Montecito has suffered tragic loss recently – first from the fires, then from mudslides and floods – all within a short period of time. Ray Bourhis, a Montecito homeowner, understands what the community is going through. We have been talking with many Montecitans and preparing legal resources to aide in the recovery. On this page, you’ll find several of our recent publications on Montecito, addressing common concerns for homeowners and business owners.
Noozhawk – January 31, 2018
For the people whose homes were damaged or destroyed in the Montecito mudslides, the rebuilding process could take up to two years.
A team of experts spoke Wednesday night at the Veterans Memorial Building, offering information about how to fight insurance companies who reject claims and ways to access money from FEMA. Read More…
Homeowners Insurance Law Should Help Victims of Montecito Mudslides
By Matthew Bourhis and Eric Whitehead
On January 10th, massive mudslides overran Montecito neighborhoods, destroying homes, mangling cars and killing people who had just returned from fire evacuations.
The mudslides occurred just two weeks after the largest wildfire in California history. And it’s no coincidence. The fires scorched the hills above Montecito, burning all the vegetation and leaving a dense landscape of rock and clay that does not absorb water. When the rain storm began, the hills and creek beds transformed into a slide, carrying rocks, boulders and trees – destroying everything in its path.
Homes were flooded, battered and swept away by the deluge. Now Montecito homeowners face the arduous task of repairing and replacing their homes and personal property. which means dealing with the insurance company. The problem is that homeowners insurance policies typically do not cover damage from mudslides and floods. But they do cover fire damage.
In the summer of 1985, wildfires burned large swaths of vegetation in Contra Costa County. That winter, the same area experienced heavy rainfall, causing a major landslide and flood in Lafayette, CA. One home was completely destroyed, forcing the residents to file a homeowners insurance claim. Their policy covered property damage caused by wildfires but specifically excluded “Earth Damage” and “Water Damage.” State Farm denied the claim on the basis of these exclusions.
In the lawsuit that followed, Howell v. State Farm, the court ruled in favor of the homeowners. It concluded that the wildfire caused the property damage because it induced the landslide and flood. Put another way, both the flooding and landslide would not have occurred but for the wildfire.
By statute, California insurance policies are required to provide coverage where a covered peril is the “proximate cause” of the loss. Courts have interpreted this broadly, adopting what is known as an “efficient proximate cause” theory of liability. According to this theory, causation is construed as the “predominant cause of damage” or the “cause that sets others in motion.”
Montecito homeowners are likely to encounter the same legal issue. Although insurance companies might argue that damage from the floods and mudslides are excluded, California law says otherwise.
Los Angeles Times
Why Montecito’s mudslide victims don’t need flood insurance to recover their losses
Matthew Bourhis, Ray Bourhis, San Francisco
To the editor: Law professor Kenneth S. Klein writes that Montecito flood victims should not suppose their property losses are covered by homeowners’ insurance. Contrary to Klein’s statement, that is exactly what they should suppose. (“Another lesson from Montecito — even in semi-arid Southern California, we need flood insurance,” Opinion, Jan. 15)
California courts have struck down policy provisions that exclude recovery for floods and mudslides, as long as they were set in motion by a fire. The leading case on this topic is Howell vs. State Farm, in which California Court of Appeal judges in 1990 held that exclusions for flooding and earth movements may not apply when they were caused by a fire.
Klein goes on to say that flood insurance is “your best hope” to recover. That suggestion is wholly unacceptable due to the inadequacies and dollar restrictions in flood insurance policies. Virtually all victims who lost their homes in Montecito are entitled to recover their losses under their homeowners’ policies.
Contrary to Klein’s suggestion, victims should file for all of their losses under their homeowners’ policies. Any insurance company that would deny such claims would be exposing itself to damages far beyond the property loss in question.
Santa Barbara Press
(Please note, this link is subscription only, so we have taken the liberty to cut and paste it below.)
Law offers hope for fire, flood victims
By SCOTT STEEPLETON, NEWS-PRESS CITY EDITOR
January 18, 2018 7:24 AM
If it seems like cashing in and moving away is the only option after losing everything or close to everything in the recent deadly storm, a South Coast lawyer specializing in fighting insurance bad faith says think again.
Ray Bourhis, 75, who’s been featured on “60 Minutes” and in national publications, says despite what insurance adjusters may say, in California damage from a flood that is caused by or exacerbated by fire is covered under a homeowner’s policy.
“A lot of people are surprised to learn that, contrary what was said in (a recent) L.A. Times op-ed, you don’t have to have flood insurance to be covered.”
In 1990, the state’s 1st District Court of Appeal ruled that State Farm Fire & Casualty Co. was responsible for paying damages to a woman who suffered property damage when the slope behind her home gave way in heavy rains following a fire that destroyed the hillside vegetation.
State Farm argued that the policy in question had en exclusion for flooding and earth movement and that it wouldn’t pay for the damage claim, and a Contra Costa County trial court handed it a summary judgment.
The plaintiff, Barbara Howell appealed.
Her expert said the landslide probably would not have happened had the ground cover been intact. “Although water was the slide’s actuating mechanism, resistance to failure was severely impaired by destruction of the area’s natural biotechnical slope protection,” according to the expert’s report.
On June 25, 1985, the slope that failed was devastated by a fire. “The destruction of the vegetation and rooting at the surface caused a(n) adverse modification to the hydrologic regime in the soil … In my opinion, if the vegetation had not been destroyed by the fire, the slope failure … probably would not have occurred.”
The appeals court opinion highlighted this finding.
“What the court said,” Mr. Bourhis told the News-Press, “is when you have a fire and the result is vegetation is destroyed, and then the flooding occurs and debris comes tumbling down, all of the damage is covered by your insurance policy.”
The appeals court was presented with two primary issues. First, was whether an insurer providing coverage under an “all risk” property insurance policy may contractually exclude coverage when an insured peril is the “efficient proximate cause” of a loss.
It concluded that an insurer may not contractually limit its liability in this manner.
The second issue was whether there was a triable issue of fact that the “efficient proximate cause” of the loss in the case was a covered peril, namely, fire.
The panel concluded there was a triable issue of fact and reversed the summary judgment.
It’s a lesson Mr. Bourhis said anyone near the Thomas Fire burn areas of Santa Barbara and Ventura counties who have suffered flood damage or who may as the rainy season continues should remember.
“If any portion of a loss was a result of the fire, 100 percent of the loss is covered. Period,” he said.
Mr. Bourhis has a website dedicated to the consumer, “written by insurance lawyers who are on your side.”
The address is insuranceconsumers.com
“If any portion of a loss was a result of the fire, 100 percent of the loss is covered. Period.”
Note that in California it is unlawful for an insurance company:
– to misrepresent insurance coverage;
– to engage in unreasonable delay; or
– to fail to pay claims that are due in a timely manner;
An insurance company that engages in such conduct can be held liable for all additional damages caused, including the policyholder’s attorneys fees. “
~ as appeared in the SB Sentinal
As appeared in the SB Sentinal