Corban V USAA Makes the News

We first mentioned this case here, which recapped the various 5th Circuit Court of Appeals rulings on anti concurrent causation. The importance is that the 5th Circuit follows state law and legal precedent in insurance cases. Since virtually all the cases have been tried in federal court the opportunity for the Mississippi Courts to speak for themselves on wind water issues has been very limited. Anita Lee reports on Corban V USAA, which originated in the Harrison County Circuit Court and now finds itself waiting legal clarification with the Mississippi Supreme Court due to inconsistencies between the Tuepker and Leonard decisions.

Circuit Judge Lisa Dodson followed the 5th Circuit’s ruling in the case (ostensibly Tuepker), but said a common-sense reading of the insurance clause indicates to her that only water damage is excluded from coverage. Her ruling will stand unless the Supreme Court agrees to decide the issue.

As we pointed out earlier this case has the potential to reverse some or all of the 5th circuit’s rulings thus far on anti concurrent causation which is precisely what attorneys for the Corbans are arguing, that anti concurrent causation is ambiguous and thus invalid.

Attorneys for Long Beach policyholders Magruder S. and Margaret Corban want the court to determine how the policy should be applied before the case is tried in state court. The 5th U.S. Circuit Court of Appeals has ruled that “anti-concurrent cause” clauses in insurance policies bar coverage when wind and water act in sequence to destroy property.

The Corbans’ attorneys want the Supreme Court to rule that wind damage is covered, regardless of damage caused by the independent peril of water, or throw out the “anti-concurrent” clause as “hopelessly ambiguous as well as contrary to Mississippi public policy.”

The Corbans contend that wind destroyed their property before the storm surge arrived, but USAA says the surge washed out the first floor of the home, with only mild wind damage to the second floor. The Corbans have collected $350,000 in flood insurance. Their home was insured for more than $1 million. USAA has paid them almost $40,000 for wind damage to the house and an outbuilding, plus $40,000 in other coverage.

Our business friendly Supreme Court is not in the habit of handing down rulings against large corporate interests. Jess Dickinson will be an interesting vote to watch on this one. Though the US Supreme court declined to hear the Leonard appeal that decision could also be fixed absent throwing out anti concurrent causation in its entirety, which in turn will resolve the apparent conflicts between it and Tuepker. Or they could makes things more confusing, in fact worse. Stay tuned.