Federal Judge Rules Couple Can Sue Insurance Agent for Negligence

By William Murphy

Published on November 21, 2006

Michael and Lucille Catchot claim they dropped a $319 check for their flood insurance premium in the mail slot at the office of their Nationwide Mutual Insurance agent, Michael Felsher, a few days before the policy's renewal deadline of Aug. 14, 2005. Nationwide says the couple missed the deadline by one day. Felsher wrote a new policy that went into effect on Sept. 14.

On Aug. 29, Hurricane Katrina pounded the Gulf Coast and caused extensive damage to the Catchots' home. Nationwide attributed most of the destruction to the storm surge. The Catchots learned that their flood policy had lapsed when Nationwide refused to cover more than $79,000 of the damage. The couple subsequently sued Nationwide and Felsher, claiming negligence in letting the policy expire.

A Nationwide attorney argued that Felsher should not be named in the suit because the company, not Felsher, decided the Catchots' policy had lapsed. Judge Senter, however, disagreed and ruled that the Catchots' lawsuit against both parties can proceed in federal court.

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