SLABBED Daily – July 2

Congressman Taylor’s letter to Secretary Napolitano and video once again call our attention to the transcript of the oral arguments presented to the Mississippi Supreme Court in Corban v USAA.

A start-to-finish reading of the transcripts makes it clear that many here have spent the four years since Katrina  in an effort comparable to nailing  jello to a tree – and that Corban v USAA has given the members of the Supreme Court a taste of that struggle.

Attorney Danny Cupit, speaking for the Attorney General, provided an equally descriptive example:

…listening to the arguments of Nationwide, I’m reminded of the conversation in the  children’s book by Louis Carroll, “Through the Looking Glass,” when Alice asked Humpty Dumpty if words meandifferent things. And Humpty Dumpty said, “When I use a  word, it means just what I want it to mean; nothing more, nothing less.”

He went on to make the important point that the loss attaches at the time the cause occurs.

Now, the rule in Mississippi — and Leonard and Tuepker acknowledged this up to a point. But the rule in  Mississippi holds that, where there is a loss caused by a combination of both covered and uncovered perils, the loss is covered, not withstanding the fact that part of the loss was caused by an excluded peril. But that’s only half the story, and that’s the only half that Leonard addressed. the insurer is entitled to have the excluded cause apportioned, if it can prove what portion of the loss was caused by the excluded peril.

JUSTICE RANDOLPH: So you say the fault of the Fifth Circuit’s analysis of the slab cases, as I study those, there was a presumption that the water washed away the dwelling without any factual finding. For all I know, it blew away, and then the water washed away the debris.  But they presumed that the water washed away, in order to make the findings they did?

MR. CUPIT: Not only did they presume that, they want to — and so does Nationwide want to exclude that from the jury’s consideration.  They want an adjudication that, if you can’t tell,  then it defaults to the excluded peril. That’s the rub here.

Judy Guice picks up on a  related point a bit later and makes a significant correction:

..the policy only covers and excludes losses. It does not cover and exclude  perils. So just because flood exists means nothing. The  important and critical factor is what damage was caused by that water damage — what loss.

Excuse me, Mr. Justice Randolph, you’re so correct. It’s not damage; it’s loss. What loss was caused by the  water damage.  If they can’t prove what loss that was, they have to  pay it all.

We’ll take another bite of this jello in tomorrow’s SLABBED Daily.