Opinion ID: 1560116
Heading Depth: 1
Heading Rank: 8

Heading: In Any Sequence

Text: ¶ 38. This Court interprets the term in any sequence to mean sequentially. The term sequentially is defined as 1. Forming or marked by a sequence, as of notes or units. Webster's II New College Dictionary at 1008. See also Garner, A Dictionary of Modern Legal Usage at 795 (`[s]equential' means `forming a sequence or consequence.'). ¶ 39. If a contract contains ambiguous or unclear language, then ambiguities must be resolved in favor of the non-drafting party.... Exclusions and limitations on coverage are also construed in favor of the insured. Language in exclusionary clauses must be `clear and unmistakable,' as those clauses are strictly interpreted. Martin, 998 So.2d at 963. Relatedly: [w]here the policy is subject to two interpretations, equally reasonable, that which gives the greater indemnity to the insured will prevail. If one construction, looking to the other provisions of the policy, and to its general object and scope, would lead to an unreasonable result, such construction must be abandoned, and that construction adopted which will be more consistent with reason. In all cases the policy must be liberally construed in favor of the insured, in order to accomplish the purpose of the insurance. Southern Home Ins. Co. v. Wall, 156 Miss. 865, 127 So. 298, 299 (1930). ¶ 40. The term in any sequence is contained within an exclusionary clause for water damage losses. The term is undefined in the policy. As loss occurs at that point in time when the insured suffers deprivation of, physical damage to, or destruction of the property insured[,] see ¶ 31 supra, this term cannot be used to devest an insured's right of indemnity for a covered loss, as such an interpretation conflicts with other provisions of the USAA policy. For instance, Section I Conditions regarding Insurable Interest and Limit of Liability provides that, in any one loss, USAA will not be liable for more than the amount of the insured's interest at the time of loss.... See Appendix (emphasis added). Moreover, Section IConditions regarding Loss Settlement states that USAA has the option of paying the cost to repair or restore the property to the condition it was in just before the loss. Id. (emphasis added). Additionally, the Replacement Cost CoveragePersonal Property section states that  [r]eplacement cost means the cost, at the time of loss. ... Id. (emphasis added). Finally, the Loss Settlement provision within the Special Coverage on Jewelry, Watches, Furs and Silverware section provides that [t]he value of the covered property ... will be set at the time of loss or damage [,] and that USAA has the option of paying the cost to repair or restore the property to the condition it was in just before the loss. See id. (emphasis added). ¶ 41. These provisions irreconcilably conflict with the in any sequence language, thereby creating an ambiguity. Our precedent requires this Court to construe an equally reasonable interpretation in favor of the nondrafting, insured party (the Corbans). Wall, 127 So. at 299. Therefore, this Court concludes that the in any sequence language in the policy may not be used to devest the insureds of their right to be indemnified for covered losses. See Martin, 998 So.2d at 963; Wall, 127 So. at 300 (if [t]he two clauses of the policy are so conflicting that they cannot stand togetherone must give way to the other; and, under the principles stated, the provision most favorable to the insured must be upheld.).
¶ 42. As aptly stated by the circuit judge, simple rules learned in middle school or high school English classes dictate that the ACC clause applies only to losses caused by water damage. As such, with respect to the water damage exclusion, based upon the factual scenario presented to this Court, we conclude that the ACC clause should be read as follows: SECTION IEXCLUSIONS 1. We do not insure for loss caused directly or indirectly by [water damage]. Such loss [from water damage] is excluded regardless of any other cause or event [wind damage] contributing concurrently or in any sequence to the loss [from water damage]. (Emphasis added.) See also Dickinson v. Nationwide Mut. Fire Ins. Co., 2008 WL 1913957, at -4 (S.D.Miss.2008). ¶ 43. In assessing the applicability, vel non, of the ACC clause, we reiterate that different perils from a hurricane generally, but not without exception, result in separate damage and loss. The policy establishes a duty to indemnify for covered direct physical losses under Coverages A, B, and C. The ACC clause applies only if and when covered and excluded perils contemporaneously converge, operating in conjunction, to cause damage resulting in loss to the insured property. If the insured property is separately damaged by a covered or excluded peril, the ACC clause is inapplicable. If damage is caused by a covered peril, the insured is entitled to indemnification for the covered loss, as the insured's right to recover for the loss has vested. See Bland, 629 So.2d at 589; Pitts, 931 F.2d at 358. Conversely, if the damage is caused by an excluded peril, the insured is not entitled to indemnification for that uncovered loss. ¶ 44. Based on the evidence thus far presented, the same loss with multiple causes is not at issue here. Thus, a finder of fact must determine what losses, if any, were caused by wind, and what losses, if any, were caused by flood. If the property suffered damage from wind, and separately was damaged by flood, the insured is entitled to be compensated for those losses caused by wind. Any loss caused by [flood] damage is excluded. If the property first suffers damage from wind, resulting in a loss, whether additional [flood] damage