Phelps Successfully Defends Insurers From Multimillion-Dollar Bad Faith Claim Over Riverboat Repairs
NEW ORLEANS — April 19, 2022 — In a fast-moving jury trial with a number of unexpected turns, a diverse team of Phelps lawyers successfully defended Underwriters at Lloyd’s of London against a bad faith claim alleged to be in excess of $100 million.
Brought to the 24th Judicial District Court by riverboat cruise company French America Line, the suit alleged that the underwriters failed to provide the company funds needed to repair its vessel, which led to the demise of its operation. The case stemmed from an incident on the riverboat's maiden voyage on the Mississippi River, and the company never sailed again. All settlement efforts before and during the trial failed.
The Phelps team spanned several practice areas and included Christopher Ralston, Arthur Kraatz, Sarah Smith-Clevenger, Sophie Gray, Kevin LaVie, Rose Berlow, David Southgate and Harry Rosenberg. After almost two weeks at trial, the Phelps team argued the bad faith claim was legally flawed and asked the judge to remove it from the scope of the jury’s decision. The judge agreed, drastically reducing the amount French America could ask for from $100 million down to $2 million. Of that $2 million request, the jury’s verdict awarded French America just $30,000.
“This is how teams work," said Phelps Managing Partner Marshall Redmon.
The Phelps team showed that the London Underwriters had previously paid the plaintiff funds estimated to far exceed the needed repairs and argued that Underwriters should not be held liable for further losses or damages to the business.
"It was a victory for London to show that they will stand up for themselves when they believe they have handled the matter fairly, appropriately and swiftly," Chris Ralston said. "We are grateful that the jury recognized that the underwriters did what they were supposed to do. We are very pleased for our clients, and we're very pleased that the system worked and appreciate the way the court handled the case."
Lawyers from Phelps' Insurance, Litigation, Admiralty and Employment teams worked on this case in the New Orleans and London groups. Partner Chris Ralston, from the litigation group, led the team.
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