A big welcome back to our readers from San Antonio with a word that y’all seem quite the legal masochists pumping meritless legal positions that will certainly insure another big verdict as happened in the Lisanby case. Anita Lee has the Sun Herald story on yesterday’s hearing at the Mississippi Supreme Court:
A USAA Insurance attorney conceded in arguments Tuesday before the Mississippi Supreme Court that insurance companies bear the burden to prove a hurricane’s tidal surge damaged a house in order to deny coverage for hurricane damage under an all-perils policy,
But policyholders also hope the high court finds that an “anti-concurrent cause” clause in homeowner policies should not be applied to hurricanes. Insurance companies cited the ACC clause to deny coverage for Hurricane Katrina’s wind damage when tidal surge, excluded from coverage, contributed to the loss. USAA claims the clause should apply in the case the Supreme Court is considering, Corban vs. USAA.
It is the first wind vs. water case argued before Mississippi’s high court. The full nine-member court heard the oral arguments, which attorneys say is unusual in a civil case. Three-judge panels generally review civil cases.
Attorney Judy Guice, arguing for the Corbans, said the ACC clause was inappropriately applied because wind and water are separate forces that cause different damage. ACC clauses in homeowner policies, she said, were meant to address damage resulting from a chain of forces, such as a leaking pipe leading to earth movement that then causes a home’s foundation to shift.
The 5th U.S. Circuit Court of Appeals has ruled that the ACC clause does apply to hurricanes, but the state’s high court has the ultimate say because insurance companies are state-regulated.
USAA attorney Greg Copeland told the Supreme Court the clause should apply, using the example of a window. If the glass could withstand pressure greater than wind or water alone could cause, but the combined forces broke the window, no coverage would exist, he said.
“We do not pay for damage caused or contributed to by storm surge flooding,” Copeland said. “That damage to the window would not have occurred but for storm surge flooding.”
Nationwide was allowed to present arguments, as an interested party. Nationwide believes the ACC clause excludes coverage, regardless of wind damage, if tidal surge was sufficient to cause the loss.
Copeland also argued that USAA should be allowed to tell a jury the Corbans received policy limits for tidal surge damage through their flood policy. Guice argued the information would be prejudicial, especially since USAA adjusted the claim for the federal flood program, which waived proof of loss after Katrina in areas subjected to tidal surge.
Guice said USAA benefitted by paying out the federal government’s money, while USAA says the jury should be told about the flood payment if the policyholders allege their damage was from wind.
Circuit Court Judge Lisa Dodson asked for the Supreme Court opinion before the Corban case is tried. Once the court decides where the burden of proof lies, if the ACC clause applies to the loss and whether evidence of the flood payment can be submitted, the case will be set for trial.
The jury will decide, based on evidence presented, whether USAA should have covered damage to the Long Beach home of Magruder S. and Margaret Corban. The Corbans collected $39,972 on a USAA policy that exceeded $1 million in total coverage.