I’ve had a chance to re-read Judge Senter’s opinion, and I have considered Dickie Scruggs’ claim that his clients, the Leonards, won the case. About that, I have this to say: If Scruggs was Custer’s lawyer, he’d claim the Seventh Cavalry won the Battle of the Little Big Horn because the Sioux failed to drive Custer off the battlefield.
Let’s remember what this case was primarily about. It was about Paul Leonard’s claim that his Nationwide agent, Jay Fletcher, told him the Nationwide policy covered all damage from a hurricane, and Nationwide was bound by Fletcher’s representations. It is hard to believe, as I have said before, that any experienced agent would make such a claim, when the policy clearly says otherwise and when Nationwide sent notices out with policies making clear no flood coverage existed. It is especially hard to believe because, as Judge Senter found, the reason Leonard asked Fletcher whether he needed flood insurance in the first place was because Leonard had heard public discussions about how homeowners policies do not cover floods. (Again, here is a link to Senter’s opinion. I have had some trouble getting the court’s link to open this morning. This link from the Biloxi Sun Herald may work better).
Let’s also remember the closing argument of another of the Leonards’ attorneys, Don Barrett: "Jay Fletcher has gotten himself in a jam and he’s trying to lie his way out of it. If Jay Fletcher had been hooked up to a lie detector, you could have heard it ringing all the way to Memphis."
So what did Senter find out about Fletcher’s alleged misrepresentations? As I pointed out yesterday, Senter said Fletcher never claimed the Nationwide policy covered flood damage. Although Leonard may have inferred such coverage existed, Senter said, he was mistaken and did not inquire sufficiently to test whether his understanding was correct. Senter also said that: 1. Leonard was on notice of the lack of flood coverage in homeowners policies; 2. Leonard actually read the terms of Nationwide policy; and 3. If Leonard believed the policy covered floods, he shouldn’t have.
Senter also found that Fletcher, in telling his customers outside the most flood-prone areas that they need not purchase flood insurance, was only stating his opinion. Senter expressly said these opinions were not tied to any representation of fact, and that what is not a representation cannot be a misrepresentation. Someone who calls that a win for the Leonards is probably a big fan of the Washington Generals and New York Nationals in their longtime rivalries with the Harlem Globetrotters.
Senter upheld the Nationwide policy’s flood exclusion without breaking a sweat. In addition, the anti-concurrent causation exclusion in the policy was not an issue because Nationwide wisely did not insist on the most extreme interpretation: that all covered damage would be excluded if it occurred at the same time as uncovered damage, even if the damage was different. Senter gave a strong signal he will not accept that interpretation in future cases, and he has previously found a similarly worded exclusion in a State Farm policy to be ambiguous. Nationwide agreed that damage attributable to wind would be paid, because wind is covered under the policy, while damage solely due to flooding would not be paid. That is the basis for Senter awarding roughly $1,000, rather than the $130,000 the Leonards sought: some relatively light wind damage to the roof and upper story occurred, while the bottom story was flooded with five feet of water.
In addition to all that, if Scruggs and the Leonards won, what is this guy so mad about?
A final point: I feel sorry for Paul and Julie Leonard. It is a terrible thing to lose your home, and I have never rooted against the Leonards. At the heart of almost all coverage disputes, there is some great destruction or other human suffering, and I never forget that. Nevertheless, when analyzing coverage, which is a very complex area of law where lapses in attention or judgment often produce serious mistakes, it is best to try to set aside sentiment and spin as much as possible to focus your thoughts.