Open mind, now – Hood’s September 2005 lawsuit against State Farm and others is the underlying legal action of discussions here and elsewhere about his recent recent settlement with State Farm.
Common perception seems to be Hood was grandstanding in 2005 and his recent settlement announcement was just his taking another bow.
Evidence suggests otherwise, however, and makes the case that Hood was standing on the law when he filed suit; but, take a look – first at the allegations Hood made in the lawsuit as summarized by the Insurance Information Institute.
Adam Scales, Washington and Lee law professor and U-Conn visiting professorformer chair of the AALS section on insurance (American Association of Law Schools), provided commentary: How Will Homeowners Insurance Litigation After Hurricane Katrina Play Out?The Key Dynamics, the Mississippi Lawsuit, and the Courts’ Likely Views.
Over a century ago, an insurance executive observed that, “the insurer proposes, but the court disposes.” As the nation reels from Hurricane Katrina and its aftermath, insurance companies and policyholders now living in shelters would do well to reflect on this fundamental characteristic of insurance law…
On its face, the Mississippi complaint is rather broad. In response to it, insurers suggest the suit is nothing less than an attempt to rewrite contracts after the fact. They note the irony that Mississippi regulators earlier approved the very agreements now claimed to be “unconscionable.”
Although it is unlikely that all of its claims will be upheld, Mississippi has a strong chance to blunt the force of the flood exclusion. For at the core of this dispute is the legal doctrine of “proximate cause.”
Proximate cause has long been the bane of law students required to learn it, and lawyers and judges required to apply it. Needless to say, it is an object of singular delight to law professors.
Proximate cause describes a relationship between events sufficient to trigger a legal consequence. So suppose a car accident leads to a rather unusual injury. The driver (and his insurer) may be liable if a court finds the injury to have been “proximately caused” by the driver’s negligence. Or suppose the “proximate cause” of a loss is something firmly excluded from insurance coverage; then the insurer is not liable…
Hoods lawsuit was filed September 15, 2005 and Scales commentary published four days later on the 19th. Almost a year later, August 2006, a New York times column, Katrina: Small Clause, Big Problem, suggests the proximate cause of problems Hood experienced with his lawsuit was the now all too familiar ACC clause.
Since at least the mid-1980’s, insurers have been putting into their home insurance policies “anti-concurrent causation’’ clauses that effectively eliminate coverage that insurers promise to provide when selling their policies. But most people skip over the legalistic language — if they read their policies at all. And until Katrina, there had never been such an outpouring of challenges.
“There’s no question that the anti-concurrent clause is bad for policyholders,’’ said Adam F. Scales, an associate professor who teaches insurance law at the Washington and Lee University School of Law, in Lexington, Va. “It’s not fair because it defeats policyholders’ reasonable expectations.’’
Insurers counter that they need the clause to protect themselves from being drawn into paying for floods, earthquakes or mudslides and other widespread calamities that are beyond their scope and that they specifically refuse to cover…
Robert P. Hartwig, the chief economist at the Insurance Information Institute, a trade group in New York, said the insurers priced their policies in the expectation that they would not be paying for damage in combination with flooding. Otherwise, Mr. Hartwig said, premiums would be much higher and some insurers might decide not to offer coverage on homes at all in certain areas…
The insurers say they spell out their terms of coverage in their policies. But even lawyers representing insurance companies say customers do not always understand the limits of their coverage.
“When you look at anti-causation language, it just doesn’t look that important,’’ said Randy J. Maniloff, a lawyer at White & Williams in Philadelphia who represents commercial insurance companies but is following insurance developments along the Gulf Coast. “They don’t appear to be words of substance. But they’re actually enormously important.’’
The insurers point out that in most states, insurance regulators approve the language in their policies. (emphasis mine)
That certainly was the case in Mississippi – and one of the reason’s then Commissioner George Dale’s close relationship with the industry became a major issue in his campaign for re-election and subsequent loss in the primary.
