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wind-water action.FN6 Such cases thus do not support the Leonards' argument
that the Mississippi default rule in hurricane cases is always to allow recovery for
to pay for damages resulting from a combination of covered and excluded perils
if the efficient proximate cause is a covered peril.” (citation omitted)); Garvey v.
State Farm Fire & Cas. Co., 48 Cal.3d 395, 257 Cal.Rptr. 292, 770 P.2d 704, 710
that abrogated the default efficient proximate causation rule and excluded
damage occasioned by the synergistic action of a covered and an excluded
peril.FN8 The cases reflect the general Mississippi contract principle that “where
a clause in a contract does not violate any statute, or public policy, and is
unambiguous and certain in its provisions, it is enforced as written.” Am. Bankers'
(S.D.Miss.2001); Rhoden v. State Farm Fire & Cas. Co., 32 F.Supp.2d 907
(S.D.Miss.1998); Boteler v. State Farm Cas. Ins. Co., 876 So.2d 1067
(Miss.Ct.App.2004).
Rhoden and Boteler are particularly instructive on this score. In Rhoden, State
Farm excluded losses from earth movement (the excluded peril) under an ACC
courts have not adopted the efficient proximate causation doctrine. Id. at 912;
Boteler, 876 So.2d at 1070. Boteler and Eaker echo Rhoden's holding that ACC
clauses are enforceable, absolute bars to recovery “[w]hen a loss is caused by a
combination of a covered and specifically excluded risks.” See Eaker, 216
F.Supp.2d at 623 (quoting Rhoden, 32 F.Supp.2d at 911); see also Boteler, 876
Aug.14, 2006), a Katrina coverage case involving a concurrent-causation
provision that was before the district court on a Rule 12(b)(6) motion, the court
distinguished Eaker, Rhoden, and Boteler on the basis that “the records in [the
earth-movement] cases showed that the losses would not have occurred in the
absence of the excluded event.” Id. at *4. It is undisputed that the lion's share of
cause. For instance, in TNT Speed & Sport Center, Inc. v. American States
Insurance Co., 114 F.3d 731 (8th Cir.1997), a vandal removed sandbags from a
levee protecting a go-cart track from the waters of the Mississippi River. As a
result, the levee collapsed and river water damaged TNT's buildings. The
insurance policy covered losses caused by vandalism, but excluded flood losses,
upholding ACC clauses). See also Front Row Theatre, Inc. v. Am. Mfrs. Mut. Ins.
Companies, 18 F.3d 1343, 1347 (6th Cir.1994) (upholding an ACC clause barring
coverage for concurrently caused water losses (citing Schroeder v. State Farm
Fire & Cas. Co., 770 F.Supp. 558, 561 (D.Nev.1991))). A majority of states that
have considered the matter enforce ACC exclusion clauses. See 4 David L.
causation by statute.FN11
FN10. See Murray v. State Farm Fire & Cas. Co., 203 W.Va. 477, 509 S.E.2d 1,
12 (1998) (“We hold that, when examining whether coverage exists for a loss
under a first-party insurance policy when the loss is caused by a combination of
covered and specifically excluded risks, the loss is covered if the covered risk
section 530 as incorporating into California law the efficient proximate cause
doctrine, an interpretive rule for first party insurance.”); Western Nat'l Mut. Ins.
Co. v. Univ. of N.D., 643 N.W.2d 4, 13 (N.D.2002) (efficient proximate cause
doctrine codified at N.D. Cent.Code §§ 26.1-32-01, 26.1-32-03).
2. Public Policy
Mississippi has not adopted the efficient proximate cause doctrine as a matter of
public policy, there is no bar to Nationwide's use of the ACC clause here. Most
jurisdictions concur that ACC clauses comport with state public policy. The
Alabama Supreme Court's recent decision in State Farm Fire & Casualty Co. v.
