Opinion ID: 1435238
Heading Depth: 2
Heading Rank: 2

Heading: Anti-Concurrent-Causation Clause

Text: The Tuepkers urge this court to uphold the district court's conclusion that the ACC Clause was ambiguous. They argue that the ACC clause is unenforceable because it conflicts with other provisions in the policy, namely the express coverage for losses attributable to wind and the Hurricane Deductible Endorsement. State Farm argues that the ACC Clause is not ambiguous because it cannot be construed to have two or more reasonable meanings and it does not conflict with any other provisions in the policy. We agree with State Farm. Under Mississippi law, if the words of an insurance policy are plain and unambiguous, courts will afford them their ordinary meaning. Anglin, 956 So.2d at 859. This court has recently ruled that a Nationwide Mutual Insurance Company ACC Clause, which is similar to that in the State Farm insurance policy in this case, is not ambiguous under Mississippi law. Leonard, 499 F.3d at 430. [8] The ACC Clause and subsequent water damages exclusion at issue in Leonard read: 1. We do not cover loss to any property resulting directly or indirectly from any of the following. Such a loss is excluded even if another peril or event contributed concurrently or in any sequence to cause the loss. . . . 2. Water or damage caused by water-borne material . . . (1) flood, surface water, waves, tidal waves, overflow of a body of water, spray from these, whether or not driven by wind. Id. at 430 (emphasis deleted). The State Farm ACC Clause does differ from the Nationwide ACC Clause in that it states that the policy does not cover any loss which would not have occurred in the absence of one or more of the following excluded events. However, this difference does not introduce any ambiguity or significantly differentiate the clause from the ACC Clause at issue in Leonard. Both clearly state that excluded losses here, any loss which would not have occurred in the absence of one or more of the excluded eventswill not be covered even if a nonexcluded event or peril acts concurrently or in any sequence with the excluded event to cause the loss in question. Thus, Leonard governs this case, and compels the conclusion that the ACC Clause in State Farm's policy is not ambiguous, and should be enforced under Mississippi law. As the Leonard opinion directs, any damage caused exclusively by a nonexcluded peril or event such as wind, not concurrently or sequentially with water damage, is covered by the policy, while all damage caused by water or by wind acting concurrently or sequentially with water, is excluded. Id. Thus, the ACC Clause in combination with the Water Damage Exclusion clearly provides that indivisible damage caused by both excluded perils and covered perils or other causes is not covered. However, as State Farm has conceded in its briefs here and below, the ACC Clause by its terms applies only to any loss which would not have occurred in the absence of one or more of the below listed excluded events, and thus, for example, if wind blows off the roof of the house, the loss of the roof is not excluded merely because a subsequent storm surge later completely destroys the entire remainder of the structure; such roof loss did occur in the absence of any listed excluded peril. Furthermore, contrary to the ruling of the district court, the Hurricane Deductible Endorsement in the State Farm policy does not in any way render the ACC Clause ambiguous. The Hurricane Deductible Endorsement clearly states that a higher deductible percentage will apply for losses attributable to hurricane occurrences. There is nothing in the language of the endorsement, even when read in conjunction with the loss exclusion provisions, that expands or changes any other aspect of the policy. We addressed this issue in In re Katrina, 495 F.3d 191. There, the plaintiffs argued that similar hurricane deductible endorsements would lead a reasonable policyholder to expect their policy to cover damage resulting from a storm surge caused by a hurricane despite the fact that the policies excluded coverage for water damage. Id. at 220. [9] Applying Louisiana law, this court held that the plain language of the hurricane-deductible endorsements indicates that they do nothing more than alter the deductible for damage caused by a hurricane. Id. We also found that the endorsements do not extend the scope of the policies to cover floods. Id. See also Paulucci v. Liberty Mut. Fire Ins. Co., 190 F.Supp.2d 1312, 1322 (M.D.Fla.2002) (finding that the deductible clause did not modify the scope of the exclusion under the ACC Clause). In pertinent part, the instant Hurricane Deductible Endorsement states: The Hurricane deductible percentage . . . applies only for direct physical loss or damage to covered property caused by wind, wind gusts, hail, rain, tornadoes, or cyclones caused by or resulting from a hurricane. . . . In the event of a hurricane loss, this deductible will apply in place of any other deductible stated in the policy . . . All other policy provisions apply. Like the hurricane deductible endorsements at issue in In re Katrina, this clause clearly only applies to the deductible, and does not affect the scope of coverage under the policy. The list of enumerated perils covered by the Hurricane Deductible Endorsement only includes perils that are covered under the policy like wind, rain, and hail damage. It does not include any perils related to flooding or any peril covered under the Water Damage Exclusion. The fact that water damage is explicitly excluded from coverage and that the endorsement concludes by stating that [a]ll other policy provisions apply, unambiguously reflects that the endorsement does not enlarge or change the scope of coverage under the policy. In light of all of the relevant policy provisions, the ACC Clause is unambiguous and enforceable. We accordingly reverse the holding of the district court that State Farm's ACC Clause is ambiguous under Mississippi law.