“The regulators look a lot more carefully at rates than they do at policy terms,’’ said Gary S. Thompson, a lawyer at Reed Smith in Washington who represents commercial policyholders but also follows home insurance issues. “It’s really the courts that cause insurance companies to go back and re-examine their coverage terms.’’
Obviously, Mr. Thompson was unfamiliar with the 5th Circuit! We haven’t seen companies re-examining their coverage terms – or their preference for the regulatory system quoted in my earlier post on Hood and the record.
While Hood’s ethics have been consistently questioned since he filed suit, what little mention I found of the the ethics of the ACC came from the highly respected Sam Friedman:
Litigation and policy debates among state and federal lawmakers have exploded over the controversial anti-concurrent-causation clauses in homeowners policies–which deny coverage for most, if not all windstorm losses when excluded flood-related damage is also involved.
Consumer advocates call the clause confusing at best, and at worst a “trap door” to deny insureds their legitimate coverage.
• Is the ACC clause ethical on its face?
• Has it been ethically-implemented by the industry in the wake of Hurricane Katrina?
• Is there anything that can be done to more fairly exclude flood damages without leaving policyholders high and dry after a windstorm catastrophe?
Have those questions been answered? I think not. Neither has the issue of regulatory change that changes law and goes undetected until a state’s chief law enforcement officer attempts to enforce the law.
UPDATE: Here’s a document that supports claims that Hood has been doing his job as the state’s chief law enforcement officer.
Great post, Nowdy!
I’m with Belle. I changed the link to the actual NY Times story itself. I did a post on it once on the old blog.
sop
Also notice this quote from insurance shill Robert Hartwig:
I hope these insurers fired their legal staffs because the “understanding” they had is not in accordance with established case law. In fact it is about as dumb as Allstate saying they were unaware they were being fined $25K a day in Missouri for contempt. I guess they don’t read their own message board at Yahoo huh? I also have some water front in New Mexico for sale.
sop
The courts have failed to recognize the industry’s own employees / contractors didn’t understand the ACC clause – much less that it was a case of regulatory changes actually changing law.
I should have included the portion of Scales commentary that predicted a literal reading of insurance contracts would probably fail.
I agree. Good post. But I disagree with the assertion because of the very nature of the argument. To win this argument one has to believe the insurer’s “sneaked” this language into the policies when AG Hood and others werent looking or that it is sooooo very deceptive that they didnt know what it REALLY meant. So far the courts have sided with the insurers (even Judge Senter agreed the flood exclusions were perfectly understandable and he has been FAR from insurer-friendly.) Yeah, ACC is a bitch to understand but it wasnt put in there the week before the storm hit. The inverse position on this would be the following: The insurers charged a premium for their policies, after a storm comes along they pay out the policy’s benefits and then come to the consumer and say “You have to pay us MORE than the original premium because we covered more than we said we were going to originally.” How would THAT have gone over?
Hood does not vet insurance policies Mr Proximo, that would be Lee Harrell and the legal staff at MID.
The ACC was approved during the Dale administration at MID. Of course he now works as a highly paid lobbyst for insurance defense firm Adams and Reese.
You can find our coverage of the goings on at the Adams family here.
sop
Thanks, and your point is well taken.
Why is it the ACC is being treated like it’s “new” if it wasn’t “sneaked in”?
The NYT article says the regulatory change took place in the mid 1980’s.
It appears it was “new” to Judge Senter – as his understanding you mentioned came after one of his cases was reversed by the 5th I believe.
It also appeared to be “new” to the 5th, btw, and a lot of judges in Louisiana.
Hood didn’t finish law school until 88 and this is only his 2nd term as AG – so it didn’t “sneak by” him, it appears that it went unnoticed by the entire legal/judicial system.
No mention of it, for example, in Scales analysis of the Mississippi case; but a comment from him two years later in the NYT article.
Are we dealing with a change in law controlling disputes over insurance contracts that was passed off as a policy exclusion/modification and implemented by regulatory change?
I’m surprised that’s legal.
