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Supreme Court ruling satisfying for Guice

Judy Guice

Judy Guice

For many Katrina victims, insurance decision came too late to help with financial problems


To Judy Guice, the recent landmark ruling by the Mississippi Supreme Court was personal.

It established that homeowner insurance policies cover wind damage from hurricanes when water contributes to the loss.

A Biloxi attorney, Guice lost her Ocean Springs home to the devastation wrought by Hurricane Katrina in 2005.

She also was part of the legal team that represented a Long Beach couple, whose home, like thousands of other Gulf Coast residents, was destroyed by a combination of wind and water from the storm.  Margaret and Magruder Corban sought recovery under their homeowner’s policy for damage to the first floor of their home, arguing that it was damaged by wind before the arrival of the storm surge.

A favorable ruling by the high court in Corban v. United Services Automobile Association was particularly satisfying for Guice.

“It was real personal for me after losing my home and seeing what others had to go through with that kind of loss,” she said.  “I think it’s a really good decision that will be in place the next time a disaster like Katrina happens again.’

Mississippi Insurance Department commissioner Mike Chaney agreed.

“It’s a good decision and I applaud the court for making this decision,” said Chaney. “This ruling will help us settle future claims in a more timely manner and avoid lawsuits. Many of the insurance commissioners across the nation have encouraged the (insurance) industry to come up with a solution to the anti-concurrent clause.  I am one of those.”

With the ruling, the court rejected previous opinions regarding the anti-concurrent cause (ACC) clause, which is used to override a damage claim from a covered cause such as wind when an event such as a flood occurs in the same time period.     

Appellant attorney Richard “Flip” Phillips, who was also a part of the Corban legal team, says the unanimous opinion clears up a lot of questions for homeowners in Mississippi and the nation.

“This ruling bodes well for individuals and business owners, and reinforces the importance of contract law,” he said.  “Homeowners can depend on their contracts of insurance only if the courts are willing to enforce those contracts.”       

Calling the ruling “bittersweet,” Phillips says the opinion came too late for many Gulf Coast homeowners who settled earlier lawsuits against insurance companies based on an “erroneous” ruling from the 5th U.S. Circuit Court of Appeals.

He added that property owners could no longer afford to make payments on destroyed homes while trying to rebuild their lives after the catastrophic effects of the storm.  Many 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.

“Thousands of residents whose homes were destroyed by Katrina have been forced by economic circumstances to settle their insurance claims early due to the previous ruling,” he said.  “This opinion is important to victims of future disasters, both in Mississippi and throughout the nation.”

The Corbans had filed an appeal with the state Supreme Court last June, arguing that the 5th Circuit decision upholding and applying ACCs “effectively reverse decades of this Court’s precedent in hurricane cases and deprives Mississippi homeowners of essential insurance coverage.”

Magruder Corban, a Long Beach surgeon, asserts that the ACC in its policy was ambiguous and contrary to public policy.  The downstairs portion of his family’s home was damaged by Katrina’s winds before the storm surge arrived, and Corban said that although he’s pleased by the decision, the road to recovery has been difficult.

“It’s been a long process, something that has dragged on for some time but we are happy about the court ruling in our favor,” Corban said.  “We’ve done what we’ve had to do and are prepared to move forward with our case.”

Corban declined to comment further on the case and referred a reporter to his attorneys.  

Rep. Gene Taylor (D-Miss.), who also lost his home to the ravages of Katrina, said the decision shifts the burden of proof to the insurance companies. He called it a victory for all South Mississippians.

“We know, for a fact now, that in almost every instance, (insurance companies) said the water did it and made the national insurance policy pay,” Taylor said.   “And if you notice, the national flood insurance plan lost billions of dollars that year.

“The insurance industry made $44 billion the same year.”

USAA spokesman Paul Berry said the company was “pleased” by the court’s ruling that confirmed the company’s approach to handling Katrina claims in Mississippi, adding “USAA has always paid for damage solely caused by wind.”

For Chaney, the issue regarding insurance coverage is broader than punishing property owners for choosing to live on the Gulf Coast and other coastal regions across the nation.

“Nearly 60 percent of people in this country live near the water, and that includes the Great Lakes region,” he said.  “This (issue) isn’t about a scenic view – there are important industries and government installations such as Stennis (Space Center) and Keesler (AFB) that employ thousands of people that live and work on the Gulf Coast and elsewhere.” 





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