Judge Denies Miss. Couple New Trial on Storm Surge Coverage

A federal judge says he won’t order a new trial for a Pascagoula, Miss. couple whose lawsuit against their insurance company was the first case to be tried in Gulfport after Hurricane Katrina spawned hundreds of similar lawsuits.

U.S. District Court Judge L.T. Senter Jr. refused to change his ruling in August that Nationwide Mutual Insurance Co.’s policies do not cover damage from a hurricane’s storm surge, or wind-driven water.

Senter, who heard the landmark case without a jury, also said he sees no reason to order a new trial for Paul and Julie Leonard, who sued Nationwide after the company only paid them $1,661 for more than $130,000 worth of damage to their home.

“Judge Senter’s action … is appropriate and keeps in tact the original decision that Nationwide acted appropriately in adjusting the Leonard’s claim,” Nationwide spokesman Joe Case said.

Zach Scruggs, one of the Leonard’s attorneys, said he is considering an appeal of Senter’s decision

Richard “Dickie” Scruggs, Zach’s father and law partner, had asked Senter to reconsider his ruling, which also held that insurers must pay for any damage from hurricane-force winds.

The Leonards’ lawyers argued that Nationwide’s policies are ambiguous and therefore can’t be enforced because “storm surge,” or wind-driven water, isn’t specifically excluded from coverage.

Senter rejected that argument, however. The judge said the flood exclusion in the company’s policies applies to rising water from a hurricane.

“Substantially identical policy exclusions were considered and applied during litigation following Hurricane Camille, and none of the courts who considered this language found it to be ambiguous or otherwise unenforceable,” Senter wrote, referring to the major storm that hit the Gulf Coast in 1969.

In August, Senter ordered Nationwide to pay the Leonards about $1,228 more than what the Columbus, Ohio-based company already had paid them for wind damage. That money, which Nationwide paid on Monday, will be held by the court pending the outcome of any appeal.