Appendix — West v. Harris
Supreme Court brief1979
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- Qereme Court, U. m
FILED
DEC go 1978
In the
Supreme Court of the Huitea tengo
OCTOBER TERM,
APPENDIX VOLUME
No —%8-1001
CARL D. WEST, Petitioner
Versus
PATRICIA ROBERTS HARRIS, SECRETARY OF
THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT,
Respondent.
and
ANDREW J. DAIGLE, Petitioner
Versus
PATRICIA ROBERTS HARRIS, SECRETARY OF
THE UNITED STATES DEPARTMENT OF HOUSING
AND URBAN DEVELOPMENT,
Respondent.
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE
FIFTH CIRCUIT
LEOPOLD B. BABIN
WIMBISH & BABIN
240 Barrow Street
P.O. Box 406
Houma, Louisiana 70361
(504) 868-1073
Attorney for Petitioners
_ SS OC
A B Letter Service, Inc., 327 Chartres St., New Orleans, La. (504) 581-5555
i
TABLE OF CONTENTS
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APPENDIX A
WEST v. HARRIS, 573 F2d 873 (1978)
Carl D. WEST,
Plaintiff- Appellee-Cross-Appellant,
v.
Patricia Roberts HARRIS, Secretary of the United States
Department of Housing and Urban Development,
Defendant-Appellant-Cross- Appellee.
Andrew J. DAIGLE,
Plaintiff- Appellee-Cross-Appellant,
Vv.
Patricia Roberts HARRIS, Secretary of the United States
Department of Housing and Urban Development,
Defendant-Appellant-Cross- Appellee.
No. 76-2531
United States Court of Appeals, Fifth Circuit
May 26, 1978
Rehearing Denied July 28, 1978
Insureds brought action against insurers to recover under
policies issued under the National Flood Insurance Act. The
United States District Court for the Western District of
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Louisiana, Edwin F. Hunter, Jr., J., entered judgment on the
verdicts in favor of insureds and insurers appealed. Insureds
filed cross appeal seeking awards of penalties, attorneys fees,
and prejudgment interest. The Court of Appeals, Charles
Clark, Circuit Judge, held that: (1) evidence demonstrated
that, with the exception of water damage suffered by one
insured, damage to insureds’ homes was due to earth move-
ment which was not a “mudslide’” and thus was due to a
perii which was excluded from coverage under the policies;
(2) whether the jurisdiction of federal court was based on the
grant of jurisdiction in the Act or was based on diversity of
citizenship, federal law applied as to the recoverability of
penalties, attorneys fees, and prejudgment interest; (3) as a
matter of federal law, prejudgment interest should be a-
warded, and (4) as a matter of convenience and practicality,
interest should be determined at the rate allowed by the law
of the forum state.
Reversed and rendered in part and remanded in part.
1. Insurance - 429.1(3)
Evidence that, following a 12 to 14-inch rainfall which
caused flooding conditions in the city, which caused flood-
water to rise to waist level in the street in front of the in-
sureds’ home, and which caused the water to reach a point
approximately half the distance between the street and the
house, the insureds noticed cracks in the walls of their home
which continued to increase in size following the inundation
sustained determination that the cracks in the home were a
direct loss caused by flood for purposes of policies issued
under the National Flood Insurance Act. National Flood In-
surance Act of 1968, § 1302 et seq., 42 U.S.C.A. §400let
seq.
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2. Insurance - 429.1(3)
Evidence that, during heavy rainfall, soil surrounding in-
sureds’ home became supersaturated with moisture which
caused the home to heave or rise slightly, and that a drain-
age canal behind the home was then drained rapidly, which
caused the soil to dry and the house to settle unevenly, caus-
ing cracking in the slab, sheetrock and masonry of the home,
demonstrated that the damage to the structure was caused by
earth movement which was not a “mudslide” so that the
damage fell within a peril excluded from coverage under a
policy issued under the National Flood Insurance Act.
National Flood Insurance Act of 1968, § 1302 et seq., 42
U.S.C.A. § 4001 et seq.
See publication Words and Phrases for other judicial
constructions and definitions.
3. Contracts - 176(2)
Determination of the legal operation of unambiguous
language of a contract is a function for the court and not the
jury.
4, Insurance - 429.1(3)
Testimony by contractor that the best way to repair
structural damage to insureds’ home was to demolish the
house and slab and rebuild a similar house upon a stronger
slab, that the failure of the foundation was due to flooding
of the area, and that the soil surrounding the home shrank
as the water table lowered, thus causing the house to drop,
demonstrated that structural damage was due to earth move-
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ment other than a “mudslide” and thus was caused by a
peril excluded from coverage under a policy issued under the
National Flood Insurance Act. National Flood Insurance
Act of 1968, § 1302 et seq., 42 U.S.C.A. § 4001 et seq.
5. Federal Courts - 419
Regardless of whether federal court had jurisdiction in
action to recover under policy issued under the National
Flood Insurance Act on the basis of diversity of citizenship
or on the basis of the jurisdictional grant contained in the
Act, the interest in uniformity of decision under the Act
mandated the application of federal, rather than state law,
with respect to the right to recover penalties, attorneys fees,
and prejudgment interest. LSA--R.S. 22:658; National
Flood Insurance Act of 1968, § 1333, 42 U.S.C.A. § 4053;
28 U.S.C.A. § 1332.
6. Interest - 39(2)
United States - 110
Award of prejudgment interest in action brought under the
National Flood Insurance Act is required as a matter of fed-
eral law; fact that the government has a financial stake in the
program is not sufficient to clothe the private insurer with
the role of sovereign immunity from awards of interest.
National Flood Insurance Act of 1968, § 1302 et seq., 42
U.S.C.A. § 4001 et seq.
7. United States - 110
Generally, the United States is not liable for interest ex-
cept where the liability is imposed by statute or assumed by
contract.
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8. Interest - 39(2)
Prejudgment interest is awarded when necessary to com-
pensate an injured plaintiff; it is not allowed when it is not
necessary element of compensation.
9. Interest - 31
As a matter of convenience and practicality, the amount
of prejudgment interest awarded in an action under the
National Flood Insurance Act should be determined at the
rate allowed by the law of the forum state. National Flood
Insurance Act of 1968, § 1302 et seq., 42 U.S.C.A. § 4001
et seq.
Robert Kopp, Atty., Marta W. Berkley, Atty., Civil Div.,
Dept. of Justice, Washington, D.C.,P. A. Bienvenu, P. Albert
Bienvenu, Jr., Bienvenu, Foster, Ryan & O’Bannon, New
Orleans, La., for defendant-appellant cross-appellee.
Leopold B. Babin, Houma, La., for plaintiff-appellee cross-
appellant.
P. Albert Bienvenu, Jr., P. A. Bienvenu, Bienvenu, Foster
Ryan & O’Bannon, New Orleans, La., for National Flood In-
surers Association (original defendant).
Appeals from the United States District Court for the
Western District of Louisiana.
Before CLARK and GEE, Circuit Judges, and LYNNE*
District Judge.
*Senior District Judge of the Northern District of Alabama,
sitting by designation.
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CHARLES CLARK, Circuit Judge:
These cases both involve claims by insureds under policies
of flood insurance issued pursuant to the National Flood In-
surance Act of 1968, 42 U.S.C.A. § 4001 et seq. After a
consolidated trial Andrew J. Daigle won a jury verdict again-
st the National Flood Insurers Association in the amount of
$12,084.56, and Carl D. West won a verdict in the amount of
$17,500.00, the policy limit. Judgment was entered pursu-
ant to the verdicts, but on post-trial motion the amount of
each judgment was reduced by the $200 policy deductible.
On appeal the National Flood Insurers Association! con-
tends (1) that the trial judge should have granted defendant’s
motions for directed verdict and for judgment notwithstand-
ing the verdict since the evidence was insufficient to show
that the damage was a direct loss by flood; (2) that the trial
judge should have granted defendant’s motions for directed
verdict and for judgment notwithstanding the verdict since
the undisputed evidence established that the damage result-
ed from a peril which the policies excluded from coverage;
(3) that the jury awarded damages for items not covered by
the policies; and (4) that the trial judge committed reversible
error in instructing the jury. On cross-appeal the plaintiffs
raise additional issues involving the recoverability of a penal-
ty and attorney’s fees provided by Louisiana insurance law
1. On April 5, 1978, over two months after oral argument in this case,
Patricia Roberts Harris, Secretary of the Department of Housing and
Urban Development (HUD), was substituted as party-appellant in the
place of the National Flood Insurers Association, The Department of
HUD assumed the operation of all of the insurance aspects of the flood
insurance program previously performed by the National Flood Insur-
ers Association on January 1,1978. In conjunction with this undertak-
ing, HUD agreed to assume responsibitity for the continuation of cover-
age under policies previously issued by the Association, including the
defense of pending claims asserted pursuant to such policies. This
change in parties has no effect on the rights of these plaintiffs under
the policies issued to them,
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and the recoverability of prejudgment interest. We reverse
both cases and remand the West case for new trial on the
issue of damages only.
Since these decisions turn on the terms of identical poli-
cies of insurance issued to the plaintiffs by the defendant, we
will set forth those terms with some particularity. Upon the
payment of a premium by the plaintiffs, the defendant
agreed to insure the plaintiffs’ homes in the Morgan City,
Louisiana, area ‘‘against all DIRECT LOSS BY ‘FLOOD’ as
defined herein. . .” The policy defined ‘‘flood”’ as follows:
Wherever in this policy the term ‘‘flood” occurs, it shall be
held to mean a general and temporary condition of partial
or complete inundation of normally dry land areas from
(1) the overflow of inland or tidal waters, (2) the unusual
and rapid accumulation or runoff of surface waters from
any source, or (3) mudslides which are caused or precipi-
tated by accumulations of water on or under the ground.
Immediately below this definition was a ‘Perils Excluded”’
provision:
Perils Excluded -- This Company shall not be liable for
loss:
‘ (a) by . . .(3) water, moisture or mudslide damage of any
- kind resulting primarily from conditions, causes or occurr-
ences which are solely related to the described premises
or are within the control of the Insured (including but not
limited to design, structural or mechanical defects, failures,
stoppages or breakages of water or sewer lines, drains,
pumps, fixtures or equipment, seepage or backup of water,
or hydrostatic pressure) or any condition which causes
flooding which is substantially confined to the described
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premises or properties immediately adjacent thereto;
(d) by fire, windstorm, explosion, erosion, earthquake,
landslide or any other earth movement except such mud-
slides as are covered under the peril of flood, or by theft;
The Daigle policy had a term of March 31, 1973, to March
31, 1974, and the West policy had a term of April 16, 1973,
to April 16, 1974.
The Daigle Case
The plaintiff’s evidence in the Daigle case showed that the
Daigles had purchased their house new in 1966. The house
had a slab foundation and was built on reclaimed swamp
land. The soil prevalent throughout this area is a mixture of
humus and clay which expands when wet and contracts when
dry. These soil movements cause houses built on slabs to
heave and settle slightly with soil moisture changes. Despite
numerous wet and dry periods during the seven years before
April 17-18, 1973, the Daigles noticed no structural damage
to their house. During that time, however, they had found it
necessary on occasion to purchase dirt fill for use in land-
scaping, gardening, and repairing “pot holes” which had
developed in their yard. ,
On April 17-18, 1973, a twelve - to fourteen-inch rainfall
inundated the Morgan City area. That rainfall caused flood-
ing conditions in many sections of Morgan City, and the
flood water was waist-deep in the street in front of the
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Daigles’ house. The water reached a point approximately
half the distance between the street and their house, the
highest it had risen since they bought the house, but the
flood waters never entered their house. Following this rain-
fall a severe drought occurred which lasted through August.
Mrs. Daigle testified that they noticed damage to their
house almost immediately after the rainfall. They first heard
cracking sounds, and then they observed small cracks in the
walls that got bigger and bigger as time went by. Mr. Shu-
maker, a construction ¢ontractor who inspected the house in
July 1973, confirmed that the cracking had occurred only a
few months earlier, and Mr. Guillory, an architectural engin-
eer, opined that ‘‘the flooding certainly had a direct effect on
the matter.”
[1] This testimony was sufficient to support the jury’s
finding that the crack. damage was a direct loss by flood.
However, the plaintiff's proof also established how the flood
caused this damage, and that proof brings into effect the
policy’s earth movement exclusion.
[2] According to Mr. Guillory and Mr. Shumaker, the
normal situation in Morgan City is for water to be kept in
the drainage canals around Morgan City to maintain the
water table for the sole purpose of stabilizing the soil. Dur-
ing the heavy rainfall of April 17-18, the soil became super-
saturated with moisture, which caused the Daigles’ house to
heave, or rise, slightly. The municipal authorities became
alarmed at the water accumulation in the canals, one of
which was behind the Daigles’ house, and they determined to
drain the canals as rapidly as possible. The rapid draining of
the canals lowered the water table quickly, with the result
that the soil dried and the house settled unevenly, causing
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cracking in the slab, sheetrock, and masonry of the Diagle
house.
