FEMA nearing settlement with Sandy victims

Lawsuits claim engineers' reports on damaged homes were changed to underpay homeowners

Posted

The Federal Emergency Management Agency is close to reaching a final settlement with Hurricane Sandy victims who filed lawsuits against their flood insurance carriers after the storm, claiming they were significantly underpaid based on fraudulent damage reports.

Long Beach attorney Denis Kelly, who is representing 240 homeowners, said that both sides are working on a tentative settlement in Austin, Texas, that may be finalized this week. Kelly’s clients are among more than 2,000 Sandy victims in New York and New Jersey who took legal action against their insurance companies after they received what they called “lowball” estimates for repairs.

Kelly said that settlement talks with FEMA, which administers the National Flood Insurance Program, began last month, after U.S. Magistrate Judge Gary Brown issued a scathing ruling in November that an engineering company hired by the Wright National Flood Insurance Company, U.S. Forensic, had “unjustly frustrated efforts” by two Long Beach homeowners, Deborah Raimey and her husband, Bob Kaible, who sought a damage claim after their home was destroyed.

“FEMA approached us and wanted to talk about possibly resolving the cases, and that was a result of all the evidence we had accumulated concerning the fraudulent engineering reports,” Kelly said.

Raimey and Kaible owned a property at 24 Michigan St. and live in an adjacent home, which they had hoped to expand. They rented out the Michigan Street house to help pay their mortgage. Sandy caused such extensive damage to 24 Michigan St., however, that it was deemed unsafe to live in by city building inspectors.

The couple were shocked when they received an engineer’s report in January 2013 stating that Sandy did not damage the home, despite the conclusion of an initial report, written a month earlier, that the home had in fact sustained structural damage caused by the storm’s “hydrodynamic forces.” Kaible was subsequently told by the engineer who wrote the original report, George Hernemar, that it had been changed. Hernemar showed Kaible a copy of the original.

Page 1 / 4