How does ANY corporation “sneak” in a contractual change with several THOUSAND contracts? (Thousand being all the insurance policies in the state, MILLIONS if you consider the whole US and this clause is in all of the 50 states…) Now, if you are saying that ALL insurance commissioners and attorneys general (they are the ultimate approvers of all contracts in each state) were fooled or that this was sneaked by them, go ahead and call all of them blind, ignorant, etc. Also, since it was tried many times before Katrina (the many cases cited by the insurers prove this out,) then what were ANY of them thinking by letting it stay in these MILLIONS of contracts country wide?
Proximo, not sneak it into contracts – that was very straight forward.
We’re talking sneaking in a change in controlling law governing resolution of disputed insurance claims by making a regulatory change in contract language.
Ok, Nowdy, C’mon man. Its the same thing. How does any INDUSTRY sneak changes into a contract without all of the regulators calling foul? Are you saying that every insurance commissioner and attorney general in the us is “bought off” by the insurance industry and let this go through? Or, in the alternative, naive and ignorant of what was happening? For the last 20 plus years? C’mon man… this was something that got put into those policies due to some wild ass court decisions in california (where most wild ass stuff starts….) and the industry protected itself. NOW IF the same regulators ignored it for 20 plus years, who is to blame, the companies for protecting their interests or the regulators for not doing their jobs?
HEY, INSURANCE INDUSTRY IS IN THE INDUSTRY OF RISK — BY VIRTUE OF THE BUSINESS THEY HAVE TO ASSUME RISK BUT THEY GET ALL BENT OUT OF SHAPE WHEN THEY GAMBLED THEY LOST SO THEY CONTINUE TO UP TEH ANTE! WE ALL KNOW THAT IS HOW THE GAME IS PLAYED. YES, THEY PUT SOME AMBIGOUS LANGUAGE IN THERE, AND SAID OH DON’T WORRY ABOUT THAT! JUST SIGN ON THE DOTTED LINE!
UPDATE: Thanks for letting me get that off my chest.
The clause was old, but the State Farm interpretation was new to Katrina because the severity of the losses gave them an opening to shift the burden of proof.
After Georges, ACC was not an issue, because it was not that hard to distinguish wind damage from flood damage. Katrina left billions of dollars of losses where allocating the losses between wind damage and flood damage was difficult. Rather than try to pay fair settlements of those claims, State Farm invented a new interpretation of ACC that would put all the benefit of the doubt in the company’s favor. They sent out the Renfroe adjusters, poorly trained by State Farm, with fraudulent burden of proof instructions, fraudulent wind data from Haag Engineering, and a fraudulent interpretation of ACC. Then they knew they would need engineering reports to back them up, but could not find enough crooked engineers who would rubber stamp the Haag nonsense, so they fired the engineers who talked to eyewitnesses, or searched for wind-blown debris to the west or past the flood debris line, or actually measured the flood elevation, or photographed the direction of the snapped and uprooted trees, or otherwise made a good faith effort to determine the extent of the wind damage before the flooding. Then when they figure out that the engineers would not be silent and willing accomplises, they cancelled pending engineering reports and just used the Haag data to make the ridiculous claim that the winds were not strong enough to have caused any significant damage.
Ease up, Proximo, I said I thought the regulatory aspect of it was straight up.
Tell me more about the history, if you will, and why you think after 20 or so years it appears to be “news” in the legal and judicial system – that’s the point that I’m interested in knowing more about.
Belle, dittos to what I said to Nowdy. Yeah, its a risk business I guess but contract language in place for over 20 years? C’mon! If you have over 20 years to study, read, use ambiguous language, should it really be ambiguous any more?
So, Brian, do you think that State Farm’s Katrina-version of the ACC had an impact on policyholder claims against other companies?
.