Dr. Capozzoli, the soil expert who testified for the defen-
dant, agreed that the drying of the soil caused the earth to
sink and settle, and that in turn caused the damage to the
Daigles’ house. He differed from Mr. Guillory, however,
about the effect the flood and its aftermath had on this pro-
cess. Dr. Capozzoli was of the opinion that the settlement
was in process before the flood due to the nature of the soil
and that the flood played no more than a negligible role in
causing the damage to the house. He did admit, however,
that had a professional inspected the house immediately be-
fore the flood and found no cracks, and reinspected it im-
mediately after the flood and found cracks, he would agree
that the flood was a causative factor.
At the end of the plaintiff's evidence and again at the
close of all the evidence, the defendant moved for a directed
verdict both on the ground that the evidence failed to estab-
lish that the plaintiff’s damage was a direct loss by flood and
on the ground that the evidence established the applicability
of several of the policy exclusions, including exclusion of all
earth movement except mudslides. The trial judge, being of
the opinion that the separate contentions as to coverage and
exclusion were merely two sides of the same coin, denied the
motion and submitted the case to the jury to determine
whether the plaintiff suffered a direct loss by flood. The
defendant renewed these contentions on motion for judg-
ment notwithstanding the verdict, which the trial court
denied. This action was error. The evidence entitled the
defendant to judgment as a matter of law in the Daigle case.
[3] The determination of the legal operation of the un-
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ambiguous language of a contract is a function for the court
and not the jury. Nat Harrison Associates, Inc. v. Gulf
States Utilities Co., 491 F.2d 578 (5th Cir. 1974); Gore v.
American Motorists Insurance Co., 441 F.2d 10 (5th Cir.
1971); see Ammons v. Franklin Life Insurance Co., 348 F.
2d 414 (5th Cir. 1965). In this case the undisputed facts
show that the immediate cause of the Daigles’ loss was earth
movement which was not a mudslide, a peril excluded in
unambiguous terms under clause (d) of the ‘‘Perils Excluded”
section of the policy.
Regardless of the role the flood of April 17-18 played in
bringing about the conditions that led to the damage of the
Daigles’ house, the testimony of Mr. Shumaker, Mr. Guillory,
and Dr. Capozzoli established without contradiction that the
immediate cause of the damage was the settlement of the
house due to uneven soil support. The house sank because
the earth below it shifted and settled as a result of loss of
moisture in the soil. Regardless of whether this settlement
had been in process over a long period of time or whether it
occurred immediately after the flood and draining of the
canals, it was still the result of earth movement.
In unambiguous terms the policy provides that the defen-
dant “shall not be liable for loss... by . . . erosion, earth-
quake, landslide or any other earth movement except such
mudslides as are covered under the peril of flood...” The
policy does not cover loss caused by earth movement in the
form of soil settlement. It unambiguously provides that the
only earth movement covered is a mudslide caused or precipi-
tated by accumulation of water on or under the ground.
There is no evidence of a mudslide in this record, nor is there
evidence that the general surface of the ground area was un-
level. The only mention of a mudslide was Mr. Guillory’s
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definition of the term as mud sliding down an incline on the
surface of the earth. Cf. 24C.F.R. § 1909.1 (1977) (defin-
ing “mudslide” as a “flow .. . of liquid mud down a hill-
side...”’),
Since the Daigles’ loss occurred in a manner that the policy
clearly excluded from coverage, there was no issue of fact to
be submitted to the jury. The trial court should have applied
the policy exclusion to the undisputed evidence and directed
a verdict for the defendant. We therefore reverse the judg-
ment in favor of Mr. Daigle and direct the rendition of a
verdict for the defendant.
The West Case
This case was consolidated with the Daigle case for trial
and both cases were simultaneously submitted to the same
jury. The jury found that the Wests had sustained a direct
loss to their property because of flood and awarded them the
policy limit. Because of the different facts proved in this
case, we sustain the liability portion of the judgment but re-
verse the award of damages.
According to Mr. West's testimony, the Wests purchased
a four-year-old nouse in 1969. This house was in a differ-
ent neighborhood from the Daigles’ house. However, the
testimony revealed that it too was built on reclaimed swamp
land and was supported by a clay-humus mixture soil founda-
tion that would expand and contract with soil moisture
changes. At the time of purchase the Wests inspected the
house thoroughly and found no evidence of cracks, defects,
or structural damage, and they observed no such damage
prior to the rainfall of April 17-18, 1973.
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During this rainfall, flood water inundated the Wests’
property and actually entered the house to a depth of one
and one-half inches. Water damage to the floor tiles, air
conditioning unit, wall boards, baseboards, and insulation
was immediately apparent. Structural damage to the Wests’
house became apparent two to three weeks after the flood:
a sliding glass door began to jam, bricks began to pull away
from the baseboard, .a ridge appeared under floor tiles,
and later an open crack in the floor appeared. Inspection of
the house revealed that the concrete slab foundation had
cracked in several places. Although the defendant apparently
was willing to pay the Wests for the water damage, it denied
coverage of the structural damage.
[4] The major component of the structural damage was
the cracking of the house’s slab foundation. Mr. Patterson,
a construction contractor who testified on behalf of the
plaintiff, was of the opinion that repairing the existing struc-
ture would provide a temporary cure at best. He recommend-
ed and gave an estimate, w:.1ch exceeded the policy limits,for
demolishing the house and slab and rebuilding a similar house
on a stronger or “‘beefed-up”’ slab. Mr. Patterson also attribu-
ted the failure of the foundation to the flooding of the area.
A fair reading of his testimony, however, reveals that the
structural damage to the Wests’ house was also caused by
earth movement other than a mudslide,thus bringing into
play the same policy exclusion which applies in the Daigle
case.
Although Mr. Patterson's testimony about how the flood
caused the foundation to fail was not as clear as Mr. Guill-
ory’s testimony in the Daigle case, the gist of the testimony is
the same. He testified that lowering the water table causes
the soil to shrink, as a result of which the house drops down.
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He testified that the concrete slab supporting the Wests’
house obviously sank in some areas because of the condition
of the soil. The reason he wanted to “beef up”’ the slab of a
new house was so that it could withstand any “positive
negative pressure that may occur in any future flooding
situation.” In sum, the slab cracked because changes in the
water table due to flooding and drainage of flood waters
caused relative earth movements under the slab which created
the positive and negative pressures which cracked it. The
new stronger slab was required to resist similar forces in the
future.
Dr. Capozzoli again testified for the defendant, and he
concluded that the structural damage had been caused by
soil movements and not by the flood. Although Dr. Capo-
zzoli andMr. Patterson differed as to the role the flood play-
ed in damaging the Wests’ house, they were in agreement that
lack of soil support caused the foundation to settle unevenly
and crack.
The defendant moved for a directed verdict at the end of
the plaintiff’s case and again at the close of all the evidence
on the ground, among others, that the evidence established
the applicability of the provision excluding coverage of loss
due to earth movement other than a mudslide. The trial
judge denied these motions, and he later denied the defen-
dant’s motion for judgment notwithstanding the verdict,
which was also made, in part, on the basis of this exclu-
sion.
The trial judge erred in denying these motions, for the
evidence presented by both sides established the immediate
cause of the structural damage to have been earth move-
ment other than a mudslide. As was discussed in the Daigle
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case, the policy clearly excludes such losses from its cover-
age, and the trial judge should have directed a verdict for the
defendant insofar as the plaintiff was seeking to recover for
structural damages.
Since the flood water entered the house and did some
damage to the interior of the West home and to its contents,
it is clear that the defendant has some liability under the
policy it issued. However, the jury’s award of $17,500 was
based on Mr. Patterson’s estimate of the cost to destroy the
existing house and slab and to rebuild a similar house on a
“beefed-up"” slab, a procedure necessitated only by the
cracking of the original slab. We reverse that verdict since
the award was incorrectly based on the structural damages
to the house and remand for a new trial on the issue of the
amount of damages (less the $200 policy deductible) caused
by the flood waters that entered the house.
The Cross-Appeal
Since the defendant insurer does have some liability in
the West case, we must consider the issues raised on cross-
appeal concerning the applicability of Louisiana statutory
law which allows a penalty and attorney’s fees for the ar-
bitrary refusal of an insurer to pay a claim, La.Rev.Stat.
Ann. 22:658, and the availability of prejudgment interest
to a prevailing plaintiff in an action brought on a flood in-
surance policy. The plaintiff argues that the state law pro-
vision on the penalty and attorney’s fees is applicable in a
diversity case on a flood insurance policy because the pro-
vision is not inconsistent with but in fact is harmonious with
the federal scheme since it facilitates the prompt settlement
of claims. The plaintiff argues that prejudgment interest is
allowable both because Louisiana law allows prejudgment
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interest in such cases and because equity and general con-
tract law support an award of such interest. The district
court, though inclined to hold that the defendant had not
acted arbitrarily or capriciously, denied the plaintiff's claims
for the penalty and attorney’s fees as a matter of law and
also denied the plaintiff's claim for prejudgment interest.
We affirm the judgment denying the penalty and attorney’s
fees and reverse the judgment denying prejudgment interest.
Whether the plaintiff is entitled to the penalty and attor-
ney’s fees granted by Louisiana statute turns on the fact that
federal law is applicable in flood insurance cases. Mr. West
originally filed this action in Louisiana state court against
Aetna Casualty and Surety Company, the servicing agent of
the National Flood Insurers Association with respect to the
West policy. Although Congress granted jurisdiction in cases
involving denials of claims under flood insurance policies to
United States district courts without regard to diversity of
citizenship or amount in controversy, 42 U.S.C.A. § 4053,
Aetna removed this case to federal district court on the basis
of diversity jurisdiction, alleging diversity of citizenship and
over $10,000 in controversy, 28 U.S.C.A. § 1332. Subse-
quently the National Flood Insurers Association was added
as a party defendan’ and still later Aetna was granted sum-
mary judgment. TT’ plaintiff argues that since this case is
in federal court on the basis of diversity jurisdiction, the
doctrine of Erie Railroad Co. v. Tompkins, 304 U.S. 64,
58 S.Ct. 817, 82 L.Ed. 1188 (1938), compels the court
to apply state law.
We pretermit any determination of whether the district
court exercised its jurisdiction under the diversity statute
or under 42 U.S.C.A. § 4053. Although the basis for re-
moval pleaded by Aetna, who turned out not to be the
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PRED IOEOLL ON L LI IT
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proper defendant, was diversity jurisdiction, the fact remains
that Congress granted jurisdiction in disputes over the cover-
age of insurance policies issued pursuant to the National
Flood Insurance Act to federal district courts without re-
gard to diversity of citizenship or amount in controversy.
We need not resolve whether the application of state or
federal law should be determined by which of two juris-
dictional statutes a party chooses to allege in invoking the
court’s jurisdiction, for even if this properly should be con-
sidered a diversity case federal law applies.
The National Flood Insurance Act of 1968 makes flood
insurance available through a program with large-scale partici-
pation by the federal government and carried out to the
maximum extent practicable by the private insurance indus-
try. 42 U.S.C.A. §4001(b), (d). Besides making insurance
available in high-risk, high-rate areas, the Act also contem-
plates a unified national program for flood-plain management
in order to reduce or avoid future flood losses. 42 U.S.C.A.
§ §4001(c), 4002(b). Thus, flood insurance is only available
in those areas which have adopted land use and control
measures conforming to federal criteria. 42 U.S.C.A.§ §4012
(c), 4102.
The Secretary of HUD is authorized to establish and ad-
minister the flood insurance program. 42 U.S.C.A.5 4011.
The Secretary’s involvement in the program was summarized
by the Third Circuit in Commonwealth of Pennsylvania v.
National Association of Flood Insurers, 520 F.2d 11 (3d
Cir. 1975), as follows:
. . .[ T]he Secretary is authorized to determine the priori-
ties for insurance coverage, the manner in which insur-
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ance premiums are to be set, the mechanics of funding, the
methods of paying claims, the limitations on payments
and on the total amount of outstanding coverage, and the
extent of federal financial subsidies for the insurance pre-
miums. See 42 U.S.C. §§ 4012-4027; 1968 U.S. Code
Cong. & Admin. News pp. 2967-73.
Under the Act, 42 U.S.C. § 4041, the Secretary is first
directed to implement the program by encouraging the
formation of a pool of private insurance companies. The
Secretary is then authorized to enter into an agreement
with this insurance pool to make flood insurance policies
available to the public with premiums subsidized by fed-
eral funds. 42 U.S.CS§ § 4041, 4051, 4052. The members
of the insurance pool are to sell the insurance, adjust and
pay claims and provide risk capital. 42 U.S.C. § § 4052,
4053. The Secretary is authorized to make payments to
the pool to subsidize premium rates and can make arrange-
ments for reinsurance of the pool in case of excessive loss.
42 U.S.C. § 4055.
520 F.2d at 17. This description indicates the extensive
administrative role the federal government plays in the pro-
vision of flood insurance as well as its financial role.
In addition to § 4053 which confers federal court juris-
diction without regard to diversity or amount, 42 U.S.C.A.
§ 4019 has an important bearing on the issue under consid-
eration in this case. That section, dealing with payment of
claims, provides:
The Secretary is authorized to prescribe regulations es-
tablishing the general method or methods by which prov-
ed and approved claims for losses may be adjusted and
paid for any damage to or loss of property which is cover-
ee
OPER GERD
A-19
ed by flood insurance made available under the provisions
of this chapter.
