In re Katrina Canal Breaches Litigation
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In re Katrina Canal Breaches Litigation | |
Court | 5th Circuit |
---|---|
Citation | 495 F.3d 191 |
Date decided | August 29, 2007 |
Facts
On August 29, 2005, Hurricane Katrina hit New Orleans, Louisiana.
- Property owners who turned to their insurers were denied based on coverage exclusions.
- All plaintiffs held insurance policies with "flood exclusions."
- Plaintiffs = Vanderbook, Silva, Harvey, & 4 others = "Vanderbook"
- Defendants are
- Hanover Insurance Company = "Hanover",
- Standard Fire Insurance Company = "Standard Fire" ,
- Unitrin Preferred Insurance Company = "Unitrin" ,
- State Farm Fire and Casualty Company = “State Farm”
- Defendants collectively = "Unitrin"
Procedural History
- Unitrin lost in the district court.
- State Farm won in the district court.
- The losing parties appealed.
Issues
Must a provision in an insurance contract that's un-ambiguous under the plain meaning of the language used be enforced as written?
Arguments
Vanderbrook argued that the inundation wasn't cause by a natural flood, but by a design flaw in the construction & maintenance of the levees in Louisiana.
Holding
Yes. When an insurance contract's terms are clear (un-ambiguous) under the plain meaning of the language used, those terms must be enforced as written.
- Unitrin's coverage exclusions were ambiguous (unclear).
- State Farms coverage exclusions were un-ambiguous (clear).
Judgment
Unitrin judgment is vacated; State Farm judgment is affirmed
Reasons
Judge King: If a contract language is clear & doesn't lead to absurd consequences, then the contract should be interpreted as written.
Rule
Comments
In short, these cases were a major victory for insurers.
Resources