I’m confused. As I understood State Farm’s appellate brief in Tuepker v. State Farm, the insurer was taking that position that damage from wind is covered by a homeowners policy, as long as it is separate from flood damage and ascertainable, meaning that the policyholder can prove the extent of the wind damage. Here’s the passage I’m talking about from the appellate brief, which is found on page 18, footnote 10:
In ruling that State Farm’s anti-concurrent language is ambiguous, the court below apparently believed that if Plaintiffs’ home were damaged by flood or storm surge during Hurricane Katrina, then the lead-in language would preclude coverage even for separate and independent wind damage . . . . To the contrary, the effect of the lead-in language in such a situation is to preclude coverage for indivisible damage caused by a combination of wind and water, since such damage "would not have occurred" in the absence of water damage. Accordingly, if the evidence demonstrates that hurricane winds operating independently of water damaged Plaintiffs’ roof, that damage would be covered, even if storm surge later destroyed their entire house.
However, in a May 15 decision denying State Farm’s motion to dismiss in another case, Palmer v. State Farm, Judge Senter said as follows:
State Farm reasons that because there was water damage to the plaintiffs’ property, it is relieved of any liability under its homeowners policy even if there was windstorm damage that occurred before the arrival of the water.
State Farm’s brief in support of the motion to dismiss, in fact, says this:
It is clear that the policy contemplates a situation where there may be two or more losses to property. Pursuant to the terms and conditions of the policy, irrespective of the timing of the losses, or the number of said losses, if but one of those causes of loss is excluded . . ., then the entire loss is excluded. Here, the reality of Plaintiffs’ allegations mean that even if Plaintiffs were successful in proving that a specific portion of their property was damaged by wind to a particular degree prior to the arrival of the water, because water was in the chain of causation of the destruction of the property, including that portion damaged by wind, then the loss is not covered.
This is quite different from Judge Senter’s understanding of State Farm’s stance on appeal of Tuepker, as stated in his order certifying interlocutory appeal:
State Farm stresses that it "has not taken the position that its anti-concurrent cause language excludes separable, independent wind damage merely because there is also concurrent or subsequent flood damage."
In looking at the list of lawyers who worked on the brief in Tuepker, it appears they are different attorneys than the ones handling the Palmer briefing, and the positions appear to be opposed to each other. However, in the State Farm reply brief in Palmer, this statement is made:
Plaintiffs, based on the investigation of the damage, were owed the policy limits under the flood policy. They were paid the policy limits. The damage that was attributable to wind was paid under the provisions of the homeowners’ policy.
Remember, this is a motion to dismiss based only on the pleadings and whether they meet the relevant legal standard, so the facts of the case are not at issue, but the reply brief also mentions that Palmers were paid roughly $2,400 for wind damage to the structure and some $16,000 for contents coverage under the homeowners policy. The State Farm position in the reply brief is that the Palmers "are seeking to recover policy limits under their homeowners policy" or 1 1/2 times the value of the home, plus 1 2/3 times the value of their contents. That makes some sense, and Senter agreed with this in part in his ruling, saying that by accepting the flood money, the Palmers agreed with State Farm that that much flood damage had occurred. However, he said, any uncompensated value in the home is still theoretically available under the wind coverage of the homeowners policy. Because the factual issue of how much, if any, uncompensated value exists is not one that can be decided in a motion on the pleadings, he denied the motion.
Along the way to denying the motion, however, Judge Senter fired off a few classic Senterisms — extraordinarily blunt assessments of what he is reading — including calling the insurer’s position on the Palmers’ alleged "Concealment of Fraud" that voids the flood policy "utter nonsense." His position on the anti-concurrent language is now unmistakably clear, if it wasn’t already:
This provision of the homeowners policy is so poorly drafted and is couched in such confusing terms that I doubt it would support the interpretation State Farm is urging the Court to accept even if its ambiguities were resolved in favor of State Farm.
That’s it for this post, except I do want to include the response brief by the Palmers, which I thought was extremely well done, even if at times it read more like a closing argument than a response to a motion on the pleadings. It was easy and fun to read.