OMG, Nowdy went to Plato’s Cave looking for the illusion of coverage in anti-concurrent causation (but don’t start any rumors, she has three children)

Talk about having doubt about the meaning, what do you make of this?

I was looking through my Bloglines feedreader last night under my folder labeled “anti-concurrent cause,” and saw this really good post from the Slabbed blog.   This is a fascinating discussion not only of Katrina damage, but of the theory of illusory insurance coverage.  It’s old, now, the post, from the nostalgia file, but it is still worth talking about.

I thought Sop was “illusionating” when he told me about the reference; but, the compliment is real and so is later disclaimer:

So I can’t agree with the premise presented, both by the author, nowdoucit, and quoted material from policyholder lawyer Chip Merlin, that anti-concurrent cause language is in any way ambiguous or illusory.

My first response, however, is neither ambiguous nor illusory.  It’s simply a thank you to David Rossmiller for opening a timely discussion on anti-concurrent causation and another thank you to Chip Merlin for holding up his end of the conversation and our shared position.

Disagreeing with the premise, however, is contrary to fact established in Dickinson v Nationwide.

Nationwide contends that the ACC provision precludes recovery for wind damage to any item of insured property that was later damaged by storm surge flooding. Nationwide contends that because wind damage preceded the damage from storm surge flooding, and therefore occurred in a sequence of events, the “in any sequence” language in the ACC invalidates the plaintiffs’ claim for wind damage. In other words, Nationwide takes the position that the ACC policy provision applies to exclude coverage for any wind damage that preceded damage from the excluded peril of flooding…

The ACC clause operates to preserve the listed exclusions in the event some other factor operates with the excluded peril to cause a loss. The ACC is not operative and has no application to damage that is in no way caused (directly or indirectly) by an excluded peril.

Since no one knows that better than David Rossmiller and I’ve never suggested “illusory coverage”  would or could be “found in anti-concurrent cause language of a policy”, I, too, think it’s time to explore what can’t be seen in the shadows of  Plato’s Cave.

…the ordinary objects we see around us…in the visible realm it give birth to light and its sovereign; in the intelligible realm, itself sovereign, it provided truth and intelligence…the man who is going to act prudently in private or in public must see it”

It’s easy to get lost in Plato’s Cave without a flashlight. Fortunately, I keep this one handy.  Many centuries after Plate wrote the allegory, Montessori, Piaget, Vygotsky and others began to theorize how intelligence develops and expressed similar thought.  The “visible realm” – what we can see, smell, taste and touch – is the truth that shapes our intelligence.  Higher levels of intelligence develop, in turn, with exposure to increasingly challenging experiences.

If Katrina was in your visible realm, you saw the light and found the truth of hurricane damage. In fact, I contend that Sop, who roof surfed his family to safety in Katrina’s surge, reached genius level in hurricane intelligence.  The windstorm of a hurricane is not a shadow on the wall of Plato’s cave – although one young Katrina survivor did describe the windstorm as the bitch that took Barbie.

Instead, IMO,  it was the language of anti-concurrent causation theory that was developed in a cave; and the language that makes it a shadow – a walking shadow:

…a poor player that struts and frets his hour upon the stage and then is heard no more.

David Rossmiller sees the language of anti-concurrent causation outside the cave and his definition is what Plato called a form.

A Form is an objective “blueprint” of perfection. The Forms are perfect themselves because they are unchanging. For example, say we have a triangle drawn on a blackboard. A triangle is a polygon with 3 sides. The triangle as it is on the blackboard is far from perfect. However, it is only the intelligibility of the Form “triangle” that allows us to know the drawing on the chalkboard is a triangle, and the Form “triangle” is perfect and unchanging. It is exactly the same whenever anyone chooses to consider it; however, the time is that of the observer and not of the triangle.

The reality of a triangle is a shape with three sides; just as the reality of the windstorm of a hurricane includes two independent, separately occurring events – first, the wind and, then, the water that can lead to flooding.

However, those who looked at the windstorm of a hurricane from Plato’s cave saw illusions of exclusions – shadows that when examined outside the cave could not be proven to be reality;  leading, in turn, to illusions of coverage.

Thus, the message I took from Plato’s allegory:

  • David Rossmiller is a bright light who sees beyond the shadow cast by the dim bulb that constructed the language of anti-concurrent causation.

However, a bright light provides a different view from that of a dim bulb; and, something that can be seen in more than one way is ambiguous.

16 thoughts on “OMG, Nowdy went to Plato’s Cave looking for the illusion of coverage in anti-concurrent causation (but don’t start any rumors, she has three children)”

  1. Good analogy. I’m not much of a Platonist. We don’t live in Plato’s world. We live in Thomas Hobbes’ world. Civil society breaks down if words have no meaning. Concurrent does not mean “in any sequence” and we can’t allow insurance layers to make it so. Coverage for windstorm losses cannot be allowed to exclude windstorm losses.

  2. Thank you, Brian. Speaking of Hobbs, entering Plato’s Cave was “a great leap in the dark” for me and I really needed my flashlight to distinguish the shadows and forms.