Congress has undertaken to regulate the claims adjustment
process and judicial review thereof, and nowhere in these
Statutory sections or in the regulations implementing them,
24 C.F.R.§ § 1912.21, 1912.22 (1977), is there any mention
of use of the statutory law of the forum state on any issue.
[5] In discussing the law to be applied by a federal court,
the Supreme Court stated in Erie: ‘Except in matters
governed by the Federal Constitution or by acts of Congress,
the law to be applied in any case is the law of the state.” 304
U.S. at 78, 58 S.Ct. at 822. Erie’s state law proviso does not
apply when a federal statute dominates the subject matter in
issue, see Sola Electric Co. v. Jefferson Electric Co., 317 U.S.
173, 63 S.Ct. 172, 87 L.Ed.165 (1942), or when a uniform
national rule is necessary to further the interests of the fed-
eral government. First National Bank, Henrietta v. Small
Business Administration, 429 F.2d 280 (5th Cir. 1970),
quoting Clearfield Trust Co. v. United States, 318 U.S. 363,
63 S.Ct. 573, 87 L.Ed. 838 (1943). Since the flood insur-
ance program is a child of Congress, conceived to achieve
policies which are national in scope, and since the federal
government participates extensively in the program both in
a supervisory capacity and financially, it is clear that the
interest in uniformity of decision present in this case man-
dates the application of federal law. Cf. First National Bank,
Henrietta v. Small Business Administration, 429 F.2d 280
(Sth Cir. 1970). Thus, a prevailing plaintiff in a suit on a
flood insurance policy issued pursuant to the National Flood
Insurance Act is not entitled to recover the statutory penalty
and attorney’s fees allowed by state insurance law for arbi-
trary denial of coverage. Bains v. Hartford Fire Insurance
A-20
Co., 440 F.Supp. 15 (N.D.Ga.1977); Drewett v. Aetna Casu-
alty & Surety Co., 405 F.Supp. 877 (W.D.La. 1975), aff'd
on other grounds, 539 F.2d 496 (5th Cir. 1976); cf. Charles-
ton & Western Carolina Railway Co. v. Varnville Furniture
Co., 237 U.S. 597, 35 S.Ct. 715, 59 L.Ed. 1137 (1914)
(South Carolina penalty statute for failure of an interstate
carrier timely to pay a claim is invalid due to Congressional
regulation of the liability of an interstate carrier). Contra,
Davis v. Aetna Casualty & Surety Co., 329 So.2d 868 (La.
App.1976) (on rehearing).
Nothing we say here is inconsistent with Drewett v. Aetna
Casualty & Surety Co., 539 F.2d 496 (Sth Cir. 1976). In
that case, the plaintiff argued that the ‘“‘loss-in-progress”’
principle should not be applied to a policy issued under the
national flood insurance program since the National Flood
Insurance Association is not an ordinary profit-seeking insur-
ance company. In rejecting that argument the court stated:
Because the Program’s exposure to claims and its pre-
miums are required to be estimated in accordance with
standard insurance practices, and because private insur-
ers carry part of the risk, it is clear that Congress did not
intend to abrogate standard insurance law principles which
affect such estimates and risks.
539 F.2d at 498. The court did not hold the statutory or
decisional law of any particular state to be applicable.
Rather, it applied the ‘traditional common-law technique of
decision” by drawing upon standard insurance law principles.
Cf. D’Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 471-72,
62 S.Ct. 676, 686, 86 L.Ed. 956 (1942) (concurring opinion
of Mr. Justice Jackson).
Wee eye oe
wow
A-21
Nor does the insurance policy itself, which was drafted
under the supervision of the Secretary of HUD, indicate that
state statutes allowing penalties and attorney’s fees should
be applied in suits over coverage. The pclicy states:
Any terms of this policy which are in conflict with the
statutes of the State wherein the property is located are
hereby amended to conform to such statutes, except that
in cases of conflict with applicable Federal law or regu-
lation, such Federal law or regulation shall control the
terms of this policy.
This provision is not applicable to this case, for no “[term]
of this policy”’ is asserted to be in conflict with any Louisiana
Statute. The policy does not conflict with Louisiana law.
The federal scheme, which this policy provision recognizes *o
be controlling, simply differs from the Louisiana scheme with
respect to available remedies against an insurer who dis-
allows claims.
In sum, federal law controls disputes over the coverage of
insurance policies issued pursuant to the National Flood In-
surance Act of 1968 regardless of whether the district court
exercises jurisdiction under 42 U.S.C.A.§ 4053 or under 28
U.S.C.A. § 1332. Congress has undertaken to establish a
comprehensive flood insurance program under the control
of the Department of HUD to achieve policies national in
scope, and the interest in uniformity of decisions compels
the application of federal law. Asa result, a prevailing plain-
tiff is not entitled to recover the penalty and attorney’s
fees provided by Louisiana. Nothing in the decisional law of
this circuit or in the provisions of the insurance policy points
to a contrary conclusion.
A-22
[6] It is clear from the foregoing discussion that the plain-
tiff is not entitled to an award of prejudgment interest from
date of judicial demand based on La.Civ.Code Ann. art.
2924. Nevertheless, there remains an issue whether an award
of prejudgment interest is required as a matter of federal
law. We conclude that it is .
[7] We reject the National Flood Insurers Association's
contention that prejudgment interest is not allowable since
the United States government subsidizes the flood insurance
program. Asa general rule, the United States is not liable for
interest except where the liability is imposed by statute or
assumed by contract. See United States v. Worley, 281 U.S.
339, 50 S.Ct. 291, 74 L.Ed. 887 (1930); Gray v. Dukedom
Bank, 217 F.2d 108 (6th Cir. 1954). The National Flood
Insurers Association is not an arm of the sovereign, but an
association of private insurers. That the government has a
financial stake in this program is not sufficient to cloak the
defendant with the robe of sovereign immunity from awards
of any interest. Cf. White v. Bloomberg, 360 F.Supp. 58
(D.Md. 1973) (the postal service is an entity sufficiently in-
dependent of the government that a judgment against it is
not one against the sovereign), aff'd 501 F.2d 1379 ( 4th
Cir, 1974). 2
The National Flood Insurers Association’s principal argu-
ment against an award of prejudgment interest focuses on
28 U.S.C.A. §1961, which provides interest on a money judg-
ment in a civil case from the date of the entry of judgment.
The Association asserts that in the absence of @ positive con-
gressional allowance of prejudgment interest, 28 U.S.C.A.
§1961 prohibits such an award. The decisions in this area,
2. The Department of HUD’s assumption of the National Flood In-
surers Association's liabilities does not change the extent of those lia-
bilities.
A-23
however, indicate that the Association’s reading of the
statute is mistaken and that prejudgment interest is an appro-
priate element of compensation for a plaintiff who is success-
ful in recovering under a flood insurance policy.
28 U.S.C.A. § 1961 does not speak to the issue whether the
judgment itself will include prejudgment interest as part of
the plaintiff’s compensation. /Jllinois Central Railroad Co.
v. Texas Eastern Transmission Corp., 551 F.2d 943 (5th
Cir. 1977). This court held in that case that 28 U.S.C.A.
§1961 does not preclude a carrier from an award of prejudg-
ment interest in its action to recover demurrage charges from
a shipper, explaining:
The statute [28 U.S.C.A. § 1961] does not limit success-
ful plaintiffs to interest from the date of their judgments.
Rather it indicates that the judgment itself will bear in-
terest, as a matter of law, from the date it is entered, and
leaves to other principles of law the issue of whether the
judgment itself will include prejudgment interest as part of
the plaintiff’s compensation. As stated in Louisiana &
Ark. Ry. Co. v. Export Drum Co., 359 F.2d 311, 317
(Sth Cir. 1966), ““§1961. . . has nothing to do with the
question of whether prejudgment interest shall be allowed
as part of the compensation awarded to make the injured
party whole."
551 F.2d at 944 (emphasis in original). In Louisiana & Ar-
kansas Railway Co, v. Export Drum Co., 359 F.2d 311 (5th
Cir. 1966), the court concluded that prejudgment interest
should be allowed in a suit under the Interstate Commerce
Act by a carrier to recover freight charges that the shipper
refused to pay. The rationale used by the court is equally ap-
plicable to a suit seeking recovery on an insurance policy:
A-24
As the common law recognizes in analogous situations, the
only way the wronged party can be made whole is to
award him interest from the time he should have received
the money. At the conclusion of the dispute, the parties
should be in the same position regardless of whether the
shipper does not pay the disputed amount, as here, and the
carrier is forced to sue, or whether the shipper pays and
then sues for an overcharge.
359 F.2d at 317. See also Rodgers v. United States, 332 U.S.
371, 373-74, 68 S.Ct. 5, 6-7, 92 L.Ed. 3 (1947).
The court in Export Drum relied in part on the fact that a
sum certain was in controversy; however, prejudgment in-
terest is also available on an unliquidated claim when necess-
ary to arrive at fair compensation. Miller v. Robertson, 266
U.S. 243, 257-58, 45 S.Ct. 73, 78-79, 69 L.Ed. 265 (1924).
In this case, although the amount of liability was not liqui-
dated, it was based upon the readily ascertainable value of
damages to property rather than personal injury. Under such
circumstances it has been held that the better practice is to
allow prejudgment interest as an element of compensation in
the absence of strong equities to the contrary. See Eazor Ex-
press, Inc. v. International Brotherhood of Teamsters,520F.
2d 951, 973 (3d Cir. 1975) (action by an employer against a
union under the Labor Management Relations Act); Aetna
Casualty & Surety Co. v. United States, 365 F.2d 997, 1006-
07 (8th Cir. 1966) (action by a subcontractor against a surety
under the Miller Act).
[8] The major factor permeating these cases allowing pre-
judgment interest is that such an award is necessary to com-
pensate an injured plaintiff. As a corollary, prejudgment
interest is not allowed when it is not a necessary element
_
A-25
of compensation. Thus this circuit in Barrios v. Louisiana
Construction Materials Co., 465 F.2d 1157 (5th Cir. 1972),
denied prejudgment interest on a Jones Act claim for person-
al injuries tried on the law side, explaining:
Unlike collision cases and wrongful death cases where the
loss, although unliquidated, occurs at one time and is
measurable as of that time, this is a case in which the dam-
ages awarded by the jury included substantial compensa-
tion for future pain and suffering and future loss of earn-
ings.
465 F.2d at 1168. The examples of collision cases and
wrongful death cases cited by the Barrios court were O’Don-
nell Transportation Co. v. City of New York, 215 F.2d 92
(2d Cir. 1954) (prejudgment interest in order to make the
injured party whole is the general rule in admiralty cases),
and National Airlines, Inc. v. Stiles, 268 F.2d 400 (5th Cir.
1959) (interest from the date of death is necessary to provide
‘fair and just compensation” in an action under the Death on
the High Seas Act). Since Berry v. Sladco,Inc., 495 F.2d 523
(Sth Cir. 1974), the case chiefly relied upon by the defen-
dant, was a personal injury action under the Outer Continen-
tal Shelf Lands Act, the rationale of the Barrios court ex-
plains the result reached there. See also National Airlines,
Inc. v. Stiles, 268 F.2d 400, 406 (5th Cir. 1959) (prejudg-
ment interest is not necessary in a personal injury action
where a plaintiff has the right ‘“‘to recover for pain and suf-
fering and injuries up to the date of trial and as to the fu-
ture’). Although some courts have relied on 28 U.S.C.A. |
§1961 to deny prejudgment interest in personal injury claims
based upon federal law, as did the Berry court, these holdings
are not to be read as relating to prejudgment interest awarded
as part of the compensation to make the injured party whole.
A-26
See Sanford Bros. Boats, Inc. v. Vidrine, 412 F.2d 958,
972-73, & n.12 (Sth Cir. 1969).
[9] The National Flood Insurance Act was intended in
part to make insurance with adequate limits of coverage
available to persons for flood losses. 42 U.S.C.A.§ 4002(a)
(5), (6). The damages recoverable are pecuniary in nature,
not personal, and the amount is based upon the readily as-
certainable value of services and property. Fair compensa-
tion to the plaintiff for his loss covered by the insurance
policy issued by the defendant can only be achieved by in-
cluding the award of prejudgment interest as a mandatory
element of damages. See Louisiana & Arkansas Railway Co.
v. Export Drum Co., 359 F.2d 311, 317 (5th Cir. 1966). On
remand the district court should award Mr. West interest
from the date payment was due under the policy provisions.
As a matter of convenience and practicality, the amount of
interest should be determined at the rate allowed by the law
of the forum state. See Louisiana & Arkansas Railway Co.
v. Export Drum Co., 359 F.2d at 317.
REVERSED AND RENDERED, IN PART, AND RE-
MANDED, IN PART.
A-27
APPENDIX B
42 U.S.C.A. Sections 4001, 4012 and 4012a
§ 4001. Congressional findings and declaration of purpose
Necessity and reasons for flood insurance program
(a) The Congress finds that (1) from time to time flood
disasters have created personal hardships and economic dis-
tress which have required unforeseen disaster relief measures
and have placed an increasing burden on the Nation’s re-
sources; (2 ) despite the installation of preventive and protec-
tive works and the adoption of other public programs design-
ed to reduce losses caused by flood damage, these methods
have not been sufficient to protect adequately against grow-
ing exposure to future flood losses; (3 )as a matter of nation-
al policy, a reasonable method of sharing the risk of flood
losses is through a program of flood insurance which can
complement and encourage preventive and protective
measures; and (4) if such a program is initiated and carried
out gradually, it can be expanded as knowledge is gained and
experience is appraised, thus eventually making flood insur-
ance coverage available on reasonable terms and conditions
to persons who have need for such’protection.
