The Boys from Biloxi: A Legal Thriller (16 page)

The summer of 1969 was a busy season in the Caribbean, but there was no reason to believe Hurricane Camille would become so deadly. When it skirted north of Cuba on August 15 it was an unimpressive Category 2, with a path projected to find landfall along the Florida Panhandle. As it headed north, it calmed somewhat after Cuba, then intensified rapidly in the warm waters of the Gulf. It wasn’t a wide storm, but its lack of size only added to its speed. By August 17, it was a Cat 5 and roaring toward the Coast. All projections were ignored and it took dead aim at Biloxi.

The Gulf Coast was accustomed to hurricanes and everyone could tell stories, everyone had a favorite. Warnings were part of life, and, for the most part, taken in stride. No one had ever seen a twenty-foot storm surge and predictions for one seemed absurd. The residents along the beach tacked plywood over their windows, bought batteries, food, water, and tuned up their radios; the usual precautions. They had been through the routine so many times. They were not being foolish. Those who survived would later say they had simply never seen anything like Camille.

On Sunday afternoon, August 17, forecasters determined that the storm was not veering to the east. Alarms and civil alerts rang out in every coastal town—Waveland, Bay St. Louis, Pass Christian, Long Beach, Gulfport, Biloxi, Ocean Springs, and Pascagoula. The urgent warnings were dire and predicted an unprecedented storm surge and unheard-of winds. The last-minute evacuation was chaotic and most residents were determined to ride out the storm.

At 9:00
p.m.
, as the winds picked up, the mayor of Gulfport
ordered the jail to open its doors. All prisoners were told to go home, we’ll find you later. Not a single one took the offer. Power and phone lines were down by 10:00
p.m.

At 11:30, Camille made landfall between Bay St. Louis and Pass Christian. It was only eighty miles wide, but its eye was tightly formed, its winds historic. It was a Category 5, the second-strongest hurricane to ever hit the United States. Its barometric pressure fell to 26.85 inches or 900 millibars, the second lowest in U.S. history. For one fleeting moment, a full sixty seconds, the wind speed gauges hit 175 miles per hour, then Camille blew them all into oblivion. Experts guessed that the top winds hit 200 mph. They pushed ashore a wall of water twenty-four feet in height. In some places the surge measured almost thirty feet.

The heavier populations to its east—Biloxi, Gulfport, Pascagoula—bore the full brunt of its counter-clockwise rotation. Virtually every building along Highway 90 and the beach was destroyed. The highway itself buckled and its bridges were knocked out. Power and phone lines snapped and disappeared in the raging waters. Six blocks inland from the beach entire neighborhoods were demolished. Six thousand homes disappeared. Another fourteen thousand were severely damaged. The storm killed 143 people, most of whom lived close to the beach and refused to evacuate. Schools, hospitals, churches, stores, office buildings, courthouses, fire stations—everything was gutted.

Camille wasn’t finished. She weakened quickly in the Ohio Valley, then turned east for more destruction. Over central Virginia, she merged with a dense low-pressure system that seemed to be waiting for her. Together, they dumped thirty inches of rain in twenty-four hours into Nelson County, Virginia, causing historic floods that wiped out highways, homes, and lives; 153 were killed in Virginia.

The storm was last heard from fading over the Atlantic. Mercifully, there would never be another Camille. Her damage was so unbelievable that the National Weather Service retired her name.

When the sun rose on Monday, August 18, the clouds were gone. The storm was so fast it disappeared quickly, taking its wind and rain elsewhere. But it was still August in Mississippi, and by mid-morning the temperature was pushing ninety.

People emerged from the rubble and moved about like zombies, shell-shocked by the terror of the night and the devastation in front of them. Screams were heard as they found friends, neighbors, and loved ones who didn’t make it. They searched for bodies, automobiles, even houses.

Life had suddenly been reduced to the basics—food, water, and shelter. And health care; over 21,000 people were injured and there were no hospitals, no clinics.

The governor had moved five thousand National Guardsmen to Camp Shelby, seventy miles to the north. By dawn they were hustling south in caravans and listening to the first radio reports. Seventy-five thousand people were homeless. Thousands were either dead or missing. The Guardsmen soon ran into trouble when they encountered entire trees lying across Highway 49. Using chain saws and bulldozers to clear the road, it took almost six hours to reach Biloxi.

