Sunday, December 1, 2013

In re Katrina Canal Breaches Litigation case brief

In re Katrina Canal Breaches Litigation case brief summary
495 F.3d 191 (2007)

Defendant insurers appealed the United States District Court for the Eastern District of Louisiana's orders that concluded that water damage resulting from the levee breaches during Hurricane Katrina was not excluded by their policies' flood exclusions. Plaintiff insureds argued the massive inundation of water was the result of the negligent design, construction, and maintenance of the levees and that the flood exclusions were ambiguous.

  • Even if the insureds could prove the levees were negligently designed, constructed, or maintained and that the breaches were due to that negligence, the flood exclusions unambiguously precluded recovery. 
  • One encyclopedia included the inundation of water resulting from the bursting of a levee in the definition of flood. 
  • Other definitions indicated that when a body of water overflowed its normal boundaries and inundated an area of land that was normally dry, it was a flood. 
  • That was precisely what occurred in New Orleans in the aftermath of Hurricane Katrina. 
  • A levee's failure due to negligent design, construction, or maintenance did not change the character of the water escaping through the breach; the result was a flood. 
  • The flood exclusions were unambiguous, thus, a reasonable policyholder's expectations did not have to be considered. 
  • Hurricane-deductible endorsements only altered the deductible for damage caused by a hurricane; they did not extend coverage for floods or restrict flood exclusions. 
  • The peril of negligence did not act, apart from flood, to bring about damage to the insureds' properties. 
  • Consequently, the efficient-proximate-cause doctrine was inapplicable.
The district court's orders concluding that the water damage was not excluded by the flood exclusions were vacated and the cases were remanded.

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