Participation of Federal Government in flood insurance
program carried out by private insurance industry
(b) The Congress also finds that (1) many factors have
made it uneconomic for the private insurance industry alone
to make flood insurance available to those in need of such
protection on reasonable terms and conditions; but (2) a
program of flood insurance with large-scale participation of
A-28
the Federal Government and carried out to the maximurn ex-
tent practicable by the private insurance industry is feasible
and can be initiated.
Unified national program for flood plain management
(c) The Congress further finds that (1) a program of flood
insurance can promote the public interest by providing ap-
propriate protection against the perils of flood losses and en-
couraging sound land use by minimizing exposure of proper-
ty to flood losses; and (2) the objectives of a flood insurance
program should be integrally related to a unified national
program for flood plain management and, to this end, it is
the sense of Congress that within two years following the ef-
fective date of this chapter the President should transmit to
the Covigress for its consideration any further proposals
necessary for such a unified program, including proposals for
the allocation of costs among beneficiaries of flood protec-
tion.
Authorization of flood insurance program; flexibility in
program
(d) It is therefore the purpose of this chapter to (1)
authorize a flood insurance program by means of which
flood insurance, over a period of time, can be made avail-
able on a nationwide basis through the cooperative efforts of
the Federal Government and the private insurance industry,
and (2) provide flexibility in the program so that such flood
insurance may be based on workable methods of pooling
risks, minimizing costs, and distributing burdens equitably
among those who will be protected by flood insurance and
the general public.
- nnn
A-29
Land use adjustments by State and local governments;
development of proposed future construction; assistance of
lending and credit institutions; relation of Federal assistance
to all flood-related programs; continuing studies
(e) It is the further purpose of this chapter to (1) encour-
age State and local governments to make appropriate land use
adjustments to constrict the development of land which is
exposed to flood damage and minimize damage caused by
flood losses, (2) guide the development of proposed future
construction, where practicable, away from locations which
are threatened by flood hazards, (3) encourage lending and
credit institutions, as a matter of national policy, to assist in
furthering the objectives of the flood insurance program,
(4) assure that any Federal assistance provided under the
program will be related closely to all flood-related programs
and activities of the Federal Government, and (5) authorize
continuing studies of flood hazards in order to provide for a
constant reappraisal of the flood insurance program and its
effect on land use requirements.
Mudslides
(f) The Congress also finds that (1) the damage and loss
which results from mudslides is related in cause and similar
in effect to that which results directly from storms, deluges,
overflowing waters, and other forms of flooding, and (2)
the problems involved in providing protection against this
damage and loss, and the possibilities for making such protec-
tion available through a Federal or federally sponsored pro-
gram, are similar to those which exist in connection with ef-
forts to provide protection against damage and loss caused by
such other forms of flooding. It is therefore the further pur-
pose of this chapter to make available, by means of the
A-30
metheds, procedures, and instrumentalities which are other-
wise established or available under this chapter for purposes
of the flood insurance program, protection against damage
and loss resulting from mudslides that are caused by accumu-
lations of water on or under the ground.
Erosion and undermining of shorelines by waves or currents
(g) The Congress also finds that (1) the damage and loss
which may result from the erosionand undermining of shore-
lines by waves or currents in lakes and other bodies of water
exceeding anticipated cyclical levels is related in cause and
similar in effect to that which results directly from storms,
deluges, overflowing waters, and other forms of flooding, and
(2) the problems involved in providing protection against
this damage and loss, and the possibilities for making such
protection available through a Federal or federally sponsored
program, are similar to those which exist in connection with
efforts to provide protection against damage and loss caused
by such other forms of flooding. It is therefore the further
purpose of this chapter to make available, by means of the
methods, procedures, and instrumentalities which are other-
wise established or available under this chapter for purposes
of the flood insurance program, protection against damage
and loss resulting from the erosion and undermining of
shorelines by waves or currents in lakes and other bodies of
water exceeding anticipated cyclical levels.
Pub.L. 90-448, Title XIII, §1302, Aug. 1, 1968, 82 Stat. 572;
Pub. L. 91-152, Title IV, §409(a), Dec. 24, 1969, 83 Stat.
397; Pub.L. 93-23, Title I, § 108(a), Dec. 31, 1973, 87
Stat. 979.
..000...
ee
ee anal ese > =
A-31
§ 4012. Scope of program and priorities
Priority for insurance for certain residential and church
properties and business concerns
(a) In carrying out the flood insurance program the Sec-
retary shall afford a priority to making flood insurance avail-
able to cover residential properties which are designed for
the occupancy of from one to four families, church proper-
ties, and business properties which are owned or leased and
operated by small business concerns.
Availability of insurance for other properties
(b) If on the basis of --
(1) studies and investigation undertaken and carried out
and information received or exchanged under section 4014 of
this title, and
(2) such other information as may be necessary,
the Secretary determines that it would be feasible to extend
the flood insurance program to cover other properties, he
may take such action under this chapter as from time to time
may be necessary in order to make flood insurance available
to cover, on such basis as may be feasible, any types and
classes of --
(A) other residential properties,
(B) other business properties,
(C) agricultural properties,
A-32
(D) properties occupied by private nonprofit organiza-
tions, and
(E) properties owned by State and local governments and
agencies thereof,
and any such extensions of the program to any types and
classes of these properties shall from time to time be pre-
scribed in regulations.
Availability of insurance in States or areas evidencing positive
interest in securing insurance and assuring adoption of ade-
quate land use and control measures
(c) The Secretary shall make flood insurance available in
only those States or areas (or subdivisions thereof) which he
has determined have --
(1) evidenced a positive interest in securing flood insur-
ance coverage under the flood insurance program, and
(2) given satisfactory assurance that by December 31,
1971, adequate land use and control measures will have
been adopted for the State or area (or subdivision) which
are consistent with the comprehensive criteria for land
management and use developed under section 4102 of
this title, and that the application and enforcement of such
measures will commence as soon as technical information
on floodways and on controlling flood elevations is avail-
able.
Pub.L. 90-448, Title XIII, §}305, Aug. 1, 1968, 82 Stat 574
Pub.L. 91-152, Title IV, § 410(a), Dec. 24, 1969, 83 Stat.
397; Pub.L. 92-213, §2(c)(1), Dec. 22, 1971, 85 Stat. 775.
Tope mes tae
eS oe
A-32a
4012a. Requirement of flood insurance for Federal ap-
proval of financial assistance
Amount and term of coverage
(a) After the expiration of sixty days following December
31, 1973, no Federal officer or agency shall approve any
financial assistance for acquisition or construction. purposes
for use in any area that has been identified by the Secretary
as an area having special flood hazards and in which the sale
of flood insurance has been made available under this chap-
ter, unless the building or mobile home and any personal
property to which such financial assistance relates is, during
the anticipated economic or useful life of the project, cover-
ed by flood insurance in an amount at least equal to its
development or project cost (less estimated land cost) or to
the maximum limit of coverage made available with respect
to the particular type of property under this chapter, which-
ever is less: Provided, That if the financial assistance provided
is in the form of a loan or an insurance or guaranty of a loan,
the amount of flood insurance required need not exceed the
outstanding principal balance of the loan and need not be
required beyond the term of the loan.
Federal regulations for flood insurance requirement: amount
of coverage
(b) Each Federal instrumentality responsible for the super-
vision, approval, regulation, or insuring of banks, savings and
loan associations, or similar institutions shall by regulation
direct such institutions not to make, increase, extend, or re-
new after the expiration of sixty days following December
31, 1973, any loan secured by improved real estate or a
A-32b
mobile home located or to be located in an area that has
been identified by the Secretary as an area having special
flood hazards and in which flood insurance has been made
available under this chapter, unless the building or mobile
home and any personal property securing such loan is cover-
ed for the term of the loan by flood insurance in an amount
at least equal to the outstanding principal balance of the loan
or to the maximum limit of coverage made available with
respect to the particular type of property under the chapter,
whichever is less.
State-owned property ; exemption; list of States
(c) Notwithstanding the other provisions of this section,
flood insurance shall not be required on any State-owned
property that is covered under an adequate State policy of
self-insurance satisfactory to the Secretary. The Secretary
shall publish and periodically revise the list of States to which
this subsection applies.
Pub.L. 93-234, Title 1, §102, Dec. 31, 1973, 87 Stat. 978
A-33
APPENDIX “‘C’””’
24 C.F.R. Sections 1909.1 and 1911.4
24C.F.R. § 1909.1
000...
“Flood” or “Flooding” means:
(a) A general and temporary condition of partial or com-
plete inundation of normally dry land areas from:
(1) The overflow of inland or tidal waters.
(2) The unusual and rapid accumulation or runoff of sur-
face waters from any source.
(3) Mudslides (i.e., mudflows) which are proximately
caused or precipitated by accumulations of water on or under
the ground.
(b) The collapse or subsidence of land along the shore of
a lake or other body of water asa result of erosion or under-
mining caused by waves or currents of water exceeding
anticipated cyclical levels for suddenly caused by an unusu-
ally high water level in a natural body of water, accompani-
ed by a severe storm, or by an unanticipated force of nature,
such as flash flood or an abnormal tidal surge, or by some
similarly unusual and unforeseeable event which results in
flooding as defined in (a)(1) of this section.
—
24C.F.R. §1911.4
““Mudslide”’ (i.e. mudflow) describes a condition where
there is a river, flow or inundation of liquid mud down a hill-
side usually as a result of a dual condition of loss of brush
cover, and the subsequent accumulation of water on or under
the ground preceded by a period of unusually heavy or sus-
tained rain. A mudslide (i.e., mudflow) may occur as a dis-
tinct phenomenon while a landslide is in progress, and will
be recognized as such by the Administrator only if the mud-
flow, and not the landslide, is the proximate cause of damage
that occurs.
A-34
...000...
§ 1911.4 Limitations on coverage.
(a) All flood insurance made available under the Program
is subject
(1) To the Act, the Amendments thereto, and the Regula-
tions issued under the Act;
(2) To the terms and conditions of the Standard Flood
Insurance Policy, which shall be approved by the Adminis-
trator for substance and form, and is subject to interpretation
by the Administrator as to scope of coverage pursuant to the
applicable statutes and regulations;
(3) To the specified limits of coverage set forth in the Ap-
plication and Declarations page of the policy; and
(4) To the maximum limits of coverage set forth in
§ 1911.6.
(b) Insurance under the Program is available only for loss
due to flood, as defined in §1909.1 of this subchapter. The
policy covers damage from a general condition of flooding in
the area which results from other than natural causes, such as
the breaking of a dam, but does not cover damage which re-
sults from causes on the insured’s own property or within his
control or from any condition which causes damage, which
condition is substantially confined to the insured’s premises
or properties immediately adjacent thereto.
(c) The policy does not cover losses from rain, snow, sleet,
hail, or water spray that do not result in a general condition
of flooding. It covers losses from freezing or thawing, or
from the pressure of weight of ice and water, only where
they occur simultaneously with and as a part of flood dam-
age. It covers losses from mudslide (i.e., mudflow) but does
not cover damage from landslides or from earthquakes or
similar earth movements which are volcanic or tectonic in
~~ ee ee oe
A-35
origin. The policy does not cover erosion which is not
flood-related, claims resulting from occurrences already in
progress at the time of the inception date of the term of the
policy, or losses caused by land slippage rather than mud-
slide (see definition of mudslide/mudflow in §1909.1 of this
subchapter). Damage by seepage and sewer backup may be
covered only when directly resulting from a flooding situa-
tion. Abnormal erosion caused by high water levels accom-
panied by violent wave action along a lake or other body of
water is considered a flood (see definition of flood-related
erosion in § 1909.1 of this subchapter). However, there is no
coverage where normal continuous wave action, accompanied
by erosion or the gradual and anticipated wearing away of
the land is the proximate cause of property damage.
(d) The policy protects against loss to contents only at
the location described in the application, except that con-
tents necessarily removed from the premises for preservation
from a flood are protected against loss or damage from flood
at the new location pro rate for a period of 30 days.
A-36
APPENDIX D
Excerpts from Transcript
(Daigle Case)
(120)
..000...
BY MR. BABIN:
Qs At this time, Mrs. Daigle, do you own the house, do you
and your husband own the house outright?
(BY MRS. DAIGLE):
A Yes, we do.
Q___ ‘The Act of Sale itself says August of ‘66 not ‘64. Was
the house new at the time that you purchased it?
A Yes, it was.
Q___Had you ever noticed any damage to the house at the
time you purchased it?
A No, sir.
QI see. Had you noticed any damages develop with the
structure of the house over the years?
A No, we had no problem.
QI see. When was the first time you did notice some type
of damage, if you did?
A-37
A Well, the only thing we noticed was right after the rain
in the spring of ‘73.
MR. BIENVENU:
I am sorry but I cannot hear the witness, if the Court
please.
THE COURT:
Ma'am, please speak a little louder.
(121)
BY THE WITNESS (MRS. DAIGLE):
A We noticed cracks in the spring of ‘73.
