Exemplary damage award sealed following Hurricane Ike trial

The Mostyn Law Firm recently landed an exemplary damage award following a Hurricane Ike trial; however, the Beaumont judge presiding over the case has sealed the amount.

Through Mostyn attorney Gregory Cox, plaintiffs Rene Lampson and Justina Henriquez filed suit against National Security Fire & Casualty and adjuster Renee Snellgrove on Sept. 3, 2010, in Jefferson County District Court.

The lawsuit alleges the defendants wrongfully denied the couple’s property damage claim after Hurricane Ike ravaged their Port Arthur home in 2008.

The case was transferred to a multidistrict litigation panel in Houston and remanded for trial in October – making the suit the first remanded Ike case to be tried in Beaumont.

According to the court’s charge to the jury, filed on Oct. 15, jurors found National Security knowingly failed to honor the terms of its insurance policy with Lampson and Henriquez.

Jurors awarded the couple more than $166,000 in damages and found the Mostyn Law Firm was entitled to $237,000 in attorney’s fees.

They jury also levied exemplary damages against National Security for fraud.

However, a courthouse official told the Southeast Texas Record that Judge Milton Shuffield, 136th District Court, bifurcated the question of exemplary damages to the jury at the conclusion of the trial and then sealed the amount of the award.

Court records show that on Oct. 21 National Security and Snellgrove filed a motion to set aside the question of exemplary damages, arguing that it “is crystal clear the trial” ended when the jury awarded the plaintiffs $403,700.

“Simply put, there is no non-frivolous argument that can be made in support of the phase two proceeding,” the motion states. “Defendants … pray that the (question of exemplary damages) be disregarded and stricken due to the lack of law and evidence.”

Although the amount of the exemplary award remains sealed, attached to the motion is an unofficial transcript of a conversation between counsel and Judge Shuffield concerning how an exemplary award would impact the defendants’ court bond.

In the transcript, which was taken before the jury was handed the question of exemplary damages, defense attorney Robert Killeen Jr. is quoted as saying: “Judge, this affects our bond. You know they want a million dollar ring-your-bell finding on fraud on the improper standard and then I’m going to have to post the bond. This is not right.”

The transcript continues by quoting Cox as saying he’s “entitled” to the jury finding on whether or not his clients should be awarded exemplary damages, and Judge Shuffield saying he doesn’t “see this ever getting to the boat house.”

On Oct. 24 the plaintiffs filed a response to the motion to set aside, asserting the motion is untimely and without merit.

Two weeks later, on Nov. 6 Judge Shuffield ordered the parties to mediate the issue.

The parties will meet with mediator Bob Black, a Mehaffy Weber attorney, on Dec. 3. If mediation fails, the issue of the exemplary damage award would likely be taken before the Ninth Court of Appeals in Beaumont.

Killeen is an attorney for the Houston law firm Killen & Stern.

Cox's firm, the Mostyn Law Firm, has reaped hundreds of millions from suits filed against insurers after Ike pummeled Southeast Texas.

Case No. D187-954