Slade, 747 So.2d 293 (Ala.1999), is representative of this trend.
substantively indistinguishable from the one contested here. Slade held that the
occasional citation of the efficient proximate cause rule in Alabama caselaw did
not require the court to invalidate the disputed ACC clause because the rule is
not a “principle of public policy.” 747 So.2d at 314. Instead, the court adhered to
Alabama's “long-standing rule against rewriting unambiguous insurance policies
efficient proximate causation doctrine. Mississippi insurance law, in fact, lends
some support to Nationwide. Under state law, all insurance providers are
required to file “all rates, supplementary rate information, policy forms and
endorsements” with the Mississippi Department of Insurance. See Miss.Code
Ann. § 83-2-7(1). The state Insurance Commissioner must reject any rate or
of coverage, exclusions, disclaimers, definitions, and other provisions, in order to
receive the benefit of their bargain and to ensure that rates have been properly
calculated.”); see also 7 Couch on Ins. § 101:54 (“Causes that fall within the
policy coverage may be considered to be those that the insurer has assessed in
setting its premium or that the insured would have derived from the language of
Legislature to address” rather than the state judiciary. Wooten v. Miss. Farm
Bureau Ins. Co., 924 So.2d 519, 523 (Miss.2006).
The Leonards object to Nationwide's citation of the filed-rate doctrine, contending
that it “has never been held to be an absolute bar to litigation” and would
constitute “an encroachment by regulatory agencies into the court system and
For all these reasons, we conclude that use of an ACC clause to supplant the
default causation regime is not forbidden by Mississippi caselaw (including the
Camille cases which antedate such clauses), statutory law, or public policy.
Because the ACC clause is unambiguous and not otherwise voidable under state
law, it must stand.
as a term commonly understood “among residents of Pascagoula” as distinct
from a flood.FN12 Thus, the argument goes, because “[t]he literal wording of the
‘water damage’ exclusion does not contemplate the exclusion of [damage from]
‘storm surge,’ ” recovery is available. See 11 Couch on Ins. § 153:48 (“Because
exclusions are read narrowly, a policy excluding damage from some natural
policy. See Am. States Ins. Co. v. Natchez Steam Laundry, 131 F.3d 551, 555
(5th Cir.1998); Heartsouth, PLLC v. Boyd, 865 So.2d 1095, 1105 (Miss.2003).
Even so, the authority cited in support of the Leonards' proposition, Red Panther
Chem. Co. v. Ins. Co. of Penn., 43 F.3d 514 (10th Cir.1994), is less than
convincing on this score. Red Panther applied Mississippi law to a set of
clause is practically indistinguishable from provisions used in insurance policies
for two centuries, and hurricane damage is anything but novel.
Courts have interpreted water-damage exclusions like the one found in the
Leonards' policy to encompass the peril of wind-driven inundation by water, or
storm surge, for ages.FN13 Mississippi courts have upheld such exclusions
from Lake Pontchartrain ....”).FN14 Further, this court's most recent consideration
of the term “flood” also supports Nationwide's contention that the term is
unambiguous and has a concrete meaning, whether or not used in the context of
an insurance policy. See In re Katrina Canal Breaches Litigation, 495 F.3d 191,
2007 WL 2200004, at *16-*18 (5th Cir. Aug.2, 2007) (considering the term in the
(holding that wind-driven storm surge was an excluded peril under a flood
exclusion and rejecting policyholder's contention that because “the water was
made high, not by normal tidal influences, but by wind, the element insured
against, and that in driving the water against the foundations of the house, the
water was the passive and the wind the efficient force which proximately caused
FN14. See also Buente v. Allstate Property & Cas. Ins. Co., 2006 WL 980784, at
*1 (S.D.Miss. April 12, 2006) (finding that “[water-damage] exclusions are drawn
quite broadly” and clearly include storm-surge damage); Tuepker v. State Farm
Fire & Cas. Co., 2006 WL 1442489, at *3 (S.D.Miss. May 24, 2006)
(unpublished) (“ ‘storm surge’ [losses] are excluded from coverage because this
to pay for damages resulting from a combination of covered and excluded perils
if the efficient proximate cause is a covered peril.” (citation omitted)); Garvey v.
