurant as they ordered before Katrina.

The Trapanis alleged that they ultimately received $314,678 less from insurance proceeds than they anticipated. Their lawsuit sought that much in damages.

However, Circuit Judge Roger Clark ruled that the Trapanis did not prove their case and upheld the lower court in granting a directed verdict in favor of agent Treutel.

According to court records, the Trapanis claimed that after Hurricane Ivan in 2004, they contacted Treutel Insurance Agency in the summer of 2005 about increasing their restaurant’s wind/hail policies coverage limits, and asked that the agency make the following changes, among others: to increase the structure coverage from $149,477 to $300,000; to increase the contents coverage from $76,794 to $150,000; and to increase the business interruption coverage from $35,000 to $300,000. Other suggested changes were undisputed.

On Aug. 29, 2005, Hurricane Katrina devastated Bay St. Louis, leaving virtually nothing remaining of Trapani Eatery’s structure. Jolynne Trapani claims that after Katrina, she learned for the first time that Treutel had not increased the wind policy’s limits on the structure, contents, and business interruption, as she requested.

Treutel disputed Jolynne’s claims that she asked him to make any other changes to the policies other than the changes he made. He claims that he made the following changes after his meeting with Jolynne in the summer of 2005: he increased the limits of coverage under the fire insurance policy to $150,000 for personal property and to $200,000 for loss of business income; and he increased the windstorm insurance policy coverage from $35,000 to $200,000 for loss of business income. According to Treutel, the Trepanis also had purchased flood insurance for the first time — $100,000 of coverage on the building and $100,000 for their personal property. Treutel further said that he did not increase the limits of coverage for the building and the personal property under the windstorm policy nor did he increase the limit of coverage for the building structure under the fire insurance policy.

The Trapanis claim that the total payments paid on their flood and wind policies failed to compensate them for all their losses.

The Trapanis filed suit against Treutel in Hancock County Chancery Court on Dec. 2, 2005. The matter eventually went to trial in the Hancock County Circuit Court. During the trial, the circuit judge struck one of the Trapanis’ exhibits in its entirety and also redacted two of the Trapanis’ exhibits. Additionally, the circuit judge disqualified the Trapanis’ expert, Peter Quave, after finding that Quave lacked sufficient training and experience in property/casualty insurance sales to qualify as an expert.

Treutel moved for a directed verdict claiming the Trapanis had failed to prove that they had suffered any damage proximately caused by the acts of Treutel. The circuit judge granted the motion, finding that the Trapanis had failed to prove damages. The Trapanis then appealed.

However, Circuit Judge Roger Clark has now agreed with the lower court that the Trapanis did not prove their case and with the directed verdict in favor of agent Treutel.

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