The 101st Airborne was right behind them. As the first images of the Coast made their way to the evening news, state, federal, and private aid began pouring in. Dozens of relief organizations mobilized and sent teams of doctors, nurses, and volunteers. Churches and religious organizations sent thousands of relief workers, most of whom slept in tents. Along with food and water, tons of medical supplies arrived, most of it by boat to avoid the impassable roads.

It took a month to restore electricity to the hospitals and schools that could open. Longer, to account for all the missing people. Years, to rebuild for those who wanted to.

For six months after the storm, the Coast resembled a camp for displaced war refugees. Rows of green army tents for hospitals;
rows of barracks; thousands of soldiers hauling debris; volunteers manning food and water distribution centers; large tents filled with clothing and even furniture; and long lines of people waiting to get in.

For a resilient people, the challenge was almost overwhelming, but they tenaciously hung on and slowly rebuilt. The storm was a staggering blow and they were stunned by it. However, they had no choice but to survive. Inch by inch, things improved a little each day. The opening of the schools in mid-October was a milestone. When Biloxi hosted its archrival Gulfport in a football game on a Friday night, there was a record crowd and life seemed almost normal.

For the mobsters, Camille led to unique opportunities. They were all temporarily out of business but they knew the business would quickly come back. The place was crawling with soldiers, relief workers, and an amazing collection of riffraff that was attracted to disasters and the free goodies handed out. These people were away from home, tired, stressed, and in need of booze and entertainment.

Lance Malco spent no time licking his wounds. His home, one mile inland, was not heavily damaged. However, his clubs on the Strip, Red Velvet and Foxy’s, were completely gone, blown away and washed away down to their concrete slabs. The Truck Stop was gutted but still standing. Two of his bars were gone; two others were in decent shape. Three of his motels along the beach were also bare down to the concrete. Sadly, two of his dancers perished in one of them. Lance had ordered them to evacuate. He planned to send their families a check.

As Lance, Hugh, and Nevin inspected the damage to Red Velvet with the first insurance adjuster, they noticed eight large squares of what appeared to be metal embedded in the concrete
foundation. The adjuster was curious and asked what they were. Lance and Nevin said they had no idea. The squares were actually magnets that had been hidden under a thick carpet upon which the craps tables were situated. The crooked dice had smaller magnets behind certain numbers. By manipulating various sets of dice, the shifty dealers could increase the chances of certain numbers being put into play.

After all the years of being accused of rigging his tables, Lance had finally been caught, thanks to Camille. But the hapless adjuster didn’t gamble and had no idea what he was looking at. Nevin winked at Lance and both had the same thought: No one in the world could guesstimate the amount of hard cash those magnets had netted for the nightclub.

Insurance policies written in Mississippi covered damage by wind, with specific and carefully worded exclusions for damage by water. The wind-versus-water fights were not yet raging, but the insurance companies were already bracing for them. When Lance’s insurer denied based on water damage, he threatened to sue. There was little doubt that the storm surge had swamped his nightclubs along Highway 90.

Because he had more cash than the other nightclub owners, Lance was determined not only to open first, but to reopen a much fancier version of Red Velvet. He found a contractor in Baton Rouge with men and supplies.

Before most homeowners had cleared the debris from their lawns and streets, Lance was rebuilding his flagship club. He planned to add a restaurant, expand the bar, build more rooms upstairs. He had lots of plans. He, Hugh, and Nevin firmly believed that most of their competitors on the Strip could not survive Camille. The time was right to spend big and establish a monopoly.

Wind versus water.

On the Sunday afternoon before Camille hit, Jesse and Agnes made the last-minute decision to evacuate. She and the kids would head north to her parents’ home in Kansas. Jesse insisted on staying with the house. They hurriedly packed the family station wagon with supplies and water, and, with Keith behind the wheel, waved a frightened goodbye to Jesse.

Twelve hours later he wished he had joined them. He could not remember being so frightened, not even in the war. Never again would he ride out a hurricane.

Their home survived structurally but was heavily damaged. Most of the roof was blown off. The small front porch was never found. Virtually all the windows were shattered. The storm surge pushed floodwaters to within ten feet of the front door. The neighbors down the street, to the south, were not so lucky and took in water. Jesse spent two days clearing debris and waited in line for hours to get two large tarps from a Red Cross distribution center. He hired a teenager looking for work and they labored in the heat to secure the openings in the roof. Much of the furniture was soaked from rainwater and had to be tossed. A team of National Guardsmen arrived and helped him cover the windows with plywood. They also supplied him with bottled water and a case of tomato soup, which he ate from the can because there was no way to heat it. After five days of hot and exhausting work, he waited in line at a Guard station and was handed a telephone. He called Agnes in Kansas and almost wept when he heard her voice. She
wept too, as did the children. Since there was no electricity and the days were long and hot, he told them to stay in Kansas until the situation improved.

