First off, here is the link to the opinion. Let me commend the Southern District of Mississippi for finally putting stuff on their website that is available to the public, rather than requiring people to go through the federal courts’ PACER system, which is for lawyers and requires one to have an account. Here is a link to the judge’s order.
Judge Senter’s findings of fact took up more than eight pages and look solid. One of the two key findings is Number 28: "[Nationwide agent] Fletcher did not materially misrepresent the terms of the Nationwide homeowners policy to the Leonards, and Fletcher did not make any statements which could be reasonably understood to alter the terms of the Nationwide policy."
This isn’t to say that he disbelieved the Leonards. Judge Senter, who tried the case without a jury, also found that Fletcher routinely told people they did not need to purchase federal flood insurance, especially if these people were not in what is called Flood Zone A, which are areas classified at the highest risk of flooding. The Leonards were not in Zone A. (As Senter poignantly pointed out, they could have purchased up to $250,000 in coverage for just $400). Fletcher did sell some flood insurance policies to some people, but did not have flood insurance on his own residence. Senter found that when Fletcher said the Leonards did not need flood insurance, it was not because he was representing that the Nationwide policy would cover flood damage or all hurricane damage. Regrettably, Paul Leonard, according to the judge, apparently inferred that the reason he did not have to buy flood insurance was because Nationwide covered flood damage. Senter found no evidence Fletcher made his statement negligently because it was not a representation of existing fact, and was merely an opinion that therefore could not be a misrepresentation of the facts.
In Finding Number 34, Senter found that Fletcher and Paul Leonard never had any conversation about specific terms and conditions of the Nationwide policy. Finding Number 35 is the second key finding: the Nationwide policy provides coverage for wind damage but excludes flood damage, and this should have put Paul Leonard on notice that further inquiry was necessary.
The judge’s conclusions of law state that "[a]lmost all of the damage to the Leonard residence is attributable to the incursion of water" (Number 10) and that the flood exclusion in the Nationwide policy is enforceable and has been repeatedly enforced by Mississippi state courts and other federal courts. The judge awarded just over $1,000 to the Leonards for wind damage, far less than the $130,000 they sought.
As for the findings of fact, the judge was there and I was not. His conclusions about the evidence seem like a reasonable interpretation of events. The conclusions of law are pretty uncontroversial and follow from the facts. As the judge said, this exclusion has been enforced in many other cases.
This case was different than a pure coverage case over the meaning of an insurance policy and involved a special circumstance: alleged misrepresentations by an agent. Some facts of the damage are also different: the Leonards’ home remained standing, so there was no allegation that the structure had been destroyed by wind before the flooding got there, as sometimes happens. For that reason, the so-called "anti-concurrent cause" clause (what a mouthful that is) was not an issue in this case. Briefly, this kind of clause saying property destroyed by an uncovered cause does not become covered merely because it was also damaged by a covered cause. It’s simpler than it sounds.