What is said to be the first Katrina trial in Louisiana involving State Farm began yesterday. The case is Kodrin v. State Farm, and here is a story by AP reporter Mike Kunzelman on the first day of trial. The story explains:
The eight-member jury will be asked to decide whether Katrina’s wind or floodwater was responsible for demolishing the Port Sulphur home of Michael and Judy Kodrin, who sued State Farm for denying their claim after the Aug. 29, 2005, storm.
‘That’s going to be the main issue in the case,’ U.S. District Judge Carl Barbier told a 30-member jury pool.
State Farm, which says its homeowner policies cover damage from wind but not rising water, concluded Katrina’s storm surge destroyed the Kodrins’ house and denied the couple’s claim.
The Kodrins, however, argue that hurricane-force winds destroyed their wood-frame home hours before water overtopped a nearby river levee and flooded their Plaquemines Parish neighborhood.
Before I go on, one thing perplexes me. Well, two things, actually. Maybe more than two, but let’s just say two because life is short and we have to get on with this post and end it somewhere. In a preview story on the trial, the Times-Picayune wrote:
The case will be a test of State Farm’s anti-concurrent causation clause, which the company has used to deny payment for wind damage on a home when it occurs in concert with flood damage. These controversial clauses have been the focal point of litigation in Mississippi, but State Farm insurance contracts in Louisiana are worded slightly differently.
I am not sure I can agree with the first sentence and I’m not sure I understand the second one. If you click here, you will see a copy of the certified policy attached as an exhibit to one of the summary judgment pleadings in the Kodrin case. That certified copy contains the exact same anti-concurrent cause language that is in, for example, the policy at issue in the Tuepker v. State Farm case pending before the Fifth Circuit. Either its my Adobe Acrobat display, or the Kodrin policy was copied for the court file so that only the even-numbered pages show, but look on page 10 of the policy. The relevant anti-concurrent language preceding the flood exclusion is as follows:
We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurred suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as a result of any combination of these:
If you click on this link to the Tuepker policy, which was sold in Mississippi, you will see that on page 10 of that policy the anti-concurrent language is just the same. The Kodrin Pre-Trial Order, page 11, recites the same language — minus the first sentence — and you can click here to view it. Perhaps there is some other small difference in the policy that I don’t see, but it appears the anti-concurrent cause language is unchanged.
However, under the facts of the case as outlined in the Pre-Trial Order, I do not see anti-concurrent cause language as being relevant, nor is it apparent in any way to me that State Farm denied coverage for damage to the Kodrin home based on the anti-concurrent language. I have looked repeatedly for evidence that insurers have denied coverage for Katrina wind damage on the basis that it occurred concurrently or in sequence with flood damage, and I have not found such evidence, despite the fact this is the popular conception of what has happened. I have repeated this so often I could say it while juggling knives — anti-concurrent language applies only to multiple causes of the same damage. It does not apply to single causes of single losses. Merely because a house sustains damage from two forces does not mean two forces have combined to cause a loss as defined by the policy. I do not say that this could not occur, but under the facts of every Katrina case I have examined, and it is a lot of them, alleged wind damage caused a distinct single property loss and flood caused a separate distinct single property loss. This is not an issue of multiple causation, so any analytical methodology that is used to sort out multiple causes of the same damage is not appropriate. This means anti-concurrent cause language is not relevant, nor is the default standard, the efficient proximate cause analysis, relevant.
Instead, this case looks to me like many, many others. State Farm denied coverage based on its assertion that the damage was caused exclusively by excluded flood. It said it found no credible evidence of wind damage to the home, which was built on piers and was destroyed by a 12-foot flood surge. Now, this means that there is an issue of who has the burden of proof about the wind damage: does State Farm have to show that no wind damage at all could have occurred, or do the policyholders have to show that wind damage occurred? Let me reiterate that the question of who must prove the existence or non-existence of wind damage is as different from the question of concurrent causation as lightning is different from a lightning bug. Nothing about the issue of allocation of proof implicates a causation analysis — no matter which view you hold, it does not affect your analysis of whether two forces combined to cause the exact same damage, or whether two forces acted separately to cause distinct and different damage.
I am not there on the scene, of course, and I don’t have time to do a bunch of interviews, which in any case would probably just freak out the policyholders and the attorneys for both sides without producing a lot of information to me, so I must check my assumptions about the case through the materials available — the stuff filed on the court’s docket. Here is the complaint in the case.
And here is State Farm’s motion for partial summary judgment on the issue of offset: State Farm points out that the Kodrins accepted the limits of their flood policy, which belies their assertion that the house was destroyed by a tornado. The value of the home was considerably in excess of the value of the flood policy, so it is possible that covered wind damage exists above the figure paid for flood damage. It seems undeniable, however, that the Kodrins have agreed by accepting the flood money that at least that amount of damage to the home was due to uncovered flood. In all this stuff, I once again don’t see anti-concurrent language being asserted.
So with all that being said, we will have to wait and see how this trial turns out. Whether State Farm or the Kodrins will be found to have the correct position on allocation of the burden of proof I do not know, but I fail to see how this trial has anything to do with the State Farm anti-concurrent cause language.
UPDATE: I originally misattributed the second news story mentioned above, the preview of the trial, to Mike Kunzelman of the Associated Press. The story I was referring to originally appeared in the Times-Picayune, which I should have know because I e-mailed the story to someone earlier yesterday. I’ve also fixed the link so it goes back to the Times-Picayune story rather than the version that went out on the wire.