BY MR. BABIN:
Q__siIsee. You referred to a storm. Do you know approxi-
mately when this storm occurred?
A Therain storm? April the 17th of ‘73.
Q__I see. Could you describe the weather conditions im-
mediately prior to that day and on the day?
A I don’t remember any bad weather until the rain started
about five or six o'clock.
Q Which date was that?
A April the 17th.
A-38
Q 17th?
A Yes.
Q Was there any water in the area accumulated as a result
of this rain?
A Yes, there was water in the streets almost waist deep.
QI see. You said almost waist deep?
A Yes.
Q And did you take pictures of that, subsequent to the
deluge?
A Yes, sir.
(125)
BY MR. BABIN:
When did you apply for flood insurance, Mrs. Daigle?
As soon as it was available. I don’t remember the date.
How did you learn it was available?
It was advertised in the newspaper and on the radio.
Oo > A PF A
I see. And you did purchase flood insurance? Did you
purchase flood insurance and pay for it?
———
A-39
A Yes.
Q_Isee
MR. BABIN:
Your Honor, in connection with the testimony, I of-
fer, introduce, and ask to be filed in evidence the policy of
flood insurance and the check by Mr. and Mrs. Daigle in the
amount of seventy-three dollars as premium payment there-
fore.
THE COURT:
All right, sir. The policy of insurance has a maximum limit
of seventeen thousand, five hundred dollars. That is true in
each case. All right. You may proceed.
MR. BABIN:
Your honor, I would like to have this introduced as P-3.
I would like to note for the Court that the policy term is
from March the 31st, 1973 to March the 31st of "74.
(126)
THE COURT:
This policy covers any loss up to seventeen thousand, five
hundred dollars that the plaintiff sustains as a direct loss by
flood. All right.
(Whereupon said documents marked P-3 for identification
were received into evidence and filed with the Clerk of Court.
A-40
...000...
NOTE: P-3 - Policy of flood insurance and cancelled check
for premium (sent in the original)
IOs,
(129)
...000...
BY MR. BABIN:
Q_ Now, Mrs. Daigle, when did you first notice the damage
which you spoke of to your house?
(BY MRS. DAIGLE);
A Almost immediately after the rain. We heard a lot of
cracking throughout the day, constant cracking. And then
we started noticing small cracks that got bigger and bigger
until we realized we had a big problem.
Q_ Now, let’s get the time sequence straight. You purchas-
ed, as the policy indicates, that is in evidence, that the ef-
fective date of the policy is March 3lst of ‘73. This rain
occurred April the 17th?
A Yes.
Ft OR enone -
dite toe
A-4l
(149)
BY MR. BABIN:
Q_ Now, Mrs. Daigle, again, can you describe the weather
conditions on the day of April 17th?
A I don’t remember any bad weather until the rain started.
Once it started raining, it just didn’t stop.
Q _sIsee.
MR. BABIN:
Your Honor, in connection with the testimony of the wit-
ness relating to climatological conditions, I ask the Court
take judicial notice of a publication signed by and issued by
the Department of Commerce.
THE COURT:
Probably so. I will have to see it.
MR. BIENVENU:
I have no objection if that is the one you sent me.
MR. BABIN:
That’s correct, Your Honor.
THE COURT:
Let it be received in evidence.
A-42
(Whereupon said document marked P-9 for identification
was received into evidence and filed with the Clerk of Court.)
...000...
NOTE: P-9 - Report published by Department of Commerce
re weather conditions (sent in the original)
..000...
(150)
THE COURT:
What was April the 17th?
MR. BABIN:
1973. That,Your Honor, was going to describe the evi-
dence that I will submit.
THE COURT:
Let me see it, please, sir.
MI). BABIN:
All right.
THE COURT:
Well, I will give it back to you. What was that, some
hurricanes or something?
9 ewrerme tReet
IR RTT
A-43
MR. BABIN:
No, Your Honor. It indicates -- Well, I will describe it as
I go through them. But, basically, it indicates that approxi-
mately fourteen inches of rain fell in the area, the Morgan
City area, on a twenty-four period of April the 17th to the
18th, that flooding conditions occurred in the Morgan City
area.
MR. BIENVENU:
Well, we are not interested in the Morgan City area. There
is no doubt about the fact that the records show that kind
of rain fell, but we are interested in what happened at this
lady's house.
THE COURT:
Well, the Court will receive those in evidence.
MR. BABIN:
All right, Your Honor. In connection with this, I do want
to point out a special weather summary which is signed by
George W. Cry, who is a climatologist for the National
Weather Service. In the special weather summary and this is
for March, ‘73, which is prior to the April month. And it
said that precipitation was
(151)
heavy with measurable amountson twelve to sixteen days in
most areas. Excessive general rains fell in various sections on
A-44
the 4th, 5th, 15th and 16th and 23rd and 24th of March.
Monthly totals were in excess of ten inches throughout most
of the state except in the northwest and along the west
Louisiana coast. Totals were more than double March nor-
mals at most places in Central, East Central, Southwest,
South Central. And a map is provided which indicates Mor-
gan City falling within the South Central area. And from one
hundred to a hundred and fifty to nearly two hundred per
cent in the Northern Divisions. So, there was quite a bit of
rain in the north part of the state, also. Normals, when they
say --
THE COURT:
Are we interested in March or April?
MR. BABIN:
Well, March and April, Your Honor. The whole thrust of
the thing is, Your Honor, that flooding conditions occurred
along the Mississippi and Atchafalaya River areas, that as a
result of this flooding condition, the soil became saturated
and then the final deluge in April --
THE COURT:
Well, good. Proceed with the evidence.
MR. BABIN:
Okay. Normals, as indicated, are over a thirty year
period from 1931 to 1960. So, this deviation from the
normal is compared over a thirty year
a
~N wee eeeee
et re tee ee eet es meer ers
——
A-45
(152)
period. Another part of the data is for April, 1973. It in-
dicated on the face that the greatest one day of precipitation
was in the Morgan City area on April the 17th, of 7.81
inches. And, also, indicated in the daily precipitation schedu-
le that 5.03 inches fell on the 17th, and 7.81 fell on the 18th
of that month. Again, in the annual summary for 1973, they
indicate that April was a very wet month, departing from the
normal, which was established over a thirty year period, of
10.76 inches. Also, indicating in the subsequent months that
the weather was extremely dry and below normal rainfall
occurred. As will later be pointed out, in evidence, this will
become significant. That’s all that I have on that evidence,
Your Honor.
MR, BIENVENU:
Did you mark it?
MR. BABIN:
I offer and ask that it be introduced in evidence as Plain-
tiff’s exhibit P-9, 10 and 11 for identification were received
into evidence and filed with the Clerk of Court.)
...000...
NOTE: P-9, 10 and 11 - Special Weather Summary signed
by George W. Cry of the National Weather Service
(sent in the original).
:
\
t
...000...
CROSS EXAMINATION
BY MR. BIENVENU:
Q_ Mrs. Daigle, your house is higher than the road in front
of it, is it not?
(BY MRS. DAIGLE):
A Yes.
Q__ And your yard in the front sloped down to the road-
way, is that not true?
A Yes, sir.
Qs And do you know the size of your lot, approximately?
A Sixty by approximately one hundred and twenty.
Q_ Can you tell me approximately how far from the road
your house is located?
A About thirty feet.
(157)
(BY MR. BIENVENU):
a
A-47
Q___Now, you spoke about the rain on April the 17th, and |
believe you gave us some period of time but I am not sure
that I understood you. When did the rain start in April?
(BY MRS. DAIGLE):
A Late afternoon, five o’clock in the afternoon.
Qs And when did it stop?
A Well, it went on into the night. I don’t know exactly
when it stopped but it went into the night.
Qs April 17th, into the night?
A Yes.
Q __sDid it rain on the 18th all day?
A No, I am sure it stopped early on the 18th because I
took the pictures and it wasn’t raining.
(166)
(BY MR. BIENVENU):
Q Okay. Is the canal in the back of your house a drainage
canal?
(BY MRS. DAIGLE):
A Yes.
A-48
Qs Are there pumps to pull it out, or do you know?
A There are pumps.
Q And when it has been filled before, as you have said,
how long has it taken for water to be pumped out after the
rain has stopped?
A Well, it’s been several hours before it was down.
Q__Isee. And how long did it take for water to be pumped
out after that heavy rain of the 17th and 18th, if you recall?
A Not until late that afternoon.
Qs Afternoon of what? The 18th?
A The 18th.
Q__ So, it was then again several hours, as it had been in the
past?
A Oh, yes, sir.
...000...
(169)
...000...
BY MR. BIENVENU:
Q_ Mrs. Daigle, referring again to your two pictures that
you identified earlier, which were taken by you, and the first
~— re re ee
A-49
one is P-2-B, and I believe you said that you took that with
your back to the house and looking to your left, is that right?
(BY MRS. DAIGLE):
A That’sright. Yes.
Q__ And then P-2-A was taken looking in the same direc-
tion, isn’t that right?
A Yes, sir.
Q__ And on the left-hand bottom of the picture, there is a
post, fence post, is that fence post to your --
A Yes, sir.
Q Now, do you know vhat the mud in the street is?
A It looks like two piles of dirt from the neighbor.
(170)
Q_ The neighbor? They were in his front yard, weren't
they and they washed down into the street?
A No. It was on the neutral ground.
Q On the neutral ground?
A On the other side of the sidewalk.
Q__sBy neutral ground, you mean the ground immediately
adjacent to the sidewalk, but you have no middle median?
A-50
A No. Between the sidewalk and the street.
Q__— How long had that been there? Do you know?
A No, I sure don’t.
Q
Now, you took these pictures, both, on August (sic) the
18th, 1973? That was after the rain stopped, obviously?
A That’s right.
Q Did you take any pictures from your house looking
directly out into the street?
A No, I sure didn’t.
Q = You didn’t, huh?
A That's the only ones I took.
QI see. Let me ask you this. Looking at the one, P-2-B,
the greenery, is there not a line showing how high the water
actually came?
A Yes, there would be something right here.
Q__s Brown, a little brown debris, isn’t that right, and some
on the sidewalk as well?
A Yes, sir.
es
pup Ce
A-51
(BY MR. SHUMAKER):
A The damages on his house there did not indicate that
they were prior to a month or few months before. You can
take a brick there where - it’s cracked and you can tell if
it's a recent break or an old break. Anda everything was there
to indicate that the damages that I saw were very recent.
(BY MR. BIENVENU);
Q__ And I guess you saw that when you made up this report
in September, 1973, sir, is that right?
A I saw then and I saw back in July.
(233)
Q Oh, you examined the house yourself in July?
A Yes, sir. As I explained awhile ago, sir.
...000...
(252)
...000...
(BY MR. BIENVENU):
Q_Isee. All right, sir.
(BY MR, GUILLORY):
A In case of the type of rain we had on April the 17th,
A-52
when the streets were flooded, and as I recall, most of the
lot was flooded. I am sure that the clays get supersaturated
and we have evidence that buildings in that part of the coun-
try not only settle but they also heave. Mr. Shumaker just
testified, if I may refer to that, Your Honor.
...000...
(BY MR. BIENVENU):
Q But it is common knowledge, is it not, in the Morgan
City area that the place where these houses were built, were
built over swamp and there was no soil sustain to the weight
of those houses, isn’t that right?
(BY MR. GUILLORY):
A That there was no soil to sustain their weight, no, sir,
I can’t agree with that. Obviously, there was because for
seven years it sustained it.
Q___ How do you know?
A Because there was no cracking.
Q___— How do you know?
A I would think a housewife would have a crack in a house
after seven years and didn’t find it --
— oO. EOE EE ere.
A-53
Q ‘Yeah, but how do you know?
(265)
THE COURT:
Well, of course, this is based on the presumption and his
opinion is based on the presumption that the lady had lived
in the house since April of 1966 and that she hadn't noticed
any of these before April of "73. You are basing your whole
opinion on the presumption?
THE WITNESS:
Yes, sir. The fact that I see her for about seven hours a
day and five days a week. I am sure she would have discussed
it with me, as she did when it finally did occur.
...000...
(268)
(BY MR. BIENVENU):
Q__s And your thought is that there was no appreciable sink-
ing of that house before?
A The evidence indicates that.
Qs Sir?
A The lack of cracking indicates there was no appreciable
sinking.
...000...
A-54
(271)
BY MR. BABIN:
Q Mr. Guillory, have you read Dr. Capozzoli’s report?
(BY MR. GUILLORY):
A I see here in my letter, I state that I did. Of course, this
was quite some time ago and I don’t remember any details of
it.
Q At that time, in your report, in referring to the type of
houses, like brick veneer homes, that occur in this area that
are built in the area where Mrs. Daigle lived, didn’t you state
that it was your experience that there was slight settlement
or heaving during wet and dry periods?
A Yes, sir.
Q_ Now, this would be during normal wet and dry periods,
either before or after the big rain?
A Right.
Q Okay. And that there would be slight movement of
the foundation during these times, before and after?
A Yes, sir.
Q But that the big rain would have changed those con-
ditions, would it not?
A Well, it was a more extreme condition. I think the prin-
ee een are
et rere = eee ~
A-55
ciples involved are the same, sir, it’s just more of it.
