O’Bannon cites Corban transcript in Motion to Stay case against Nationwide

Honesty is the best policy – and, a hurricane policy written to exclude damage from a hurricane is honestly not the best policy.

Consequently, Counsel for O’Bannon filed a Motion to Stay O’Bannon v Nationwide pending the Mississippi Supreme Court’s decision in Corban v USAA claiming, Nationwide further showed its “true intention” of unfair and unconscionable application of the ACC to exclude coverage to its insured during questioning from Chief Justice William L. Waller, Jr.:

JUSTICE WALLER: Do you agree – Nationwide was a  party to the Dickinson case. Do you agree with Judge Senter’s ruling in that?

MR. LANDAU: No, Your Honor. We respectfully do not. We think its inconsistent with Leonard case and the Bilby case and the Tuepker case from the Fifth Circuit.

JUSTICE WALLER: Would your company have paid the  same losses that USAA has voluntarily paid in the Corban  case?

MR. LANDAU: Our company [Nationwide] has –

JUSTICE WALLER: On wind damage? On wind damage?

MR. LANDAU: Your Honor, our company would not  feel compelled by the clause by the plain language to pay.

JUSTICE WALLER: So you wouldn’t?

MR. LANDAU: Our position is that we are not  required to pay those losses. Sometime, where we believe that you can really show that these pure wind losses  covered, then we’ll pay wind losses.

But we certainly don’t believe that the Plaintiffs can  be free to go out and get whatever expert they want and  get to a jury on these kind of issues, where we carry our burden of showing that, regardless of the sequencing, the water was sufficient to cause the loss. Because we believe that that’s why these clauses — that’s the whole  point of the clause.

And, that’s the “whole point” of O’Bannon’s motion:

The “ACC” clause in Nationwide’s policy of insurance is virtually identical to the one being reviewed by the Mississippi Supreme Court in the Corban case. Because the issue of whether the “ACC” clause is applicable to and/or excludes coverage for Plaintiffs’ losses constitutes Nationwides’ defenses as to why it failed to pay Plaintiffs’ claim, the Mississippi Supreme Court’s decision on this issue is vital to the proper adjudication of this action; and staying this action until that adjudication is made is in the interest of justice to all parties, and free of prejudice…

What is clear from Nationwide’s position before the Mississippi Supreme Court is that Nationwide is using the so-called conflicts between of this Court’s decision in the Dickinson v. Nationwide; the Fifth Circuit’s decisions in Leonard, Bilby and Tuepker; and Nationwide’s own amorphous and ever-changing reasons for denial to continue to unfairly deny the claims of these Plaintiffs and other insureds.

What is additionally clear is that regardless of the previous rulings from this Court and the laws of the State of Mississippi, Nationwide continues to attempt to improperly place the burden to prove coverage on the insured, rather than accepting its burden to prove exclusion from coverage…

These positions taken by Nationwide demonstrate that the Plaintiffs would suffer hardship and inequity in being required to move forward with this litigation when the Mississippi Supreme Court will soon remove the “guesswork” regarding the validity, enforceability and application of the ACC clause to deny claims of its insureds. Plaintiffs respectfully request this Court stay this cause pending ruling from the Mississippi Supreme Court…

Notwithstanding the Plaintiffs’ request for a stay of this proceeding, the court ordered mediation in this matter is scheduled for July 8, 2009. Plaintiffs would request that any stay not effect this scheduled mediation, so that Plaintiff and Defendants may attempt to resolve this cause.

Readers may recall a similar motion was filed – and denied – in Politiz v Nationwide.  However, that was before the Corban arguments and before Nationwide’s delaying tactics were pointed out in Watson.  Hopefully, O’Bannon will prevail and Mrs. Politz will find some comfort knowing Nationwide’s claims handling practices appeared to cause  members of the Supreme Count significant distress!