Nationwide Appeals Technical Issues in Miss. Court Katrina Win

November 27, 2006

Nationwide Mutual Insurance Co. is appealing a landmark court decision in the first trial to challenge insurers for refusing to cover billions of dollars in damage from Hurricane Katrina’s storm surge.

Nationwide’s lawyers filed a notice of appeal Wednesday without specifying why the company is contesting the federal judge’s decision, which was widely viewed as a victory for the insurance industry.

But a spokesman for the Columbus, Ohio-based insurer said the company merely wants a federal appeals court to review “technical” portions of the judge’s ruling.

In August, U.S. District Judge L.T. Senter Jr. ruled that Nationwide’s policies cover damage from wind but not from a hurricane’s rising water. He ordered the company to pay policyholders Paul and Julie Leonard of Pascagoula about $1,228 more than what the company already had paid them for wind damage.

Nationwide spokesman Joe Case said the company isn’t challenging the monetary award or any of the judge’s major conclusions.

“Nationwide largely prevailed on the significant issues at trial,” he said. “What we’re doing is basically asking the appellate court to reconsider certain technical, legal portions of the ruling. And we expect the Leonards may do likewise.”

The Leonards sued Nationwide after the company paid them only $1,661 for more than $130,000 worth of damage to their home. The couple’s lawyers had argued that Nationwide’s policies are ambiguous and therefore can’t be enforced because “storm surge,” or wind-driven water, isn’t specifically excluded from coverage. Senter rejected that argument, however.

Zach Scruggs, one of the Leonard’s lawyers, said Wednesday that Nationwide’s appeal is a sign that Senter’s decision “wasn’t the victory that they tried to tell people it was.”

“That’s the spin they put on it. We saw it differently,” Scruggs said. “There were some very good parts of the ruling for everyone.”

Nationwide is appealing Senter’s decision to the 5th U.S. Circuit Court of Appeals, based in New Orleans. Senter heard the case without a jury.

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