Printer-Friendly

SandBar Printer-Friendly Article
SandBar 6:4, January, 2008 Litigation Update In re Katrina Canal Breaches Consolidated Liti gation, 495 F.3d 191 (5th Cir. 2007). *Sarah Spigener, 3L, University of Mississippi School of Law* On August 29th, 2005, before Hurricane Katrina reached New Orleans, the levees of the 17th Street Canal failed and caused water to inundate the area. Several homeowners sued their insurance companies seeking compensation for the loss of their property. The insurance companies objected and claimed that the damage was excluded from their policies. The Eastern District Court of Louisiana ruled in favor of the homeowners and concluded that without a specific definition included in an exclusion in the policy, the term “flood” in many of the policies was ambiguous. The court contemplated common dictionary definitions to determine that the term “flood” in some of the insurance policies referred to natural events and a “rising over,” an “overflowing,” or an “overtopping” of water. The court concluded that the insurance policies containing an ambiguous definition of “flood” were therefore required to compensate the homeowners according to their policies. The Fifth Circuit Court of Appeals, however, disagreed with the court’s decision. On appeal, the court concluded that even if the plaintiffs could prove that the construction or maintenance of the levees caused the damage to their property, the flood exclusions in the homeowners’ policies unambiguously precluded their recovery. The court held that the term “flood” included in the insurance policies was unambiguous. The court also looked to dictionaries to determine that a “flood” is defined as an “inundation of land.” The court also considered other court interpretations of similar insurance coverage as it related to the failure of structures such as dams or dikes. In these cases, the courts uniformly held that the inundation of water falls within the policy exclusions. Additionally, the court noted that the levee is a flood-control structure, designed to prevent floods, which is what happened in this case. The court also disagreed that a “flood” is limited to natural events. The court vacated the judgment of the district court and entered judgment in favor of the defendant insurance policies.
Phone (662) 915-7775 • Fax (662) 915-5267 • 256 Kinard Hall, Wing E, University, MS 38677-1848 Return to SandBar Index Page

SandBar 6:4, January, 2008

Litigation Update

In re Katrina Canal Breaches Consolidated Liti gation, 495 F.3d 191 (5th Cir. 2007).

Sarah Spigener, 3L, University of Mississippi School of Law

On August 29th, 2005, before Hurricane Katrina reached New Orleans, the levees of the 17th Street Canal failed and caused water to inundate the area. Several homeowners sued their insurance companies seeking compensation for the loss of their property. The insurance companies objected and claimed that the damage was excluded from their policies. The Eastern District Court of Louisiana ruled in favor of the homeowners and concluded that without a specific definition included in an exclusion in the policy, the term “flood” in many of the policies was ambiguous. The court contemplated common dictionary definitions to determine that the term “flood” in some of the insurance policies referred to natural events and a “rising over,” an “overflowing,” or an “overtopping” of water. The court concluded that the insurance policies containing an ambiguous definition of “flood” were therefore required to compensate the homeowners according to their policies.
The Fifth Circuit Court of Appeals, however, disagreed with the court’s decision. On appeal, the court concluded that even if the plaintiffs could prove that the construction or maintenance of the levees caused the damage to their property, the flood exclusions in the homeowners’ policies unambiguously precluded their recovery. The court held that the term “flood” included in the insurance policies was unambiguous. The court also looked to dictionaries to determine that a “flood” is defined as an “inundation of land.” The court also considered other court interpretations of similar insurance coverage as it related to the failure of structures such as dams or dikes. In these cases, the courts uniformly held that the inundation of water falls within the policy exclusions. Additionally, the court noted that the levee is a flood-control structure, designed to prevent floods, which is what happened in this case. The court also disagreed that a “flood” is limited to natural events. The court vacated the judgment of the district court and entered judgment in favor of the defendant insurance policies.