Nowdy,
It only became news because of the notoriety of the people and the numbers of people caught up in the language. These cases have come up over the years for 4 or 5 or 20 or more insurance cases but nobody of Gene Taylor’s or Trent Lott’s or Dickie Scruggs notoriety. Or the hundreds of people as was affected by katrina’s surge and winds. The language was not news, the people and the numbers of people MADE it the news. By the way, I’m sipping a good Cabernet so I’m pretty eased up! ha ha.
Good catch Nowdy. I suppose the insurance cabal that has been alleged by many all sat around and decided how EVERYONE was going to interpret their own policy’s ACC. Funny thing about conspiracies though, how is it that so many people, with so many companies have perfectly kept their interprestations the same? All of the threats, indictment and otherwise, have failed to “crack” even the lowest of the low in the insurance company ranks. Where are all of the independent adjusters (other than the ones PAID to assume the position of their employers to be consultants) that should be crying out about what they were forced to do. Mr. Martin talks about Renfroes improperly trained adjusters but from what I read in many of their depositions, a lot of them have many, many years of experience. Renfro wasnt the only supplier of adjusters either were they? Surely SOMEBODY out there (other than the PAID sisters,) have enough honor to protest the wrongs being done…right? Are only those people who stand to make millions of dollars being honest????? Seems a little hard to swallow…thats all.
I can’t decide if you’re seeing conspiracies because you’ve sipped too much or too little!
If you got that from my comment to Brian, grab a cracker and some cheese. I wasn’t talking about a conspiracy at all – just wondering about public perception.
I’m finding out some pretty interesting things digging for the history of the ACC.
Brian had an observation he put in comment to Sop’s post on the six-figure cat adjuster that I’ll see if I can find and copy here – that she testified nothing was amiss while admitting something that was. Sorry, I can’t explain it any better.
Naw, what I meant was, for the State Farm ACC interpretation to be used by the other companies as uniformly as it has been portrayed, it would seem to have been some sort of conspiracy. My feelings are there was no conspiracy, just a uniform interpretation of established policy language that had been on the books by all of these companies for many years. Mr. Martin alleges a change in interpretation but the record has borne out there was no change. The infamous ‘wind water protocol’ was not a change in the interpretation but a generalization of what the courts had held in past litigated storm claims. IF ANYTHING, the wind water protocol was so easy to understand that if it had been used in the policies INSTEAD OF the language of the ACC, there would not be issues with the interpretation. I mean, if you read the thing, the WHOLE THING, it lays out exactly how an adjuster should delineate what needs to be paid.
send me the WHOLE THING and I’ll read it!
I found this statement, what do you think?
It is also apparent from the language of the ACCC that the ACCC is intended to exclude not only concurrent causes, but also efficient proximate causes.
State Farm is the only company that routinely paid nothing at all on slab cases until forced to by the court. The others at least made token payments acknowledging that there was some wind damage and that it was covered. The others fudged quite a bit, but did not take the absolutist position on ACC that SF took.
The Renfroe adjusters knew how to use the estimating software, but they were not trained to determine the extent of wind damage that preceded the flooding. They were trained and instructed by State Farm that they did not need to do so. King and Drain and other SF instructors and managers trained them that if they could not see physical evidence of separate and specific wind damage, it was not covered. That put all the burden of proof on the homeowner. That has never been the law or the legal precedent.
The wind/water protocol violated the contract with NFIP. State Farm has a fiduciary responsibility to represent the interests of federal taxpayers when handling NFIP claims. They had a contractual obligation to perform a proper adjustment of the combined wind and water loss. Instructing adjusters that that a property with damage caused by both wind and flooding would only be covered by the flood policy is fraud against taxpayers and policyholders. No court has ever said that flooding voids coverage of a wind loss that preceded it.
Well,Brian, I’ve been reading for hours and now know more than I thought possible about the ACC clause applied to wind and water.
How should they have determined wind damage? and, if it was inaccurately calculated in mediation, does that have an impact on the validity of mediated settlements?
I hope to get a post up tomorrow, hope you have time to read and correct my understanding if correction is needed assuming I get the post finished and up.
Got an update for us on NFIP reauthorization?
