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Sun-Herald: ANALYSIS Wind vs. water: Judge proved right
Biloxi-Sun Herald
By ANITA LEE
October 10, 2009
GULFPORT — U.S. District Judge L.T. Senter Jr. was right all along in his interpretation of Mississippi insurance policies, but flawed opinions that overturned his early decisions in Katrina wind vs. water disputes have been corrected too late for hundreds of policyholders who settled their lawsuits based on erroneous guidance from the Fifth U.S. Circuit Court of Appeals.
Senter, it turns out, knew Mississippi contract law better than the 5th Circuit judges who reviewed his opinions. And why shouldn’t he?
The Mississippi native spent a good part of his early career, from 1968-1979, presiding over state cases as a Circuit Court judge in North Mississippi.
Insurance companies used their geographic diversity to move Katrina cases to federal court, even though states ultimately govern insurance contracts.
The Mississippi Supreme Court handed down a landmark decision last week that validates Senter’s early rulings in Katrina cases: Hurricane wind damage is a covered loss, even when excluded tidal surge contributes.
Senter essentially said the same thing Aug. 16, 2006, as Katrina’s first anniversary approached. Senter’s ruling in Leonard vs. Nationwide was appealed, as was the opinion he reinforced in a second case, Tuepker vs. State Farm.
Policyholder attorney William F. “Chip” Merlin Jr. offered this observation Friday in a blog on his Internet site, propertyinsurancecoveragelaw.com:
“The Fifth Circuit should have allowed the Mississippi Supreme Court to decide these issues in the Leonard case, but it refused to place a certified question before the Mississippi Supreme Court at that time.”
Policyholders waited in the hope the court would act to force insurance companies to honor their contracts. More than a year dragged by before a three-judge panel of the Fifth Circuit reversed Senter’s prior ruling. In September 2007, a three-judge panel concluded that Nationwide was left “aggrieved” by Senter’s judgment, and noted the insurance company had incurred “considerable litigation expense and potential enormous liability to other policyholders” because the judge struck down the insurance companies “anti-concurrent causation clause.”
The Fifth Circuit concluded: “The only species of damage covered under the policy is damage caused exclusively by wind. But if wind and water synergistically caused the same damage, such damage is excluded.”
Less than a month later, another three-judge panel of the Fifth Circuit reinforced the ruling with the Tuepker opinion: “As the Leonard opinion directs, any damage caused exclusively by a nonexcluded peril or event such as wind, not concurrently or sequentially with water damage, is covered by the policy, while all damage caused by water or by wind acting concurrently or sequentially with water, is excluded.”
So that was that. Many policyholders gave up. It was time, they decided, to settle.
Settlement negotiations proceeded based on the Fifth Circuit’s illogical reasoning that a wind loss exacerbated by tidal surge was no covered loss at all.
Policyholder attorneys were anxious to get a case before the state Supreme Court. Corban vs. USAA was the one that went. The attorneys who handled the Corbans’ cause were experienced insurance litigators, unlike former attorney Dickie Scruggs, who led both the Leonard and Tuepker cases for policyholders.
Judy Guice, Clyde H. “Buddy” Gunn III, Richard T. “Flip” Phillips and Christopher C. Van Cleave represented the Corbans, with Guice arguing the case before the high court. The petition for appeal was filed in April 2008. More than a year passed before the case was argued.
At last, the opinion confirmed what policyholders believed all along: Insurance companies owe for coverage due to losses from wind damage because water is a separate force. Further, coverage can be denied under an all-risk policy only if the insurance company — not the homeowner — proves water caused the loss.
The Corban case will return to Harrison County for trial. Another wait begins. The Corbans and policyholders in future hurricanes will no longer fear that hours of punishing winds can be ignored once water washes onto their property.
http://www.sunherald.com/local/story/1665502.html
By ANITA LEE
October 10, 2009
GULFPORT — U.S. District Judge L.T. Senter Jr. was right all along in his interpretation of Mississippi insurance policies, but flawed opinions that overturned his early decisions in Katrina wind vs. water disputes have been corrected too late for hundreds of policyholders who settled their lawsuits based on erroneous guidance from the Fifth U.S. Circuit Court of Appeals.
Senter, it turns out, knew Mississippi contract law better than the 5th Circuit judges who reviewed his opinions. And why shouldn’t he?
The Mississippi native spent a good part of his early career, from 1968-1979, presiding over state cases as a Circuit Court judge in North Mississippi.
Insurance companies used their geographic diversity to move Katrina cases to federal court, even though states ultimately govern insurance contracts.
The Mississippi Supreme Court handed down a landmark decision last week that validates Senter’s early rulings in Katrina cases: Hurricane wind damage is a covered loss, even when excluded tidal surge contributes.
Senter essentially said the same thing Aug. 16, 2006, as Katrina’s first anniversary approached. Senter’s ruling in Leonard vs. Nationwide was appealed, as was the opinion he reinforced in a second case, Tuepker vs. State Farm.
Policyholder attorney William F. “Chip” Merlin Jr. offered this observation Friday in a blog on his Internet site, propertyinsurancecoveragelaw.com:
“The Fifth Circuit should have allowed the Mississippi Supreme Court to decide these issues in the Leonard case, but it refused to place a certified question before the Mississippi Supreme Court at that time.”
Policyholders waited in the hope the court would act to force insurance companies to honor their contracts. More than a year dragged by before a three-judge panel of the Fifth Circuit reversed Senter’s prior ruling. In September 2007, a three-judge panel concluded that Nationwide was left “aggrieved” by Senter’s judgment, and noted the insurance company had incurred “considerable litigation expense and potential enormous liability to other policyholders” because the judge struck down the insurance companies “anti-concurrent causation clause.”
The Fifth Circuit concluded: “The only species of damage covered under the policy is damage caused exclusively by wind. But if wind and water synergistically caused the same damage, such damage is excluded.”
Less than a month later, another three-judge panel of the Fifth Circuit reinforced the ruling with the Tuepker opinion: “As the Leonard opinion directs, any damage caused exclusively by a nonexcluded peril or event such as wind, not concurrently or sequentially with water damage, is covered by the policy, while all damage caused by water or by wind acting concurrently or sequentially with water, is excluded.”
So that was that. Many policyholders gave up. It was time, they decided, to settle.
Settlement negotiations proceeded based on the Fifth Circuit’s illogical reasoning that a wind loss exacerbated by tidal surge was no covered loss at all.
Policyholder attorneys were anxious to get a case before the state Supreme Court. Corban vs. USAA was the one that went. The attorneys who handled the Corbans’ cause were experienced insurance litigators, unlike former attorney Dickie Scruggs, who led both the Leonard and Tuepker cases for policyholders.
Judy Guice, Clyde H. “Buddy” Gunn III, Richard T. “Flip” Phillips and Christopher C. Van Cleave represented the Corbans, with Guice arguing the case before the high court. The petition for appeal was filed in April 2008. More than a year passed before the case was argued.
At last, the opinion confirmed what policyholders believed all along: Insurance companies owe for coverage due to losses from wind damage because water is a separate force. Further, coverage can be denied under an all-risk policy only if the insurance company — not the homeowner — proves water caused the loss.
The Corban case will return to Harrison County for trial. Another wait begins. The Corbans and policyholders in future hurricanes will no longer fear that hours of punishing winds can be ignored once water washes onto their property.
http://www.sunherald.com/local/story/1665502.html