I see. It would cause a greater heaving?
Yes, sir, and consequently a quicker lowering.
(272)
I see.
Because of the speed with which the canals were drain-
ar O PF A
Q___Now these are monolithic slabs, are they not, much like
a brick, say, on a smaller scale?
A Well, a monolithic means that you are pouring the slab
and the foundation simultaneously.
Q Isee. When I use the analogy like a brick, for instance,
this aggravated heaving, going up and down, if you dropped a
brick, would it be like dropping these monolithic slabs,
would it break because of the great heaving?
A That’s the principal involved, yes.
...000...
PROCEEDINGS OUT OF THE PRESENCE OF THE JURY:
THE COURT:
The Court, of course, is required to excuse the jury at
A-56
the completion of the plaintiff’s evidence in order to afford
counsel an opportunity to make any motions they might
wish to make, and that was the purpose of my excusing the
jury. Mr. Bienvenu.
MR. BIENVENU:
Yes, sir. As I understand it, the plaintiff Daigle rests.
THE COURT:
That is correct.
MR. BIENVENU:
At this time, if the Court please, we move the Court
to direct a verdict in favor of the defendant because the evi-
dence does not establish that there was a direct loss by flood
to the property of the insured. And, further, that the evi-
dence also establishes that the loss, as attempted to be estab-
lished by plaintiff, falls within the perils excluded by the
company.
THE COURT:
Have you completed your dissertation?
MR. BIENVENU:
I have, sir, unless you want to hear some argument from
me.
...000...
(THE COURT):
Of course, depending upon what the jury does one way
or the other, I don’t know that this isn’t a case regardless of
who wins it before the jury, I am not going to have -- I mean,
generally, if the defendant wins before a jury they go home
elated and happy and think the battle is over but I don’t
know in this case whether that’s true or not. Of course, I
have only heard the evidence from your expert. I don’t
know what Mr. Bienvenu’s experts are going to say. What
are you going to say, Doctor, caused that damage?
DR. CAPOZZOLI:
Just the long-term draw down of the water in the canal
of which this flood was a very
(277)
small portion of it.
THE COURT:
The flood was a portion of it?
DR. CAPOZZOLI:
Very small portion. According to the numbers here,
the canal was generally eight feet below the house and they
A-58
rapidly pumped out the canal after the flood down to ten
feet for a period of a few days, maybe.
THE COURT:
That’s something the lawyers are going to have to argue
about before the jury. My own impression would be a great
deal of that would depend upon the supposition that these
people had been in this house for a long time and never
noticed this before. And, as Mr. Guillory says, he knows that
his secretary would have told him about it had it happened
before.
I don’t know, but my personal viewpoint, unless there is
some evidence to the contrary, I would certainly have to as-
sume that it hadn’t happened before, when they hadn’t seen
it before.
MR. BIENVENU:
Hadn’t seen it.
THE COURT:
I understand the problem and I am faced with a legal
proposition. First, I am going to let the jury decide. I am
going to read them flood. I am going to read them the perils
and I am going to read them direct loss by flood. Maybe re-
sort to a dictionary will help. I don’t know. Thank you very
kindly.
...000...
(BY MR. BIENVENU):
Q All right. As a result of that information and your
study, did you reach any conclusion as to whether or not the
rain of April 17th and 18th, 1973, caused the damage com-
plained of by the Daigles?
(BY DR. CAPOZZOLI):
A Yes, I reached a conclusion. My conclusion was that the
rain had practically no effect on the action of the soil or
houses.
Q Why is that, sir?
A My analyses and the reasoning brought out this mech-
nism or movement of the soil under the houses. The area was
swamp. Water was standing in it, which I saw by aerial
photos taken by the Government and had trees growing in
it. The area was re-claimed. The levee was put around this
portion. Canals were dug, drainage was put in, water was
(295)
pumped out, and successive rain waters that fell at the house
were also pumped out. The net effect of this reclamation
process was to dry the soil. In other words, the water that
fell down there and stayed there before was not being taken
away. The drying could be more pronounced on the north
A-60
side of the Bellow residence and the Daigle residence, and all
the residences on that street. Of course, they were closest to
the canal. The fact that the canal had been for seven or more
years prior to the April, ‘72 (sic) floods gave the soil at least
that seven years to dry. Now, the drying of this soil would
cause it to settle, cause it to sink, cause it to move downward
for two reasons. Number one; when you dry something you
take the water away or lower the water level. You make it
heavier. An analogy, a person sitting in a bath tub. When the
tub is empty he feels fairly heavy, when the tub is full of
water, he is quite light. The same thing with soil. The water
you have supporting it up, the less it weighs. So, by putting
this drainage in and re-claiming this land and taking water
away, you are drawing the soil, making it heavier and causing
this soft humus, very soft clay, to compact under its own
weight. The second action that would occur as a result of
this organic matter which is not exposed to air instead of
being under water, as it was before, this organic matter is not
exposed to air. It will tend to decay whereas under water it
would not decay.
(296)
Q___ Even though some of it is under ground?
A Yes. Of course, organic matter is spongy and you would
get air into it. Now, these two actions would occur without
any weight on the soil whatsoever. I think the justification
for that analogy, the purpose of that analogy, is borne out
by pot holes that were seen in the yard, front and rear yard
of the Daigle residence. In other words, there was no weight
there but I could see it had been there, yet, you still have
little sinking of the ground causing the pot holes to develop.
A-61
So it’s my opinion that type of shrinkage of the soil occurred
as a result of the land development rather than the building
being on it or any building that may have occurred before
that.
Q_ What happened after that building was put on there?
A The weight of the building just added a third item to the
weight of the soil which was increased because of the lower-
ing of the water table. They had the decay of the humus and
now you have the weight of the building, so that’s going to
tend to make the building go down more than the normal
soil.
Q_I think I asked this, but in your opinion, would the
building go down, the slab go down evenly or unevenly?
A Most likely unevenly because the soil was not uniform.
(297)
Q Now, you heard the testimony about the rain water on
the 17th and 18th of April, 1973. And about flooding in the
streets and water in the canal in the rear and then the subse-
quent draining of the water, some say hurriedly, two days, I
think, or forty-eight hours. In your opinion, would that
flooding and subsequent draining have anything to do with
the soil immediately under the house, remembering that
water did not reach the house but only to some point in
front of the house, half-way up from the street out there?
A The total effect of the flooding, in my opinion, would be
negligible. There would be some occurrences as a result of the
flooding. For instance, the soil that had been dry, asa result
A-62
of the canal the water went down five or six feet, that soil
would get saturated. Of course, it would get saturated by
heavy rain, too. So, that soil was thoroughly saturated but
not much more so likely than in a heavy rain. Now, it was
brought out by Mr. Guillory that when you saturate the soil,
rather than dry it, you cause it to swell when you wet it and
it will shrink when it dries. Of course, fortunately for en-
gineering, when the soil swells after it has been dried, it only
swells out ten per cent. So, the net effect is a constant sink-
ing. So, if you take, you say this building went down an inch
as a result of the drying action in the previous years, it would
come up, in my opinion, no more than a tenth of an inch If
it went down two inches,
(298)
then it would be two tenths of an inch. So, of course, it
would go down -- this would happen after two inches or three
inches or four inches of rain, maybe not quite as much as it
would if it backed up to the house. As far as the canal being
drawn down rapidly versus a slow draw down affecting the
house, in my opinion, that had no effect. The flow of water
through the soil would be relatively slow whether the canal
was down within one day or one week, will not affect your
house. In my opinion, two months after the flood, one
month after the flood, it made no difference in the condi-
tion of the house whether the flood occurred or not.
Q___ How about six months after, seven months after, eight
months?
A The longer you go, the less effect it has.
...000...
A-63
(308)
...000...
THE COURT:
Well, the question is, Doctor, of course, I think we have
brought it to a good head before but if there had been no
cracking for the previous seven years and no settlement for
the previous seven years, would then, under those circum-
stances, you agree with Mr.
(309)
Guillory?
THE WITNESS (DR. CAPOZZOLI):
If someone told me, that I know personally, by looking
and inspecting it, a professional, that there were no cracks in
the house on April the 10th or 12th, and there were cracks
on April the 18th and 19th, then I would agree with him,
that that was the cause.
MR. BABIN:
No further questions.
(313)
MR. BIENVENU:
: A-64
One minute, please. The defendant rests, if the Court
please, in the Daigle case.
THE COURT:
Both sides may file any motions they wish at this time.
MR. BIENVENU:
We desire to file a motion for a directed verdict on all
the evidence because, as we pointed out, we are of the opin-
ion that the evidence overwhelmingly does not establish, I
mean overwhelmingly establishes this was not a direct loss by
flood. Plaintiff has not established that this was a direct loss
by flood, and the exclusions of the policy in addition, which
are made applicable by the testimony rendered here today
certainly would defeat any attempt to bring in this claim
under the policy provisions which are rather plain. And if
you would like me to refer particularly to the exclusions in
the policy --
THE COURT:
I think what you are referring to, I presume, is rain,
sleet, snow, hail, and so forth?
MR. BIENVENU:
That’s one part, and then you go to two and three,
numbers two and three in “A’’, two and three in “A’’,
Judge.
THE COURT:
A-65
Ihave them. Yes, sir, I am familiar with them.
MR. BIENVENU:
All right, and then “D” and ‘‘F’’ would equally apply.
THE COURT:
I see. Ihave them. All right,
(314)
sir.
MR. BABIN:
Your Honor, in connection, I would like to make my
own motion.
THE COURT:
Well, surely. You can make one but let me rule on his
first.
MR. BABIN:
Okay.
THE COURT:
Well, Mr. Bienvenu’s two-pronged attack, of course, is
really but one assertion, and that is that there is just no evi-
dence here that this damage was directly the result of a flood.
A-66
If he wins on that facet of the case, he automatically wins on
the perils excluded facet of the case.
I think it’s one and the same. I think it is going to bea
jury issue but, anyway, I am going to deny the motion.
(315)
000...
THE COURT:
I know, but the big problem here is what caused the
homes to sink and was it a direct result of this heavy rain. I
think that’s what the jury is going to have to decide. The
motion for a directed verdict is denied. There is no use to
argue the same matter twice.
I have given you a suggested form verdict, and in each
one I just say: did the Daigles sustain a direct loss to their
property because of flood? If they answer that yes, then in
dollars and cents how much damage was sustained as a proxi-
mate result of the flood.
And, of course, I will tell them the same thing about
the next case, the West case. And I am telling them, of
course, about property, we are talking about the home , and
that it must have happened during the terms of the policy.
Now, on the question of what is direct loss, I have got
to tell the jury something. I will read them the policy but I
will charge them, unless someone can show me why I should
not from 249 Federal Reporter at 164. I will tell them that
A-67
it is well settled that the word direct cause as used in all in-
surance policies is synonymous and legal intendment with the
word proximate cause.
(316)
Proximate cause has many times been defined as, et cetera.
‘Then, of course, there is a Fifth Circuit case and a Louisiana
case which is cited in that case, and that goes on a Supreme
Court case. The Louisiana case is the Norwhich case, N-O-R-
W-I-C-H, which you will find at 141 F 2d, 600. We can go
off the record.
(Whereupon an off the record discussion was had between
the Court and counsel.)
(Court Recessed.)
, oes Osee
(22)
(Title Omitted)
No. 19,624
SPECIAL VERDICTS
F.R.C.P, 49(a)
We, the jury in the above-captioned case, unanimously
find as follows:
INTERROGATORY NO. 1}
Did the Daigles sustain a direct loss to their property because
A-68
of “‘flood’’?
Answer ‘‘Yes”’ or ‘‘No”’ Answer: Yes
(23 )
If you answer the above “Yes”, then proceed to answer
number two (2).
INTERROGATORY NO, 2
In dollars ana cents, how much damage was sustained as a
proximate result of flood? ANSWER $12,084.56
We, the jury, have unanimously answered the above and
foregoing interrogatories as herein indicated, and herewith
return the same into court as our special verdicts.
s/ Russell Courville
FOREMAN OF THE JURY
Lafayette, Louisiana
February 3rd, 1976
Filed
Feb. 3, 1976
A-69
APPENDIX E
Excerpts from Transcript of Testimony
(West Case)
(328)
000...
(BY MR, BABIN):
Q Now, Mr. West, can you describe the weather condi-
tions on April the 17th of ‘73? Could you describe the con-
ditions in the street on the day after that in front of
(329)
your home?
(BY MR. WEST):
A On the 18th?
Qs Right.
A Well, when I came home on the evening of the 17th --
My wife had called me. She was driving a small car and the
streets were flooded about six o’clock and they couldn't get
home, and she went over to a friend’s house and called me
and asked me to pick her up and bring her home. And I
have a larger car, you know, with higher wheels. So, it was
about ten or twelve inches deep in the street on the evening
of the 17th.
Qs Yes, sir.
A-70
A So, I drove her home and water was, you know, in my
front yard about halfway to the house. And she isa little bit
afraid of things like that. So, she wasn’t going to stay there.
So I packed her bag and carried her back up to her friend’s
house to pick up her car and went to her mother’s for the
night. And I stayed there. I parked my car up the street and
walked back into the house and I stayed there.
Q_ I see. Now, did it or did it not continue to rain that
night?
A Most of the night. I wasn’t up all night but when I got
up the next morning there was water lapping in my front
door.
