U.S. judge melds urgency and outrage in ruling on Sandy insurance claims

In a decision melding a sense of outrage with one of urgency, federal Magistrate Judge Gary Brown ordered insurers to turn over documentation of how they made determinations in Sandy-related damage cases.

Brown, in a Nov. 7 ruling that pulled no punches, wrote that in one Long Beach case -- and perhaps many others -- reports on storm-ravaged houses may secretly have been rewritten to erroneously blame structural damage on erosion rather than flooding, allowing insurers to reduce or deny claims.

"Two years ago, the crushing force of Hurricane Sandy devastated large areas of this judicial district," Brown writes in a 27-page ruling, noting the more than 1,000 storm-related cases that have passed through magistrates court.

"While much has been done to facilitate recovery, assistance has not been consistent or timely, leaving some homeowners behind -- even those who properly paid for flood insurance," he wrote.

The judge, in stating the reality that too many still are suffering two years after the storm, goes on to address a lawsuit involving Deborah Ramey and her stepfather, Larry Raisfeld. The case, he wrote, "has exposed reprehensible gamesmanship by a professional engineering company that unjustly frustrated efforts by two homeowners to get fair consideration of their claims."

Then comes the clincher: "Worse yet, evidence suggests that these unprincipled practices may be widespread."

What's alarming is that it took a cellphone photo of the original engineer's report, the property owners' persistence in fighting for compensation and Brown's questioning of a witness during a hearing to bring that evidence to light.

"The major effect of the reprehensible practices uncovered here . . . was to unnecessarily complicate and delay this action," Brown wrote, adding that no more than $170,000 could be at stake in the case.

"To a government-backed insurer, these are trifling figures, and in the world of federal cases, such figures are unimpressive, particularly when compared to the exorbitant costs of litigation," Brown wrote. "On the other hand, to individual homeowners, these are staggeringly large sums."

Brown wrote that some significant sanction "or even contempt -- might be warranted on these facts." He decided instead to rule in a way that would expedite the case "and avoid further unneeded complications . . . ."

The insurer, Wright National Flood Insurance Co., plans to appeal; an attorney for the engineering firm, U.S. Forensics LLC, told Newsday that it "respectfully disagrees" with Brown's decision.

Still, the ruling -- as it should -- has had a domino effect. All four U.S. senators from New York and New Jersey last week demanded that the Federal Emergency Management Agency launch an investigation into the matter.

Meanwhile, the insurance companies have 30 days to release thousands of documents used to deny Sandy flood claims in New York. And New Jersey's senators have asked FEMA to force that state's insurers to be bound by the Brown's decision too.

That now puts the onus on FEMA to untangle the mess.

As for the Long Beach case, that deserves scrutiny from both the U.S. attorney's office and New York's attorney general.

CORRECTION: The name of federal Magistrate Judge Gary Brown was incorrect in a previous version of the story.