occurs is of no consequence, as the insured has suffered a compensable wind-damage loss. Conversely, if the property first suffers damage from flood, resulting in a loss, and then wind damage occurs, the insured can only recover for losses attributable to wind. ¶ 45. In Dickinson, the federal district court astutely found that any loss in which the excluded peril of flooding plays no part is outside `the loss' to which the ACC applies. Dickinson, 2008 WL 1913957, at . This Court finds the analysis of the federal district court in Dickinson to be salient: the damage done by wind and wind-driven debris during Hurricane Katrina is a loss that is covered by the Nationwide homeowners policy, and any additional damage done by the rising waters incident to the storm is not a covered loss. In this situation, the anti-concurrent cause provision is not applicable and does not come into play because each force causes its own separate damage independent of the damage caused by the other even when the same item of property is damaged by both forces acting separately and sequentially. Wind and water are separate and not concurrent causes of the damage to the insured property. Dickinson, 2008 WL 941783, at  (emphasis added). ¶ 46. We conclude that the ACC clause has no application for losses caused by wind peril. An insurer may not abrogate its duty to indemnify for such loss by the occurrence of a subsequent, excluded cause or event, a position advanced by amicus Nationwide. According to Nationwide, the loss occurred in the same event, which they contend was the hurricane. Nationwide unconvincingly posits that loss is not determined until the hurricane is over. [22] Nationwide contends that any loss which the storm surge would have caused anyway is excluded. Such an interpretation fails to consider the common understanding of loss, and would avoid payment for covered losses, an unreasonable result. Such an interpretation is contradicted by the principle that all [e]xclusions and limitations on coverage are ... construed in favor of the insured. Martin, 998 So.2d at 963. ¶ 47. The parties to this action agree that the ACC clause has no application to different losses caused by different perils. This Court finds that within the context of this case, under Coverages A, B, and C, any loss caused by damages resulting from wind is a covered loss, while any loss caused by damages resulting from the storm surge is an excluded loss. Applying the ordinary and popular meaning[,] Noxubee County, 883 So.2d at 1165, of the terms loss, concurrently, and in any sequence, the ACC clause is inapplicable. We are in accord with the district judge in Dickinson, who stated: [i]t is clear to me that storm surge flooding cannot be a cause (directly or indirectly) of damage that occurs before the storm surge flooding reaches the insured property, i.e. before the excluded peril of flooding occurs. ... Wind damage that precedes the arrival of the storm surge and damage that happens after the storm surge arrives are separate losses from separate causes, and not concurrent causes or sequential causes of the same loss [.] ... Wind damage that precedes flood damage happens in a sequence of events, but the wind damage is not caused, directly or indirectly, by storm surge flooding, and the damage done by the wind is therefore not a part of the loss the ACC refers to. Since the ACC does not apply to this separate wind damage, the wind damage is a covered loss. The insurance benefits that apply to this covered loss vest in the insured at the time the loss occurs. See [ Pitts, 931 F.2d at 351; Bland, 629 So.2d at 582]. Wind and flood were separate and not concurrent causes of damage to the insured property, and the wind damage that precedes the storm surge does not contribute, sequentially or concurrently, to the [excluded] loss caused by storm surge flooding and referred to by the ACC. Dickinson, 2008 WL 1913957, at -4 (emphasis added). ¶ 48. After a thorough examination of Mississippi caselaw, the evidence presented to date in this case, the briefs of the parties and amici, and the USAA policy at issue, this Court declares the ACC clause inapplicable. We respectfully reject the proposition that, under the subject ACC clause,  indivisible [ [23] ] damage caused by both excluded perils and covered perils or other causes is not covered. [24] Tuepker, 507 F.3d at 354 (emphasis added). We neither agree nor find support for an analysis focusing on damage rather than loss, or the premise that storm surge flooding which inundates the same area that the wind, acting independently, previously damaged constitutes indivisible damage or the same damage.... See Tuepker, 507 F.3d at 354; Leonard, 499 F.3d at 431. Only when facts in a given case establish a truly concurrent cause, i.e., wind and flood simultaneously converging and operating in conjunction to damage the property, would we find, under Mississippi law, that there is an indivisible loss which would trigger application of the ACC clause. Neither the parties nor amici in the case sub judice have offered a factual basis to support a concurrent cause here. ¶ 49. We conclude that the circuit judge correctly interpreted the ACC clause, but then erred in applying the Fifth Circuit's  Erie -guess regarding its application. The ACC clause is inapplicable here. All direct physical losses under Coverages A, B, and C which are caused by wind are covered. All direct physical losses under Coverages A, B, and C which are caused by [flood] damage are excluded. Any [flood] damage losses to which a covered peril (in this case, wind) contribut[ed] concurrently are excluded. As this presents issues of fact for jury determination, we next consider the applicable burden of proof.