Volunteers and relief workers were everywhere, and he gathered a crew to clean out his office downtown. The waterline on the downstairs walls was exactly seven and a half feet and everything was ruined. He couldn’t imagine practicing law there, but then every office around him was in the same mess. Giving up was not an option, and each passing day brought a small improvement.

Late in the afternoons, as the sun was fading and the air was somewhat cooler, he checked on his neighbors and helped clear debris and make repairs. Almost everyone was checking on someone else. The damaged homes were too hot to sit in, and so they gathered under shade trees that were still standing. Joe Humphrey, three doors down, had somehow smuggled in a case of beer from a National Guardsman, who also sent a bag of ice, and the cold Falstaff had never tasted so good. The neighbors shared everything—beer, cigarettes, food, water, encouragement, and stories.

They had survived. Others were not so fortunate, and much of the gossip on the street was about those who died.

The Rudy Law Firm reopened on October 2, some six weeks after Camille. Jesse spent most of the first day using his new phone to badger his insurance adjuster. The company, Action Risk Underwriters, was based in Chicago and was one of the four largest insurers on the Coast. In the weeks following the storm, it became apparent to Jesse that ARU and the others were stonewalling all claims and had no intention of honoring the policies in a forthright manner. Their blanket denials were simple: The damages were caused by water, not wind.

When the courthouse reopened for business on October 10, Jesse marched in and filed fourteen lawsuits on behalf of himself
and his neighbors. He sued the four largest insurance companies, demanding full payment, plus punitive damages for bad faith. He had been threatening to sue for weeks and the companies would hardly return his phone calls. With at least 20,000 flattened or seriously damaged homes, their exposure was enormous. Their strategy was taking shape. They would deny all claims, sit on their money, drag out the process, and hope most policy holders wouldn’t have the means to litigate.

Meanwhile, folks were trying to survive with tarps over their heads and plywood over their windows. Many homes were uninhabitable and their owners were camping in their backyards. Others were living in tents. Still others had been forced to flee and had moved in with friends and relatives throughout south Mississippi. In the woods north of town, an entire community, nicknamed Camille Ville, sprung up overnight and a thousand people lived in tents and campers. Most of them owned valid insurance policies but couldn’t find an adjuster.

Jesse was angry and on a mission. When he filed the first wave of lawsuits, he tipped off the
Gulf Coast Register
and happily sat down for an interview. The next day he was on the front page and his office phone began ringing. It would not stop for months.

In terms of making money, the cases were not valuable. In 1969 the average home in Harrison County was assessed at $22,000. Jesse and Agnes had paid $23,500 for theirs four years earlier, and a contractor had estimated its storm damage to be $8,500, not including furniture. His first lawsuits were in that range, and all of them were for wind damage. He had inspected each of the homes and knew damned well that they had not been damaged by the storm surge. In one testy exchange with an adjuster, he had explained that the water damage occurred in a downpour after the roof was blown off. Camille dropped ten inches of rain in twelve hours. Remove the roof and everything below gets soaked. Indeed, with nothing but flimsy plastic tarps as protection, every good rainstorm brought new adventures for the homeowners.

The insurance company denied the claim anyway.

He filed the simpler cases first. The more complicated ones would involve both wind and water damage, and he would pursue those later. There were plenty to choose from. Word spread quickly and clients were pouring in. He was getting much more than he bargained for and worried about covering the overhead. But, that had been a constant worry long before Camille. The second mortgage from his campaign two years earlier had not been fully paid off.

He had little time to worry and there was no turning back. He had cornered the market on Camille cases and was filing a dozen each week. He worked eighteen hours a day, six days a week, and had entered another zone where nothing mattered but the cause. With Keith back in college, for his senior year, and Agnes holding the family together, he was seriously understaffed. His teenage daughters, Beverly and Laura, were at the office after school and often into the night trying to keep the files organized.

To the rescue came the Pettigrew boys, two brothers from Bay St. Louis. Their father had been found dead in a tree the day after Camille. The family home, fully insured, was half a mile from the beach and damaged so severely that it was uninhabitable. Their mother was living with a sister in McComb. The insurance company, also ARU, had denied the claim.

The brothers, Gene and Gage, appeared to be twins but were eleven months apart. They looked alike, sounded alike, dressed alike, and had the odd habit of finishing each other’s sentences. They had graduated from law school together at Ole Miss the previous May and opened up a small shop in Bay St. Louis. Camille blew it all away, everything. They couldn’t even find their diplomas.