OK Nowdy, found it… it used to be readily available but couldnt find it that easy this time… here it is… What you will notice is that the section that all the naysayers continously point out (congressman Taylor and his staff in particular,) is the part about water damage when wind acts concurrently. Of course they dont mention any of the previous entries that state the adjuster should look for and pay for covered wind.
Be that as it may, when I first saw this thing pop up as an attachment to one of the suits down there, it struck me as odd that nobody was paying attention to all of the verbage. I agree it isnt entirely all rosy for everyone that reads it but it certainly does seem strange that an entire conspiracy theory was built up around one paragraph at the exclusion of the rest of the document.
Thanks, I decided you’d gulped instead of sipped and were lost for the evening.
I’ll have to copy and read as word doc but promise I will.
One interesting thing I ran into tonight was mention that flood exclusion dates back to the big Mississippi River flood in the 1920’s – I hope I marked that reference.
Headache better, now I’m worried what my brain will do with all this information as I grow older. Will I start forgetting where I put my purse but remember the “four corners” I learned tonight?
I’m going to try and compile a summary of all I read tonight and will reference your comment.
When it turns peach or tan or however the color shows up, you’ll know I put it in edit to block the quote.
Thanks again for taking the time to find and post.
While I’ve found this discussion of the ACC to be a nice trip down memory lane it really isn’t salient. Wind damage that occured before the surge arrived did not happen concurrently with any non excluded peril and is covered period. That is why SF and the others are getting their asses kicked every time this sees a courtroom.
Why? Because an insurer has a contractual obligation to adjust their claim. And simply declaring everything flood damamge and invoking ACC isn’t an adjustment of claim.
As far as the language goes even an impacted federal judge did not know the language was in their policy. Then again I doubt most people could understand the langauage anyway given it was very small print (as are most retail insurance policies) and they had to have coverage to make their mortgage company happy. I’ve have more than a few people tell me that if what their agent gave them was good enough for their mortgage company it was good enough for them. Yeah, mortgage companies too thought all the natural disaster perils we face here were covered too.
The wind water protocol Proximo posted tells the tale. It says each claim should be handled on its merits but the claims manager Lecky King somehow could not accept wind caused any damage regardless of the evidence.
Certainly handling a claim on its merits did not mean not adjusting the claim but not adjusting effectively became SF’s MO on slab cases, purposeful ignorance.
sop
One part of Proximos’ first post on this thread says it best, “Yeah, ACC is a bitch to understand . . . ”
In every single State in the U.S. (even my home state of Louisiana, which has some different laws), any ambiguity in an insurance policy is construed in favor of coverage. This is the most fundamental precept of insurance policy interpretation.
You would not believe how many different interpretations we have gotten of the ACC and Wind/Water Protocol from adjusters, managers, etc. while they are under oath. So, if the people working for the folks who wrote the policy don’t really understand it, how is someone with a fifth grade education supposed to?
Proximo, here’s a question: If the ACC is unambiguous, why was there a need for the Wind/Water protocol at all? I would think an adjuster would be able to determine if a loss is covered simply by reading the same policy language that is given to the insured.
Gotta go . . . got another State Farm adjuster getting ready to take the oath.
Mornin all. Not too much Cabernet last night so my eyes can pretty much read the post this a.m. Sop and Mr. Trahant are right… the ACC is not all that easy to understand and it apparently was put in because of how attorneys and judges have taken to “understand” other provisions of the policy. In other words, it was worded that way due to lawsuits over previous language in the policy. Like Nowdy said earlier and I think rossmiller put into one of his essays, it was enacted to counter the judicial expansion of coverage (read that as efficient proximate cause, etc) that was going on in the 70s and 80s. In other words, the policies across the nation were being re-interpreted to say to the insurers that their flood exclusions, ground movement, nuclear, etc. all of those exclusions were being thrown out by judicial caveat. The industry came up with the ACC to counter that movement and since then, it has pretty much stood up. As I said in an earlier post, the only reason it came out of the box this time was because of WHO it happened to and HOW MANY.
