Federal appeals courts to hear key Katrina insurance lawsuit

Special to the Herald-Guide

August 08, 2007 at 10:45 am  | Mobile Reader | Pring this storyPrint 


Associated Press Writer

NEW ORLEANS (AP) - A federal appeals court is poised to review a judge's verdict last year in the first trial among hundreds of lawsuits that Mississippi homeowners filed against insurance companies in Hurricane Katrina's aftermath.

The 5th U.S. Circuit Court of Appeals in New Orleans is scheduled to hear arguments Monday from lawyers on both sides of the groundbreaking case, which pitted a Pascagoula, Miss., couple against Nationwide Mutual Insurance Co.

In August 2006, U.S. District Judge L.T. Senter Jr. ruled that Nationwide policyholders Paul and Julie Leonard aren't entitled to payments for damage from Katrina's storm surge because the insurer's homeowner policies don't cover damage from rising water.

The Leonards had estimated the total damage to their home at $130,253. The Columbus, Ohio-based company only paid the couple $1,661, blaming the rest of the damage on storm surge.

Senter, who presided over the trial without a jury, ordered Nationwide to pay them an additional $1,228 for wind damage.

Although Senter's ruling was viewed as a major victory for the insurance industry, Nationwide appealed a portion of the verdict that challenged a key provision in the company's policies.

Nationwide and other insurers say their homeowners policies cover wind damage, but not in cases where the damage stemmed from a combination of wind and water.

Senter said this so-called ``anticoncurrent causation'' provision is ambiguous and, therefore, can't be enforced.

Nationwide is asking the 5th Circuit to overturn that portion of Senter's ruling, which could affect hundreds of other cases brought by Gulf Coast policyholders.

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