Their tragedy had made them angry and they were looking for a fight. They read about Jesse Rudy, and marched into his office one day and asked for employment. Jesse liked them immediately, promised to pay them whenever he could, and on the spot inherited two fresh new associates. He dropped what he was doing,
locked them in the conference room for a training session, and taught them the exciting ins and outs of reading insurance policies. They left at midnight. The following day, he sent Gage to Camille Ville to meet with some new clients. Gene began intake sessions with the daily drop-ins.

Other lawyers along the Coast were taking similar cases, though nowhere near the volume of Jesse Rudy. They watched him carefully and curiously. The general feeling among the bar was to move somewhat slower, allow Rudy to go first, and hope he nailed the companies in the first series of trials. Maybe then the insurers would come to the table and settle the claims fairly.

For Jesse, the litigation was not without risks. It was clear that water from the storm surge had destroyed many of the homes, especially those close to the beach. Prevailing on those claims would be difficult. If he lost at trial, the insurers would not feel as threatened and would deny even more aggressively. His reputation was on the line. His clients were hurting, often irrational, and not only expecting justice but some retribution as well. If he failed to deliver for them, his career as a trial lawyer would be over and he might as well hide in his office and draft deeds.

If he won, though, and won big, the rewards would be plentiful. He would not get rich, not by winning $8,000 claims, but at least his cash flow would improve. Hammering the insurance companies into submission would bring publicity that no amount of money could buy.

By the end of the year, there was a feeling of outright hatred for the insurance companies. Jesse wanted a trial, in his courtroom in Biloxi, and pushed hard for one. The opposition was formidable. The insurers had wisely decided to hire the big firms in Jackson to defend them, staying away from the Coast lawyers. Jesse had filed over three hundred lawsuits in the circuit court of Harrison County. It was nothing short of a bonanza for the defense firms, and they used every tool and trick available to delay and bury him with paperwork.

The Pettigrew boys proved up to the task and learned more about litigation and discovery in three months than they would have in five years on their own. They urged Jesse to keep filing. They would slog through the mail, keep the files orderly, and fire back at the defense firms.

During the small office party two days before Christmas, Jesse surprised everyone by announcing that he was promoting Gene and Gage to junior partners. Their names would go on the letterhead. The sign out front would now read:
rudy & pettigrew, attorneys at law
. It was more of a symbolic move than anything else. Real partnerships split the fees, of which there were few.

Judge Nelson Oliphant, age seventy-one, took the bench, pulled his microphone closer, and looked at the crowd. He smiled and said, “Good morning, ladies and gentlemen. What a nice turnout. Not sure I’ve ever seen such a crowd for a motion hearing.”

Jesse had packed the courtroom with his clients and told them that under no circumstances should anyone smile about anything. They were angry, frustrated, and ready for justice. They were fed up with the insurance companies and their lawyers, and they wanted Oliphant, one of their own from Harrison County, to know they meant business. He would soon be up for reelection.

At the plaintiffs’ table, Jesse sat between the Pettigrews. On the other side, packed around the defense table, were at least a dozen well-tailored Jackson boys with associates and secretaries seated behind them in the front row. Somewhere in the pack were insurance executives.

Oliphant said, “Mr. Rudy, you may proceed.”

Jesse stood and addressed the court. “Thank you, Your Honor. I’ve filed several motions for a hearing today, but I would first like to address the issue of some trial dates. I have at least ten cases ready
for trial, or I guess I should say I’m ready for trial.” He waved an arm at the defense lawyers and said, “Looks like these guys’ll never be ready. Today is February the third. May I suggest that we set some cases for trial next month?”

Oliphant looked at the defense squad and at least four of them stood. Before they could speak he said, “Wait a minute. I’m not going to listen to all you guys say the same thing. What’s your first case, Mr. Rudy?”

“Luna versus Action Risk Underwriters.”

“Okay. I believe Mr. Webb is lead counsel for ARU. Mr. Webb, you may respond.”

Simmons Webb stood and took a few steps forward. “Thank you, Your Honor,” he said properly. “I appreciate the opportunity to be here in your court today. My client certainly understands the wishes of the plaintiffs to hurry things up and have a trial, but we are entitled to complete the discovery process. I’m sure Mr. Rudy understands this.”

Jesse, still standing, said, “Your Honor, we’ve finished discovery and we’re ready for trial.”