All that being said, Sop gets it dead on and the protocol states in plain English the way the adjusters were told to handle the claims….look for wind and pay for wind. If you find wind and water, pay for the wind damage under wind, pay for the water damage under flood. If wind and water acted concurrently to cause the SAME DAMAGE (something everyone admits pretty much did not happen,) then there is no coverage under the wind policy. The ACC clause becomes a trap ONLY when there is no way to prove which damage was which such as in slab and the pier cases. To answer Mr. Trahant, I never said the ACC was unambiguous. I said it was a bitch to understand. The 5th circuit and other courts have said it was unambiguous but as I said in the opening, that clause was written for understanding in the courts imho, not by the layman. Anyway, the WWP (wind water protocol he he) was written to “boil down” this language and give all of these “inexperienced and untrained adjusters” as Mr. Martin called them, an easier to understand step by step way of determining how to find and pay for damage. As I said, there is no conspiracy in the language of the WWP if you read the WHOLE DOCUMENT.
What I continue to believe is that most of the katrina lawsuits have truly been around the issue of burden of proof and not the ACC. I think that is a red herring brought up by the suing side to gain traction with the public. The industry apparently has felt they were on good grounds to turn the proof issue to the insured and the courts have so far not given them the carte blanche to continue to operate this way. When your supreme court eventually gets around to answering THAT question, a lot of this issue will hopefully be put to rest for the NEXT ONE.
Your right Proximo the issue will ultimately be decided by the Mississippi Supremes.
They appear bought and paid for given the statistics posted by respected corporate lawyer Alex Alston so the insurance industry appears to be in good hands there.
The only things us voters can do is curb them come election time.
sop
Based on what i read of Hood’s original accusations against the Ins. carriers at the beginning of this, and my memories of when it 1st came out, I was under the impression that his issue was the flood exclusion and the application of it to any claim. I did not remember any discussions of the ACC issues until later and reading the above it specifically talks about the application of the flood exclusion to the claims. There are many parts of any contract that one person may consider ambigious, while another person doesn’t. I think that the federal courts have already rules that the ACC language is not ambigious as they did with the flood language, and I believe the state court in LA did on the flood, but not sure on the ACC. Unsure on what the state court in MS has done also.
Based on what is in the original note on this thread from Nowdy, let’s just assume something else equally as devistating were to happen in MS such as an earthquake destroying tens of thousands of hundreds of thousands of properties. Or a nuclear accident/explosion that caused radiation to destroy the same numbers. Could Mr Hood not use the exact same language in his “Accusations” and just change the exclusion? If that were the case, what good is the contract language at all? Those two areas, like the flood exclusion language are fairly standardized withing the industry and all over the nation from state to state. Any thoughts or comments on that? i pray that nothing like that ever happens, but someday an area outside of CA will have a mother EQ and there is always a potential for a nuclear screw-up along the lines of Chernobyl to happen, or some terriost to get a suitcase nuke on US soil to do their thing.
My point was he was talking about violating the law of proximate cause and, if I had a better way of filing, I’d be able to pull up the article that contained his quote saying that.
I’ve got post on causation in drafts but ran into temporary glitch in wordpress system last night and am having Sop check it to make certain I don’t need to pull it and work on it a little more.
Back from yet another State Farm depo in which the adjuster claims never to have seen the Wind/Water Claims Handling Protocol until I presented it during the depo; I’ve lost count of how many times this has happened. Then, because this was a claim that did not involve flooding, the SF lawyer instructed the adjuster not to answer any questions about the WWP because he said it only applies to combination wind/water claims. Untrue, as the document twice references damages from windstorm only. Regardless, we could not get the Fed. Mg. Judge on the phone to resolve the issue.
