Appeals Court Upholds Most Of Award To Cumulus In Case Over Katrina Damage
February 18, 2015 at 4:19 AM (PT)
CUMULUS MEDIA (as predecessors CITADEL BROADCASTING CORP. and CITADEL BROADCASTING CO.) has won another round in its lawsuit against an insurance company for damage sustained to its NEW ORLEANS stations from Hurricane KATRINA.
In an opinion issued on FEBRUARY 11th, the LOUISIANA 4th Circuit Court of Appeals upheld a Civil District Court judgement of $5.9 million in lost profits against AXIS U.S. INSURANCE COMPANY a.k.a. AXIS REINSURANCE CO., but sent the jury's determination that AXIS owes $2.95 million in bad faith damages back for further consideration and more analysis of how much CUMULUS paid for legal fees. The jury in the lower court awarded CUMULUS $11,813,976 in total.
CUMULUS' suit sought to make AXIS cover damages to KKND, KMEZ, and WDVW/NEW ORLEANS, which all went dark for extended periods (134 days, 32 days and 17 days, respectively). AXIS paid $414,092 after deductible for property damage and $1,277,760 for business interruption and lost profits, plus $250,787 in adjustment expenses, but AXIS would not pay ordinary business interruption or contingent business interruption claims, then denied coverage outright.
CUMULUS won a verdict in NOVEMBER 2013 handing it $3,273,237 in lost profits, $2,383,751 for CBI losses, $250,000 for trial expert fees, and $2,953,494 plus $2,953,494 in attorneys' fees in "bad faith" damages. The appeals court agreed that the latter was defective because no evidence of attorneys' fees was offered and remanded the award to the lower court for more determination.