State Farm Fire & Cas. Co., 48 Cal.3d 395, 257 Cal.Rptr. 292, 770 P.2d 704, 710
that abrogated the default efficient proximate causation rule and excluded
damage occasioned by the synergistic action of a covered and an excluded
peril.FN8 The cases reflect the general Mississippi contract principle that “where
a clause in a contract does not violate any statute, or public policy, and is
unambiguous and certain in its provisions, it is enforced as written.” Am. Bankers'
(S.D.Miss.2001); Rhoden v. State Farm Fire & Cas. Co., 32 F.Supp.2d 907
(S.D.Miss.1998); Boteler v. State Farm Cas. Ins. Co., 876 So.2d 1067
(Miss.Ct.App.2004).
Rhoden and Boteler are particularly instructive on this score. In Rhoden, State
Farm excluded losses from earth movement (the excluded peril) under an ACC
courts have not adopted the efficient proximate causation doctrine. Id. at 912;
Boteler, 876 So.2d at 1070. Boteler and Eaker echo Rhoden's holding that ACC
clauses are enforceable, absolute bars to recovery “[w]hen a loss is caused by a
combination of a covered and specifically excluded risks.” See Eaker, 216
F.Supp.2d at 623 (quoting Rhoden, 32 F.Supp.2d at 911); see also Boteler, 876
Aug.14, 2006), a Katrina coverage case involving a concurrent-causation
provision that was before the district court on a Rule 12(b)(6) motion, the court
distinguished Eaker, Rhoden, and Boteler on the basis that “the records in [the
earth-movement] cases showed that the losses would not have occurred in the
absence of the excluded event.” Id. at *4. It is undisputed that the lion's share of
cause. For instance, in TNT Speed & Sport Center, Inc. v. American States
Insurance Co., 114 F.3d 731 (8th Cir.1997), a vandal removed sandbags from a
levee protecting a go-cart track from the waters of the Mississippi River. As a
result, the levee collapsed and river water damaged TNT's buildings. The
insurance policy covered losses caused by vandalism, but excluded flood losses,
upholding ACC clauses). See also Front Row Theatre, Inc. v. Am. Mfrs. Mut. Ins.
Companies, 18 F.3d 1343, 1347 (6th Cir.1994) (upholding an ACC clause barring
coverage for concurrently caused water losses (citing Schroeder v. State Farm
Fire & Cas. Co., 770 F.Supp. 558, 561 (D.Nev.1991))). A majority of states that
have considered the matter enforce ACC exclusion clauses. See 4 David L.
causation by statute.FN11
FN10. See Murray v. State Farm Fire & Cas. Co., 203 W.Va. 477, 509 S.E.2d 1,
12 (1998) (“We hold that, when examining whether coverage exists for a loss
under a first-party insurance policy when the loss is caused by a combination of
covered and specifically excluded risks, the loss is covered if the covered risk
section 530 as incorporating into California law the efficient proximate cause
doctrine, an interpretive rule for first party insurance.”); Western Nat'l Mut. Ins.
Co. v. Univ. of N.D., 643 N.W.2d 4, 13 (N.D.2002) (efficient proximate cause
doctrine codified at N.D. Cent.Code §§ 26.1-32-01, 26.1-32-03).
2. Public Policy
Mississippi has not adopted the efficient proximate cause doctrine as a matter of
public policy, there is no bar to Nationwide's use of the ACC clause here. Most
jurisdictions concur that ACC clauses comport with state public policy. The
Alabama Supreme Court's recent decision in State Farm Fire & Casualty Co. v.
