Posted by: Business Law EBooks | October 9, 2009

NEWS FLASH; Mississippi Supreme Court Rules in Nationally-Watched Anti-Concurrent Cause Case

NEWS FLASH; Mississippi Supreme Court Rules in Nationally-Watched Anti-Concurrent Cause Case

October 08, 2009


Katrina Homeowners Insurance Litigation:

Mississippi Supreme Court rejects Fifth Circuit Tuepker/Leonard Katrina AntiConcurrent Cause Clause Interpretation

October 8, 2009


See Full Opinion:

Today’s Corban opinion by a unanimous Mississippi Supreme clears up a question of tremendous importance to homeowners across the country. More and more people live in coastal and other areas subject to catastrophes such as hurricanes or earthquakes. Homeowners can depend on their contracts of insurance only if the courts are willing to enforce those contracts. The Corban case has been watched by courts and legal scholars throughout the nation. Today, the Mississippi Supreme Court rejected the Fifth Circuit “Erie guesses” of the Tuepker and Leonard opinions regarding the Anti-Concurrent Cause (ACC) clause. Today’s opinion says homeowners “all risk” policies mean exactly what policyholders across the Gulf Coast, as well as legal scholars across the country, have said from day one: (1) Concurrent means concurrent, i.e. at the same time, and (2) In “all risk” policies like those sold today, it is the insurance company’s burden to prove what part of the loss was caused by an excluded peril (water in the case of a hurricane). The ACC clause does not relieve an insurance company of its obligation to establish causation if it seeks to exclude coverage for part of the loss caused by water. (The four-year Katrina ACC odyssey is covered in the below post from earlier this year.)


Attorneys for Dr. and Mrs. Magruder Corban (from left to right):  Buddy Gunn, Judy Guice, Richard (Flip) Phillips, and Christopher Van Cleave.






The Corban victory is “bittersweet” because thousands of Gulf Coast residents whose homes were destroyed by Katrina have been forced by economic circumstances to settle their insurance claims over the past four years under an erroneous interpretation of the law. Thousands of honest, hard-working homeowners, who prudently purchased all risk homeowners policies, have settled their claims for fractions of the amounts due under the contracts of insurance. This opinion is of tremendous importance, however, to victims of future disasters both in Mississippi and throughout the nation. Today’s opinion by a unanimous, 9-0, court is based on solid precedent and application of long established rules of insurance contract construction that apply in every state. It is impossible to overstate the significance of today’s opinion by the Mississippi Supreme Court.


July 27, 2009

[Posted August 2009]

Legal scholars, insurance companies, and homeowners throughout the nation await the ruling on one of the most-watched State Court Oral Arguments in the U.S. – the June 9, 2009, en banc argument of Corban v. USAA before the Mississippi Supreme Court.  See “Hot Supreme Court Case,” Mississippi Bar News, July 21, 2009. At issue in Corban is the Anti-Concurrent Cause (ACC) Clause which the insurance industry used to deny coverage to thousands of Gulf Coast homeowners following the 2005 Katrina catastrophe.

Gulf Coast attorneys Judy Guice and Buddy Gunn and SmithPhillips partner Richard (Flip) Phillips represented Dr. and Mrs. Magruder Corban, whose home, like those of thousands of other Coast residents, was destroyed by a combination of wind and water in the storm. The case carries significant consequences for insured victims of future catastrophes throughout the nation. Appearing as Amici Curiae in the case were the American Insurance Association, the National Association of Mutual Insurance Companies, State Farm Fire and Casualty Company, Allstate Property and Casualty Ins. Co., National Mutual Fire and Nationwide Property and Casualty Ins. Co., as well as United Policyholders and the Mississippi Attorney General.

The Katrina ACC nightmare began for the Corbans and thousands of Gulf Coast residents when they returned to the Mississippi Gulf Coast after Katrina to find their homes destroyed by a combination of wind and water. Using the ACC clause, State Farm, Nationwide and other insurers denied homeowners’ claims under all-perils policies when water (storm surge) acted “concurrently or in any sequence with” wind to cause the damage. The Federal Courts backed the insurance companies’ effort in Leonard v. Nationwide, 499 F.3d 419 (5th Cir. 2007).