(330)
Q Water was in your house?
A. It was coming in the front door on the morning of the
lith. Yes, sir.
Q__Isee. Now, in your area are you on the down side of a
hill or up side of a hill, or can you describe the location of
your property in reference to the Bayou Vista area?
A Iam on the south side of Columbus Street and it goes
down hill from north to south. And the houses in front of
me, across the street, are about six or eight inches higher than
mine. And also, the street rises from east to west and I am on
about the highest part of the east-west route. The house next
door, on both sides of me, had four or five inches of water in
them. I had about an inch and a half in mine.
Q How much water would you say, standing, water, there
A-71
is with reference to the street below your house?
A There wes three or four feet in the streets. The streets
are lower, you know, because they was running thirty-five
horsepower motors up and down the street picking up people
and moving them out, the ones that didn’t leave.
Q I see. Mr. West, had you --
THE COURT:
Well, did you all leave?
THE WITNESS:
That day I left, yes, sir.
(331)
THE COURT:
In other words, they picked you up with boats?
THE WITNESS:
Yes, sir. I had left my car up the hill, six blocks away.
THE COURT:
You and your family were all picked up?
THE WITNESS:
No, sir. I took my wife out the night of the 17th.
A-72
THE COURT:
In a car?
THE WITNESS:
In a car. Yes, sir. I drove her out, back up there where
she had left her car.
THE COURT:
When did you all come back to the house?
...000...
(332)
000...
BY MR. BABIN:
A Mr. West, was there any noticeable damage to your
home prior to April 17, 1973?
(BY MR. WEST):
A No.
Do you have a garden?
I had. I have had in the back of the house, yes.
Did you used to work in that garden?
> O PP A
Yes.
A-73
Qs How often?
A Oh, a couple of days a week, when my wife could hem
me up out there.
(333)
Q I see. And if there had been any cracks, noticeable
cracks, in the brick, and so forth, do you think you would
have taken note of that while you were working in the
garden?
A Iam sure! would.
Q What happened with reference to your house? Did it
sustain any damage after the flood?
A I had darnage inside my house, tiles were coming up,
water stood there about eighteen or twenty hours or some-
thing in the house and I had a lot of sediment and mud and
stuff, and then afterwards the tiles started peeling up. I
didn’t have carpet but we picked everything up that I
thought would get damaged and put the TV set up on top of
the bed and what-have-you.
Q__siIsee. This was immediately after?
A This was the evening of the 17th.
Q_ I see. Now, subsequent to that time, did you notice
any structural damage to your home?
A Yes. A couple of weeks afterwards, it got to where I
A-74
couldn’t open my back door, the sliding glass door to my
patio wouldn’t open. And I checked to see if it was off the
rollers. It wasn’t. From the outside, you could see where the
wall was pulling away from the door facing, had it in a bind.
(334)
Q Did you have any problem in your kitchen?
A Yeah. There was a ridge under the tiles. You could see
a ridge down across the corner of the house and a subsequent
one formed off that one through the living room and out to
the front door.
Q__Isee. Did you take pictures of that structural damage?
A AA little later, I did, when it broke on through. The
ridges broke and the floor separated about an inch and a
half and completely cracked, moved about an inch and a
half,
(343)
...000...
(BY MR. WEST):
A s#nyway, I called Mr. Boudreaux (my insurance agent).
We were all out there talking and I called my agent and asked
him what I should do. He said, ‘‘Well, go ahead and clean it
up as best you can, do what you can, and there will be some
adjusters by when they get around there. They have two or
three in town now and just keep note of what all you do.” |
said, ‘‘Well, my air conditioner has shorted out,” and he said,
A-75
“Well, just get it fixed and keep the receipt.”’ And he said,
‘That will be quite all right.’’ He said, ‘‘they have adjusters
in the area when they get around, they'll get to you.”’ That’s
what I did.
(BY MR. BIENVENU):
Q Had you found it necessary to put fill on your lot, or
earth on your lot, at any time?
(BY MR. WEST):
A No, sir. I never had to fill that lot.
Q___— How about --
A Wait. One time during a hurricane a tree blew down in
my front yard and I had to fill the hole up where the tree
fell down. That’s the only time I ever hauled any fill.
...000...
(364)
000...
(BY MR. BABIN):
A-76
Q 3-11. And you changed about half a dozen tiles in
there, is that right?
(365)
A Yes, sir.
Q_ And I think you said you did something to a wall
board?
A I pulled the baseboards off in my hall and living room,
most of everywhere it was wet so that it would dry out, put
a fan on it to dry it out. That’s all.
000...
(BY MR. BABIN):
Q_ Now, when you went to bed finally that night, I believe
you said you stayed up along time. Where was the water the
last time you saw it before going to sleep?
(BY MR. WEST):
A It was in my house.
Q__ Oh, before going to sleep?
(356)
A Yes, sir.
Q_sI misunderstood. I thought you said the next morn-
ing.
A-77
A It was lapping in the front door. I tried to put a bunch
of towels and throw rugs, and things, and went on to bed.
Q It was lapping at the front door?
A __ It was coming under the front door.
Q__ And did you successfully keep it out?
A No, sir, I didn’t. I slowed it up a little bit. It was about
waist deep in the street and my car was five blocks away. It
was midnight and I didn’t feel like wading through that water
to get out of there, or I would have.
Q__iIam sure. When did you elevate the contents of your
house?
A While my wife was packing to leave that evening, we
picked the television set up and put it on top of the bed, and
we picked up, you know, other things that we thought would
be damaged.
Q_ And what evening are we talking about?
The 17th.
The evening of the 17th?
Yes, sir.
O Fr O P
Do you remember when that rain started?
(367)
A-78
A No sir, not specifically. Sometime that afternoon when
I came back by the office, they said that my wife had called
and left anumber. She worked and she had tried to go home
and she couldn’t get to the house.
Q__s Because of the water in the street?
A Yes, sir. She drives a little, small car and she was a-
fraid to drive in water and so she went to a friend’s house and
left word for me to call her.
Q Has there ever been water on the street in front of your
house before?
A Yes, sir, there has been water on the street.
Q Has there ever been water in the yard when there is
water in the street?
A Right on the edge, there sure has, maybe a foot on the
edge of the grass.
Is your house elevated from the street?
Yes.
Is it higher than the street?
Yes.
Six inches, would you say?
> O FF O FPF A
Oh, probably, I would say more than that.
—
A-79
More than that?
All the houses are built up like that.
It slopes, is that right?
P O FP Oa
Yes, sir, slopes to the street.
(368)
Q__—Had you ever had anybody examine your house for you
before to find out if there was anything wrong with the
structure?
A’ No, sir. When I bought the house, it was an FHA ap-
proved house and the VA inspected it. I bought it under a
VA loan and they approved it, and obviously I just accepted
their approval that it was all right.
Qs That was in 1969?
A Yes, sir.
Q_ And you think the house was about three years old
then?
A Yes, sir. Something like that, yes, sir.
Q__sDid you buy it from a former occupant, Robert Blair,
the man you bought it from?
A Right.
Qs Had he lived in the house before?
A-80
A Yes, he lived in the house. He lived in it and moved to
Mississippi, I believe.
Q_ Yes. Where was the air conditioning unit that you made
reference to?
A It was in the back yard on a little —— like you
normally set outside air conditioning units on.
Q Incidentally, was there water in the back yard?
A Yes, sir.
Q Was it as high as the front yard?
(369)
A Evidently, it was. The whole yard was covered.
Q_ The whole yard? You think water went over the in-
cline?
A Oh, yes, sir.
Q__ ‘The top of the incline?
A Yes, sir.
Q__— How soon did you say that these cracks that you have
had reference to appeared in your house after this flood?
A Well, we started noticing the back door, the sliding glass
door wouldn’t open two or three weeks after, something like
that. And I was checking to find out what was the matter
and I noticed the bricks was pulling away from the base-
board, and then I really got to looking and discovered the
little ridge on the floor and two or three other things at that
A-81
time.
Qs That’s the first time that you looked to see if there were
any cracks in your house?
A That’s the first time I had any trouble with my door
opening and closing.
Q__ And that’s what prompted you to do that?
A Yes,
Q __sIsit a wooden door?
(370)
A_ No, sir, it’s a sliding glass door, patio door.
Q__It wouldn’t move one way or the other?
A Well, it would with quite a bit of difficulty. It would
hang. You had to jiggle it around to get it to move. It got
progressively worse. You can’t open it now at all. The only
door I can go out of is my carport door.
...000...
(375)
...000...
(BY MR. BABIN):
Q__ Thank you, Carl. Now, at the time you bought your
home from the Blairs in 1969, did you inspect the house?
(376)
A-82
(BY MR. WEST):
A Yes.
Q__sDid you make a thorough inspection of the structure of
the house?
A No. My wife and I went throughthe house about four
different times before we decided to buy it, in and around,
all over.
Q__s And the house was three years old at this time?
A I believe that’s correct.
Q___ And did you observe any cracks in the house?
A No, I did not.
...000...
(385)
...000...
BY MR. BABIN:
Q Now, Mrs. West, had any of the damage that you have
identified in these pictures, had any of that or any of the
start of that type of damage occur prior to April the 17th, to
your knowledge?
(BY MRS. WEST):
A-83
Nothing that I can notice.
I see. Now, how often do you clean the house?
About twice a week.
Oo Fr» O P
I see. Thank you very much.
000...
(390)
(BY MR. BIENVENU):
Q__sODid you ever notice any pot holes in your yard? You
know what I am referring to as a pot hole, a hole of some cir-
cular dimension appearance?
No.
Not at all?
Nothing.
In other words, in the front or back?
Not that I can recall.
At any time before or after the flood?
I don’t believe. I can’t remember really noticing any.
Co FP @2 F? &2 3? ®0O °°?
I see. Now, you said, I believe, that you didn’t re-
member whether you had left the night of the flood or the
A-84
next morning?
A I believe it was that night, if I am not mistaken.
Q_ And when you left, did I understand you to say some-
thing about the water lapping at the front door?
A It was seeping through under the door when I left.
Q___— How did you get out of your house?
A Well, I couldn’t get my car in. My husband had a larger
car. He took me home.
Q How did you get to the car, to and from the car?
Through the front door, the side door?
A Through the side door.
Q_ Through the side door. Was there any water there?
(391)
A Yes, sir.
Q In the yard?
A The yard was full.
Q Was the yard completely covered with water, front and
A-85
Q Now, you say water was seeping through the front door.
Did you do anything to try to keep the water out?
A Well, I put rags and towels down around the doors.
Q You did that?
A I did that.
Q As! understand it, it was two or three days, you’re not
sure of how long it was, but you came back?
A Right.
Q When you came back, say it was two or three days later,
how did you get to your house?
A Well, the water was gone then.
Q All the water was gone?
A A\l the water was gone.
Q In the street?
A In the street was gone.
Q Okay. Now prior to this downpour of rain, had you
ever had rain which brought water onto the street and onto
your yard?
A Yeah, we have in the street, up about over a fourth
(392)
A86
of the yard.
Q Up about a fourth of the yard?
A Yes.
Q Once or several times?
A Oh, I don’t know. A time or two, when we have heavy,
you know, rains.
By a time or two, you are meaning one and two, or --
Well, I would say a couple of times anyway.
A couple of times?
> O PP @0
Yes, uh-huh. .
Q_ Was that long prior or immediately prior to this April
rainfall that we are talking about of April the 17th?
A Well, it was over a period of since we had been there.
I don’t remember the dates or anything.
MR. BIENVENU:
I have no further questions. I would just like to pass
these four photographs on to the jury which the witness
identified as being pictures of the same area.
THE COURT:
You may do so.
alll
A-87
MR. BIENVENU:
They have seen them -- but --
THE COURT:
You may proceed, counsel.
(393)
MR. BABIN:
As soon as the jury gets through.
RE-DIRECT EXAMINATION
BY MR. BABIN:
Q Mrs. West, after these other showers or rainstorms,
referred to by Mr. Bienvenu, came into your yard partially,
did you have any damage after that, that you could ob-
serve?
(BY MRS. WEST):
A Nothing.
Q This is the first time, after the April 17th deluge, 1973,
big rain and flood, that's the first time you noticed damage?
A Right.
A88
(398)
...000...
(BY MR. BABIN):
QI see. What did you find? What was the basis of your
report?
(BY MR. PATTERSON):
A Well, I found his house needed repairs, and I looked at
it and decided what I thought it would take to put his house
in a liveable condition, and then wrote him this letter telling
him how much I thought, at that time, it would take dollar-
wise.
Q What did you include as stated in your report?
A Well, I concluded at that time it would take about
twenty-two thousand, nine-hundred and fifty-six dollars to
make the necessary repairs. I recommended that a beefing up
or a -- let’s see -- demolish his present structure and replace it
with the same size structure but to possi>ly beef up the slab
to withstand any positive negative pressure that may occur
in any future flooding situation. And I guess that’s
(399)
it.
Q__sLet’s see, you stated, in other words, that the entire
structure would have to be demolished, is that correct?
A Well, if we were going to move in and do the work,
A-89
that’s the only way we do it.
Q Is there any other -- would there be any other practical
way to repair this house adequately?
A As far asl am concerned, no. We attempted to do some
of this underpinning one or two other times and we weren't
successful in doing it.