    When anti-concurrent causation is correctly defined, it is not a difficult concept to understand and apply.

    The only possible explanations for the way the Nationwide defines and applies anti-concurrent causation are: (1) the person with the related authority is a “slow learner”; and/or (2) there is and never was an intent to provide coverage for wind damage.

    I’m certain the same applies to other companies, too, but Ive been reading active Nationwide cases and they left me wondering if Dickinson was an illusion.

    Judge Senter appears to be routinely sending all of their cases to arbitration. Ordinarily, that would be a pretty big hint.

  3. Here is the longstanding law in Louisiana, and I would assume the law in Mississippi is comparable. Apply these legal precepts to the ACC and see where it gets the policyholder:

    “Any limitation on coverage must be clear and express so as to inform the insured that it must take special measures to obtain other protection.” Hebert v. First American Insurance Company, 461 So.2d 1141 (La. App. 5th Cir. 1984).

    “LSA-R.S. 22:628 mandates that insurance contracts be written. LSA-R.S. 22:634 provides that insurance policies shall be delivered to the insured within a reasonable amount of time after its issuance. The statutes require that an insured be informed of a policy’s contents. Notice of any exclusionary provisions is essential because the insured will otherwise assume the desired coverage exists.” La. Maintenance v. Certain Underwriters, 616 So.2d 1250 (La. 1993). “Insurance policy exclusions are not valid unless clearly communicated to the insured, and an insurer who fails to comply with the statutory requirement of delivery may not rely on its policy exclusions.” Id at 1253.

  4. I suppose the “if you can’t convince them, confuse them” defense of litigation filed in the various courts has played out and we’ll see these and similar citations more often.

    Great to have this information – hope Texas has this protection, too.


  5. I think they’re pretty standard insurance basics and don’t vary much from state to state.

    The point is that the analysis that should be made first is whether the insured was put on clear notice of what this ACC meant. Insurance agents simply did not do so. They don’t understand it, insureds don’t understand it, adjusters don’t understand it, it was so unclear to State Farm that it had to create a Wind Water protocol to explain the ACC to its claims folks, most lawyers did not know what it was or that it was in policies until after Katrina, and courts have been wrestling with the meaning and how to apply it.

    So, how could the ACC be “clear and express” as required by La. law, at least.

  6. One fine Grecian evening Plato and a group of his students were seated around a rock on the shores of the Aegean Sea. (They had taken an Awayday from Athens.) After a while the discussion centred round teeth

  7. Steve, JMHO I’m convinced Rossmiller sees the distinction between the accurate meaning of anti-concurrent causation versus the meaningless policy language and the application of same to claims handling process.

    I tried to make that point when writing the “meaning of the allegory – which I intended as a compliment as I’m big fan of his writing/thinking on causation theory.

    I do sometimes think if he were fluent in the language of south Mississippi / southeast Louisiana he would recognize the ambiguity (others likewise, too, after a lawyer friend of mine from out-of-state said we should issue passports!)

    As to the visit with /tour of the SLABBED you suggested – it would benefit everyone associated with the insurance industry – or could if done the right way – so maybe he and others will take you up on the invitation to “look the horse in the mouth”

    I love the story you told – so how many teeth does a horse have?

  8. I agree the ACC clause in the h/o policies are all vague and ambiguous and thus, unenforceable.

    However, even if not vague or ambiguous, the bigger issue deals with the way the insurance companies, namely State Farm, instructed their adjusters to apply it.

    I and a number of other attorneys have run into adjusters testifying that “the fact flooding occurred means that anything that happened in advance of the flooding is irrelevant, i.e. no coverage.” Remember, exclusions are to be interpreted narrowly and no in a way that leads to absurd results. This interpretation which SF admits now is incorrect, is a broad reading and leads to the most absurd of all results, i.e. an exclusion taking away coverage for covered losses.

    Lastly, the ACC is really a burden shifting mechanism that will be invalidated under La. law at some point based on La.R.S. 22:658.2. The idea was for the insurer to be able to say “we dont know and can’t tell, so you, the policyholder, lose.” This runs contrary to well established burden of proof principles that apply to all-risks policies.

  9. What an interesting set of thoughts, NRB.

    What happens to the cases that were unpaid, settled for less than due, or dismissed with prejudice due to what just can’t be called “an error”.

    On a fairly regular basis since Katrina, there have been news stories, etc with figures on the number of Katrina claims settled by the various insurers and the amount paid – (usually to imply the extent of litigation has been blown out of proportion and take a shot at “greedy trial lawyers).

    There’s never any data on things such as amt paid as % of amt of coverage purchased.

    So, I usually read one of those pat-me-on-the-back pressers and start thinking about people who got locked into some sort of low ball arrangement and came out of Katrina without a house or the money to rebuild.

    Since State Farm has made that admission, what has been done to address the years of deficient payment and who is overseeing the effort?