SmithPhillips initially challenged the effort to deny coverage seeking class certification on behalf of some 2,000 homeowners whose homes were reduced to slabs. See NATIONAL LAW JOURNAL, Jan. 23, 2006: Katrina’s Second Wave: Class Action against Insurer, Guice v. State Farm Fire and Casualty Co., 1:06cv1-LTS (S.D. Miss.).  The lower Court denied class certification in Guice, however, and the Fifth Circuit Court of Appeals denied the request for an interlocutory appeal.  The Guice case, which sought actual and punitive damages for post-Katrina modification of the ACC “wind-water protocol,” subsequently settled prior to depositions of home office personnel involved in the post-Katrina “editing” of State Farm’s ACC procedure.

The Fifth Circuit’s Leonard (mis)application of the ACC clause was roundly criticized by legal scholars throughout the nation. Thousands of Mississippi homeowners, however, could no longer afford to make payments on destroyed homes while trying to rebuild their lives. They were forced, as a practical matter, to settle claims through “mediation” or otherwise for a fraction of what should have been paid had the ACC clause been applied to the hurricane “wind-water” conundrum appropriately.

Finally, in the case of Dr. and Mrs. Magruder Corban, the Mississippi Supreme Court was afforded the opportunity to address the ACC issue. Jurisdiction in Corban, unlike the vast majority of Katrina cases, was in state rather than federal court.  Addressing cross-motions for summary judgment, the lower court reluctantly followed the Fifth Circuit “Erie-guesses” in Leonard v. Nationwide and Tuepker v. State Farm.  “Pursuant to Leonard and Tuepker,” the Court stated, “the ACC clause will be applied [and] the Corbans may not recover for any damage caused by . . . . a combination of water and wind.”

The Guice/Gunn/SmithPhillips team re-assembled to address the issue.  A Petition for Interlocutory Appeal was filed with the Mississippi Supreme Court and on May 16, 2008, the Supreme Court granted the Corbans’ Petition.  The ACC issue was briefed by the parties and by Amici from throughout the nation.  On June 9, 2009, the case was argued before the Mississippi Supreme Court en banc in the new Supreme Court building in Jackson, Mississippi.

At Oral Argument, the Court zeroed in on the application of the ACC discussed by the Fifth Circuit in Leonard and Tuepker.  Granted authority to argue for Amici, Nationwide’s attorney explained precisely how the insurance company interpreted the “in sequence” language of the ACC clause with regard to Katrina hurricane damage.  Given the example of a home that is first 95 percent destroyed by wind, and then subsequently washed away by storm surge, the insurance company’s response was it owed nothing under the ACC:

“JUSTICE: I’m giving you – the example is 95 percent of the home is destroyed, the flood comes in and gets the other five percent, and you know that. Does your interpretation of the word ‘sequence’ mean you pay zero?



It is too late, as a practical matter, for thousands of victims of Katrina who were denied the recovery to which they were entitled by misapplication of the ACC clause by the insurance companies adjusting Katrina claims. The claims of thousands of Mississippi policyholders were assigned to one federal judge who was instructed by the Fifth Circuit to apply the ACC clause as interpreted in Leonard and Tuepker.  Thousands of other financially-strapped homeowners settled their claims in Department of Insurance mediation in which the claims were “negotiated” by insurers from an erroneous ACC position. The post-Katrina handling of the insurance catastrophe in the federal system may eventually come under the same scrutiny as did FEMA’s handling of the natural disaster.

The Mississippi Supreme Court, however, in the widely-watched Corban case, has the opportunity to set forth the correct interpretation of the Anti-Concurrent Cause clause.  The case is important to homeowners throughout America.  Katrina-type catastrophes will occur again – indeed, with increasing frequency as populations continue to increase in coastal and disaster-prone areas.  Hopefully, the Mississippi Court’s ruling in Corban v. USAA will restore the application of long-established rules of contract law to policies of homeowners’ insurance for the protection of prudent homeowners in the future.  We will keep you posted here at

A copy of the Appellant’s Reply Brief, discussing the appropriate application of the Anti-Concurrent Cause clause, filed on behalf of Dr. and Mrs. Corban is posted here.  For more information on the issue see: Rossmiller, David P., Interpretation and Enforcement of Anti-Concurrent Policy Language in Hurricane Katrina Cases and Beyond, New Appleman on Insurance:  Current Critical Issues in Insurance Law (2007), available at’s%20Anti-Concurrent%20Cause%20Article.pdf; and Lavitt, Joseph, The Doctrine of Efficient Proximate Cause, the Katrina Disaster, Prosser’s Folly, and the Third Restatement of Torts:  Cracking the Conundrum, 54 Loyola L. Rev. 1 (2008).  A transcript of the entire Corban argument can be found here.  The Oral Argument is available on video at SCT .

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