Miss. High Court Considering Wind v. Water Case

A decision is pending from the Mississippi Supreme Court in another wind vs. water case, this one involving a Pascagoula home subjected to 6.3 feet of storm surge.

The National Flood Insurance Program paid Jackson County sheriff’s deputy Michael Robichaux and his wife, Mary, who has since died, policy limits for the loss of their home and its contents – $136,500 for the home and $70,400 for contents.

At issue is whether Nationwide Mutual Fire Insurance Co. owes the Robichauxes any money for wind damage. Nationwide says no, but for different reasons than the company used when offering arguments in June 2009 during the landmark Katrina case Corban vs. USAA insurance company.

Nationwide claims the Robichauxes had no wind damage, despite paying homeowners on each side for wind losses. Alternately, Nationwide argues,

FIP has already fully reimbursed the Robichauxes and Robichaux can’t collect twice for the same loss.

Attorneys for the Robichauxes – state Rep. Brandon Jones and state Sen. David Baria – say the Robichauxes are entitled to at least $60,000 for wind damage under the Nationwide policy.

A special judge, Billy Bridges, was brought in to try the case in Jackson County Circuit Court because all the local judges recused themselves. Bridges granted Nationwide’s pretrial motion for judgment in its favor.

The Robichauxes appealed.

They want a jury to decide if Nationwide should compensate them for wind damage. They also want extra damages from Nationwide because they believe the insurance company breached its duty to deal fairly with them and pay their claim in a timely fashion.

Bridges issued his ruling three days before the Supreme Court decided the Corban case. Nationwide had been allowed to make arguments before the Supreme Court in Corban, using the same attorneys now involved in the Robichaux case, Christopher Landau of Washington, D.C., and Mitch Cowan of Jackson.

During the Corban arguments, Landau said the company owed nothing for wind damage if storm surge then washed through and finished off a house and its contents. The Nationwide policy, he persistently told the justices, had been rewritten to preclude payment in these cases after Hurricane Camille.

Insurance companies inserted a clause in their policies saying flood damage was excluded from coverage even if another peril – wind in this case – contributed “in any sequence” to the loss. Landau reasoned the clause absolved Nationwide from covering wind losses that were preceded, or even followed, by storm surge.

In an exchange, Justice Randy Pierce asked Landau: “The example is, 95 percent of the home was destroyed, the flood comes in and gets the other 5 percent and you know that. Does your interpretation of the word ‘sequence’ mean that you pay zero?”

Landau responded, “Yes, your honor.”

In Corban, the court decided, Mississippi law requires insurance companies must prove a hurricane’s tidal surge, rather than wind, caused a loss to deny coverage. Wind and water are separate forces, the court reasoned, that cause different types of damage. Wind damage is covered under an all-perils policy.

In the Robichaux case, Landau argued, storm surge caused all the damage to the home, based on expert reports.

Under pressure from the Mississippi Department of Insurance, Nationwide re-evaluated losses involving wind and water in November 2007, more than two years after Hurricane Katrina, and subsequently offered the Robichauxes a check for $37,266.66 to cover wind damage under their policy.

The policy specifically includes a hurricane deductible, which Jones argues is completely at odds with the cause excluding coverage for water damage, regardless of the sequence of events. Jones argued the clause should be stricken because of this ambiguity.

Under the heading, “Hurricane Coverage” the Nationwide all-perils policy says: “Coverage under this policy includes loss or damage caused by the peril of windstorm during a hurricane. It includes damage to a building’s interior or property inside a building caused by rain, snow, hail, sand or dust if direct force of the windstorm first damages the building causing an opening through which the above enters and causes damage.”

One of the justices wanted to know why the Robichauxes didn’t just take the check offered to them after the re-evaluation.

If Nationwide had offered the money initially, Jones said, there would be no case. But he said the Robichauxes had pleaded with Nationwide, in two separate letters, to look at their case again and pay the claim.

Surely, they thought, there had been an oversight.

“That fell on deaf ears,” Jones said.

The Robichauxes filed their lawsuit 14 months before Nationwide offered them a check.