Slade, 747 So.2d 293 (Ala.1999), is representative of this trend.
substantively indistinguishable from the one contested here. Slade held that the
occasional citation of the efficient proximate cause rule in Alabama caselaw did
not require the court to invalidate the disputed ACC clause because the rule is
not a “principle of public policy.” 747 So.2d at 314. Instead, the court adhered to
Alabama's “long-standing rule against rewriting unambiguous insurance policies
efficient proximate causation doctrine. Mississippi insurance law, in fact, lends
some support to Nationwide. Under state law, all insurance providers are
required to file “all rates, supplementary rate information, policy forms and
endorsements” with the Mississippi Department of Insurance. See Miss.Code
Ann. § 83-2-7(1). The state Insurance Commissioner must reject any rate or
of coverage, exclusions, disclaimers, definitions, and other provisions, in order to
receive the benefit of their bargain and to ensure that rates have been properly
calculated.”); see also 7 Couch on Ins. § 101:54 (“Causes that fall within the
policy coverage may be considered to be those that the insurer has assessed in
setting its premium or that the insured would have derived from the language of
Legislature to address” rather than the state judiciary. Wooten v. Miss. Farm
Bureau Ins. Co., 924 So.2d 519, 523 (Miss.2006).
The Leonards object to Nationwide's citation of the filed-rate doctrine, contending
that it “has never been held to be an absolute bar to litigation” and would
constitute “an encroachment by regulatory agencies into the court system and
For all these reasons, we conclude that use of an ACC clause to supplant the
default causation regime is not forbidden by Mississippi caselaw (including the
Camille cases which antedate such clauses), statutory law, or public policy.
Because the ACC clause is unambiguous and not otherwise voidable under state
law, it must stand.
as a term commonly understood “among residents of Pascagoula” as distinct
from a flood.FN12 Thus, the argument goes, because “[t]he literal wording of the
‘water damage’ exclusion does not contemplate the exclusion of [damage from]
‘storm surge,’ ” recovery is available. See 11 Couch on Ins. § 153:48 (“Because
exclusions are read narrowly, a policy excluding damage from some natural
policy. See Am. States Ins. Co. v. Natchez Steam Laundry, 131 F.3d 551, 555
(5th Cir.1998); Heartsouth, PLLC v. Boyd, 865 So.2d 1095, 1105 (Miss.2003).
Even so, the authority cited in support of the Leonards' proposition, Red Panther
Chem. Co. v. Ins. Co. of Penn., 43 F.3d 514 (10th Cir.1994), is less than
convincing on this score. Red Panther applied Mississippi law to a set of
clause is practically indistinguishable from provisions used in insurance policies
for two centuries, and hurricane damage is anything but novel.
Courts have interpreted water-damage exclusions like the one found in the
Leonards' policy to encompass the peril of wind-driven inundation by water, or
storm surge, for ages.FN13 Mississippi courts have upheld such exclusions
from Lake Pontchartrain ....”).FN14 Further, this court's most recent consideration
of the term “flood” also supports Nationwide's contention that the term is
unambiguous and has a concrete meaning, whether or not used in the context of
an insurance policy. See In re Katrina Canal Breaches Litigation, 495 F.3d 191,
2007 WL 2200004, at *16-*18 (5th Cir. Aug.2, 2007) (considering the term in the
(holding that wind-driven storm surge was an excluded peril under a flood
exclusion and rejecting policyholder's contention that because “the water was
made high, not by normal tidal influences, but by wind, the element insured
against, and that in driving the water against the foundations of the house, the
water was the passive and the wind the efficient force which proximately caused
FN14. See also Buente v. Allstate Property & Cas. Ins. Co., 2006 WL 980784, at
*1 (S.D.Miss. April 12, 2006) (finding that “[water-damage] exclusions are drawn
quite broadly” and clearly include storm-surge damage); Tuepker v. State Farm
Fire & Cas. Co., 2006 WL 1442489, at *3 (S.D.Miss. May 24, 2006)
(unpublished) (“ ‘storm surge’ [losses] are excluded from coverage because this