This depo was kind of an “oops” as the forthcoming adjuster essentially admitted that it was wrong for a TL or TM at State Farm to decide (and document in the Activity Log) that the foundation portion of the claim fell into Losses Not Covered (excluded) BEFORE THE ADJUSTER EVEN HAD GONE TO THE PROPERTY TO INSPECT THE FOUNDATION. Good stuff, and in my opinion, par for the course on the many SF claims that were predetermined denials. I’m glad that employee put it in writing.
Proximo, I like your professional comments and I understand your analysis, but it is pretty obvious to me that you never have experienced the ACC put into action by being a party or lawyer to a lawsuit in which it is invoked. I can show you many Answers to lawsuits in which the ACC was pleaded as an affirmative defense . . . it was not brought up by me. Please correct me if I am wrong and you have been a party or a lawyer litigating a case involving the ACC.
It does not matter why the clause was inserted, what matters is whether it’s unambiguous, and if it’s not, it means nothing. The ACC is so silly and convoluted, it should be stricken and banned.
This is all hot air. Hood was paid in either cash or promises by Dickie and company. See http://legalpad.blogs.fortune.cnn.com/2008/02/08/state-farm-v-ag-jim-hood-wild-suit-wild-questions-wild-ending/ for more. Hood doesn’t give a ***** about the people of MS unsless they vote for or contribute to him This is not about big bad insurance companies, its about crooked politicos and LA and Ms have more thant their share.
Not hot air, python, but a breath of fresh air IMO when a thoughtful question is respectfully offered for discuss.
I’ve read the article you linked and went back and reviewed it when I was releasing you comment. I didn’t get the same meaning you did either time.
I’m going to link a document in the body of the post that turned up in a recent internet search. Take a look and see what you think it means.
Document now linked in post.
Hey python, can it be about big bad insurance companies and crooked politicos?
Mr. Trahant,
You’re right, I havent had any exposure to the clause in either of those fashions….but I did sleep in a Holiday Inn Express once…. jokes aside, I still feel the ACC clause does what it was intended to do…. it is to keep an insurance co. from being forced to pay by a court for something that was concurrently damaged by an excluded force. As David Rossmiller, Judge Senter, and others have said and many keep missing, the damage from Katrina was not “concurrent.” There was wind damage, then there was water damage. The trick is proving how much of each when there is next to no evidence left… and then the battle over who has to prove what.
The ACC comes up as a positive defense, has been quoted in the denial letters I have read online, etc. but I havent actually seen it “used” as a defense in court yet. Has it? I have only seen the flood exclusion tested. I know the ACC was brought up in a couple of cases there (Leonard one of them? I cant recall…) but hasnt each one of them eventually gone the insurers way when it got to the 5th circuit? I’m saying that is probably the proper position for the verbage, even though it reads like a lot of gobbledigook, but the insurers I thought have been sticking to their guns on the cause of loss and proof issues, not the ACC. I have access to pacer if you wish to direct me where to look. My mind is open on the subject (one of the perks of not having a dog in the race…)
Nationwide did not assert ACC as a defense in Leonard. The Fifth circuit emboldened them when Edith Jones slaughtered the concept in her opinion – she didn’t get it either but wrote it was not ambigious.
The ruling was the same in Tuepker though the 5th Circuit came close to getting it right.
Nationwide tried for summary judgement in Dickinson using ACC but Senter turned them down saying it did not apply. If the used the SF method to adjust the claim they will lose in Dickinson.
sop
Proximo, I think you and Sop are both correct on Leonard.
It came up in discussion of allocation/cause of loss according to what I read:
Read literally, the clause would exclude coverage where the total loss was comprised of both covered perils such as wind, and uncovered perils such as water. (The “torn roof” example I described earlier is essentially a limited exception to this rule).
Judge Senter identified several ways in which the exclusion would unfairly deprive homeowners of coverage they would reasonably expect, creating what he correctly described as “illusory” insurance coverage.
Proximo:
I’ll reply to your last posting in some depth when I get the time.
He may appreciate the break, Rick, he was up late finding the wind/water document and getting it to us – most appreciated, too, and he probably really does want to sip his wine tonight.