  10. I agree 100% that even when you factor in settlements and trial verdicts, the insurance companies will pay out less than they really owed. First, the legally incorrect rulings out of the Eastern District that a homeowner’s insurer gets an offset for flood monies coupled with the Road Home debacle provided insurance companies with sources to skirt their obligations.

    Many policyholders simply chose to not pursue their claims and instead turned to Road Home. It would be interesting if we could establish fraud and somehow get around the 2 yr. prescriptive period.

    I don’t think there is much you can do other than litigate the cases that are still out there and hopefully, deter future non-sense and mis-representation of policy coverages in future storms.

  11. ” love the story you told – so how many teeth does a horse have?” Nowdy

    I hate to admit I really don’t know, but I’m sure Brian could ask Steve P in his office. I’m pretty sure he is one of the few people who could find out without having to look the horse in the mouth. He is somewhat of an expert on the subject.

  12. I thought the clock starting running after you established fraud, but maybe that’s only the RICO clock, NRB.

    Tell me more about the flood offset rulings. We’ve had some here. Have also had the peculiar notion advanced that accepting flood payment was admission of flooding under NFIP definition and I don’t believe that is at all correct. I looking for more information on both issues.

  13. I like your point on the regional differences on language. This adds to the real point which is infact the falacy of Rossmillers analysis of the concurrent clause. He fails to accurately guage how the consumer views the contract. It might be that the years of legal training has lead to an inability to view things from the average man’s perspective? A lawyer can after years of studing a subject believe it is easy to understand and not realize the difficulty the concept holds for consumers.

    For example, most would hold no issue in understanding the following legal phrase due to its common usage.

    We the people of the United States, in order to form a more perfect union,…

    Yet it is infact a phrase which is impossible to implement. Why? More perfect. Can’t be more perfect can you… Something to do with superlatives I think.
    But the author used this diversion from proper english inorder to have people understand what he was trying to convey.

    I would venture to say that legal writers who developed the concurrent clause for our Katrina related HO policies did not do so to illuminate the concept to the public but to shield the concept from the consumer. They did not follow the standard for the language. This makes it invalid. Can’t do it. A fair Judge like our Judge Sentor will not allow such games to be played in his Court and those who overturned his ruling did so in a manner which actually validated his ruling. Nice work Nowdy.

  14. The Eastern District judges, without any legal analysis and flat out ignorance of basic legal principles that apply to contract claims, has simply ruled the h/o insurer gets credit for amounts paid under flood policies.

    I asked the question “Would you give them credit for Road Home, what about family gifts/donations?” The answer would be “No”. Yet, my client pays a premium for flood insurance and you give them a credit? Its an absurd proposition that the judges bought hook, line and sinker.

    This doesn’t include the inherent conflict of interest when the WYO also serves as the h/o insurer.

    I had a state court case at the La. Supreme Court on the issue and it languished for 6 months before the Supremes simply remanded without doing anything. The state courts have been uniform that there is no offset. I wish I had more state court cases to push the issue, but I don’t so I’m stuck.

  15. My understanding that the Eastern District stands alone in that regard Mr NRB as neither we nor the Western District allow NFIP offsets.

    You are new here and this topic is topical to David Rossmiller’s blogging on behalf of his firm’s client Allstate while Weiss v Allstate was ongoing in Judge Vance’s courtroom. We’ve done a good bit of writing on that topic, especially after Oxford lawyer Tom Freeland arranged for his blog to cover one of his criminal cases known here as Beef Plant.

    In both cases I think these gentlemen pushed the limits of legal ethics and then some though I note Mr Freeland beat a very hasty retreat after one of the northern district judges fired a warning shot across his bow at an ethics panel well in advance of the related trial date.

    Here is the link to a post on this subject I posted last year here at slabbed.


  16. The offset rulings out of the Eastern District are so infuriating because the judges don’t do what you would expect them to do, i.e. analyze the issue and apply the state substantive law.

    What you get in every one of their rulings is a purposeful ducking of the legal analysis and a conclusion “insurance policies are meant to indemnify ergo h/o insurer you get a credit.”

    Really? What about the statutory duties defined in the La. Insurance Code that state pay what you owe under the policy within 30 and 60 days?

    What about the fact insurers must initiate loss adjustment within 30 days of the loss being reported? In almost every Katrina case I have handled, especially the Lexington cases where they now admit they delayed the h/o loss adjustment to see what the insured got from their flood insurer, the h/o insurer violated the 30 day loss adjustment rule. The penalty is pretty much capped at $5,000.00 for this violation under La. law so for the insurer its a no-brainer, i.e. take the $5,000.00 penalty in exchange for a credit of enormous proportions like in Weiss ($5,000.00 vs. $350,000.00).

    I have argued over and over again, the same conduct that constitutes bad faith cannot be rewarded. Also, if you want to argue indemnity, indemnity means pay what you owe under the contract, not “don’t pay what you owe because the insured depleted his wealth to secure additional coverage that you put forth $0 to secure.

    I shake my head and laugh every time an offset ruling is released. Its better than crying…

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