Q _sIsee.
A I understand that there are people that have done it and
some of the work has held up and some of it }-asn’t.
Q _sIsee.
A But! didn’t feel like we should expend ourselves under-
taking something like this, that in my own mind, as I said,
wouldn't work.
Q_ When you refer to underpinning -- pardon me. Upon
your inspection, or did you find, or did you not find the
slab, in fact, cracked?
A It was cracked in several areas.
Q___ How severe were these cracks?
A Well, they were so severe that if it had been my house,
I wouldn’t have lived in it like that.
OOO.
A-90
(402)
...000...
BY MR. BABIN:
Q_ What do you attribute the cause as to the damage that
you observed in the West home?
(BY MR. PATTERSON):
A I attribute it to the flooding of the area, the general
area,
Q__Isee. Specifically, what evidence did you observe con-
cerning the structure?
A Well, the evidence of the failures of the foundation. We
noticed a lot of this. It happened right after the flood in the
whole area, not only this area, but in other areas of Morgan
City. And it’s just like an earthquake, as far as I
(403)
am concerned. After an earthquake you observe things that
have happened and there wasn’t any earthquake. It was a
flood, so I don’t know of anything else to attribute it to.
Q__Isee. The type of foundation that the West house was
resting on, would you consider that type of foundation as
adequate for that house?
A It's a standard type of foundation that is used through-
out that area, so if it works, you know, I don’t argue with it.
ee ee
A-91
I see.
So I would say it would be adequate.
Concerning this specific area?
PrP O FP Aa
Yes. Oh, yeah, that’s standard. It’s a monolithic slab.
They used to call them a floating type slab and this is the
way they are building houses today.
Q __sIf you were building a house like this, would you do it
the same way?
A If I were to remove the debris of this house, I would
build it the same way.
MR. BABIN:
Thank you very much.
...000...
(408)
...000...
(BY MR. BIENVENU):
Q__Isn’t it a common occurrence in the Morgan City
(409)
area, in these new subdivision that have been built over old
A-92
swamp land, that houses built there do sink?
(BY MR. PATTERSON):
A Sir, I think whenever you put a load on a piece of
ground, it’s going to sink. You can walk on it and it’s going
to sink, yes, sir.
Q Well, you know this Bayou Vista area, don’t you?
A Yes, sir.
Q You know that was once a swamp?
A Yes, sir.
Q__s And you know that the land on which this house was
built was once a swamp?
A Yes, sir.
Qs And you say that house would sink just from the fact
that it was built on that land?
A Yes, sir. It would sink to a degree.
Q I see. And it doesn’t sink evenly, it depends on the
formation of the soil?
A It depends upon the formation of the soil?
Q__sIt doesn’t sink evenly because it depends upon the for-
mation of the soil in the area under the house, is that right?
——
a Oe eel oe
ne
A-93
A It’s possible.
Q___Now, when a house sinks, that’s what causes damage to
the structure, is that right?
A Is that right?
(410)
I am asking you the question.
No.
The sinking does not cause damage?
No, sir.
Q
A
Q
A
Q_ “hat causes damage?
A When the foundation fails.
Q Well, what do you mean by the foundation?
A
By the foundation, I mean something that is built on a
foundation bed that will support a structure of some sort.
Q Well, when the land below the foundation sinks, doesn’t
it carry the foundation with it?
A Not necessarily.
Qs Doesn’t the foundation rest on the land?
A In this particular case, it does.
A-94
Q Well, in all slab cases, unless you have piles?
A No, sir. That’s right. You can have a structural slab
foundation that does not rest on a normal ground founda-
tion. It’s a supported structure.
Q __sIf you have piles?
A Not necessarily piling. There are other type founda-
tions.
Q What other kinds?
A Spread footings.
Q Well, that’s a type of piles?
(411)
But it’s not piling, no, sir, it’s not.
Did this house have that?
Did it have what?
Spread footings?
No, it didn’t have.
This house was built on a slab?
Oo > O FF O PF
A It was a monolithic slab, typical type foundation that
the Federal Housing Authority passes, the Veteran’s Admin-
istration passes for that area.
eel ce 9 BO eS
at etn tte
Oe tweet o. pehaeeen
is ee > ,
A-95
What do you mean by monolithic, please?
A slab that is made, concrete poured all in one form.
And did this concrete slab that supports this house sink?
> O PF A
It obviously sunk in some areas, Yes. Sir.
Q__Andam I correct that you say that when a house is built
on land, such as this, it does sink because of the condition
of the soil and the weight of the house?
A Absolutely.
Q You didn’t see this house before the time you went
there in, say July?
A Yes, sir. I almost bought a lot on the corner. I think
this house, it may be two or three lots on the same street.
Q_ Well, you saw it but did you inspect it as you say
(412)
you did in that case?
A That’s what I went out there for, to inspect the lot.
Q_ I am not talking about the lot, I am talking about this
house?
A Oh, I stopped and visited with the Wests.
A-96
Before you went there in July?
Yes, sir.
Yes, sir, I guess I inspect -- by the nature of my business,
inspect every building that I probably walk into, to a de-
gree.
Q
A
Q You visited with them. Did you inspect the house?
A
I
Q Toadegree. You said you found slabs -- I mean, cracks
in the slab of the house when you were there in July, am I
correct?
Yes, sir.
Did you see that when you wentthere the first time?
No, sir.
A
Q
A
Q__sDid you examine the slab?
A No, sir, I didn’t make a thorough examination of it.
Q = You looked at it?
A I probably looked at the house.
(413)
Q_ Now, you, in your letter, say that due to the changes in
the water table, it’s not economically feasible to repair a
slab. What do you mean by the change in the water level?
ee a a eee ee eT
Wii species erick esse
A-97
A The change in what?
Q Water table.
A By the change in the water table, I mean there is a cer-
tain elevation in the ground, you know, below the surface
that has a lot of water in it, has a lot of moisture in it. This
table can be, in some places, as deep as one hundred feet,
probably, some places it can be one or two feet.
Q_sIn a swamp area, what would you expect it to be?
A In an undeveloped swamp area or developed swamp
area?
Q_ Take a developed swamp area, just as Bayou Vista.
A Oh, it could probably be a foot to two feet below the
surface, possibly three feet.
Q_ What change do you talk about in your letter when you
say the change in the water table?
A That means that this water table that I have just ex-
plained to you changed, the depth of it changes.
Q What causes that? Rain?
A_ No, the draining out of water in an area.
Q_ Allright. The draining out of water in an area causes
the lowering of the water table, is that right?
(414)
A-98
A Yes, sir, that’s right.
QQ And when you lower the water table the soil shrinks,
does it not?
A In most cases,
Q And when the soil shrinks the houses on top of it drop
down?
A The what?
Q ‘The house that’s on top of it, on shrinking soil, drops
down, does it not?
A That's right.
Q And this has happened all over Morgan City, hasn't it.
A Yes, sir.
Q__sIt has happened in the City of New Orleans, too. You
said you were a long time resident of that City.
A No sir, I didn't say that. I said I graduated from high
school in New Orleans.
Q All right, sir. Excuse me. Now, you said that if you re-
built this house you would beef up the slab. What do you
mean by that?
A I mean, that I would probably make the slab a little
wider. I would probably use larger, let's say, the grade
A-99
beams, I would make them a little bit bigger and I would
probably put a little more reinforcing steel in it.
(415)
Q_ Why? I thought you said it was standard?
A Why? I'll tell you why.
THE COURT:
Let him answer the question, please sir.
MR, BIENVENU;
All right.
BY THE WITNESS:
A Because if it ever flooded in that area again, I would
try to insure that the house did not fail so I would not have
to come into court like this.
BY MR, BIENVENU:
Q__s—Did you do that in other areas where you had built
houses?
A No, sir.
Q___ Beef up the monolithic slab?
A No, sir.
000...
A-100
(422)
PROCEEDINGS OUT OF THE PRESENCE OF THE JURY:
THE COURT:
The Court will permit Mr. Bienvenu to make any
motions that he might wish to.
MR, BIENVENU:
The defendant moves the Court to enter a directed ver-
dict herein in its behalf for the reason that there is no proof
in the record that any damage to the house of Mr. and Mrs.
West was a direct loss by flood within the meaning of the
policy. And, further, because of the fact that the evidence
brings the plaintiff's case within the exclusions of the policy
which I have previously referred to. Perils excluded were
A-1, 2 and 3, D.
THE COURT:
Had you completed, Mr. Bienvenu?
(423)
MR, BIENVENU:
Yes, sir.
THE COURT:
The Court will deny the motion. Of course, in this case,
a ee oe eee
A-101
there was direct evidence that there was actually water in the
house. That makes it a much stronger case than the other
case. The motion is denied.
(Court recessed),
(438)
(BY MR, BIENVENU):
Q You knew, did you not, or you were informed of the
fact that there had been a flooding as a result of heavy rain
in April, on the 17th and 18th?
(DR. CAPOZZOLI):
A Yes.
Q__sDid you form any conclusion as to whether or not that
flooding had any effect on the foundation of the house and
on the condition of the sunken corner that you found?
A Yes, I have an opinion, and I stated it quite strongly and
I said, I do not believe the flood waters caused any significant
changes in the house. All of the damage is due mostly to the
type of soil on which the house rests and the type of con-
struction.
A-102
(BY MR. BABIN):
Q Yes. Now, Doctor, in your report you said that flood
water could affect the settling, is that correct? Did
(449)
you say this in your report?
A Let me look at it and I will tell you. I said could have
accelerated the settling in one way.
Q Okay. Thank you very much.
A When the water rises, it will saturate the soil and will
leave the soil wet after the water drops. This heavier satur-
ated soil will weigh more and settle faster until it dries again.
Heavier rains which occur quite often in this area could cause
the same situation. Then, my summary was what I said be-
fore, I do not believe the flood water caused anysignificant
change in the house.
Q Well, Doctor, I am not going to argue with you but the
facts seem to defy your analysis in this respect, that no ob-
servable damage had occurred prior for up to six years, as the
Wests had owned that home, and then after the flood occur-
red, then suddenly the cracking appears. Now, as we went
through in the other case, how was this possible, you know,
of giving the assumption that no cracks appeared?
A Well, sir, I don’t know if this will be an answer to your
question but as a result of our discussion yesterday, I looked
around my bathroom while I was brushing my teeth and I
found a few cracks that I didn’t know about. I knew where
A-103
to look and I found them in my bedroom. I stopped looking
around the rest of the house and that’s a perfect example.
...000...
(455)
...000...
(PROCEEDINGS OUT OF THE PRESENCE OF THE JURY)
THE COURT:
The parties may make any motions they might wish to
make at this time. Mr. Bienvenu?
MR. BIENVENU:
All right. Defendant moves the Court to enter a direct-
ed verdict herein in its behalf for the reason that plaintiff
has failed to prove his claim under the policy of insurance.
It has failed to satisfy the requirements of the policy. It has
failed to show that the damage to which it refers was a direct
loss by flood.
Further, plaintiff has failed to introduce evidence to
show the amount which it would cost to repair or replace
the property with material of like kind and quantity within a
reasonable time after such loss without allowing for increased
cost of repair or reconstruction by reasonable ordinary ex-
ception.
THE COURT:
The motion is --
A-104
MR. BIENVENU:
Further, the evidence establishes that the loss comes
within the exclusions to which we made reference, exclu-
sions to the policy to which we made reference earlier A-1
and D.
THE COURT:
The motion is denied.
...000...
(84)
...000...
(Title Omitted)
No. 19,622
SPECIAL VERDICTS
F.R.C.P. 49(a)
We, the jury in the above-captioned case, unanimously
find as follows:
INTERROGATORY NO. 1
Did the Wests sustain a direct loss to their property because
of ‘flood’?
Answer ‘‘Yes”’ or ‘‘No”.
ANSWER: Yes
—— =
A-105
If your answer to No. 1 is “‘yes’’, then proceed:
INTERROGATORY NO. 2
In dollars and cents, how much damage was sustained to the
property as a proximate result of ‘“‘flood’’?
ANSWER: $17,500
(85)
We, the jury, have unanimously answer2d the above and
foregoing interrogatories as here in indicated, and herewith
return the sarne into court as our special verdicts.
s/ Russell Courville
FOREMAN OF THE JURY
Lafayette, Louisiana
February 3rd, 1976
Filed: Feb. 3, 1976
A-106
APPENDIX F
Flood Insurance Policies
NOTE: (1) The policies of flood insurance of the Daigles
and the Wests were reproduced from counsel's file copies and
not from the original exhibits (P-3 & W-2) introduced at trial
because the record could not be located at the time this
petition was being prepared. (See letter dated November 29,
1978 of the Deputy Clerk of Court of the United States Dis-
trict Court, Western District of Louisiana pp. A-118-9, infra).
(2) The standardized flood policy forms are identical in both
the Daigle & West exhibits, thus that form is only reproduced
once herein (pp. A-107-115). The individual Application &
Declarations Forms of the Daigles’ and the Wests’ reproduced
herein (pp. A-116-7), each were stapled to a standardized
flood policy form in the original exhibits.
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Jao amen,
A-107
FLOOD INSURANCE POLICY
(Issued Pursuant to the National Flood Insurance Act of 1968
or Any Acts Amendatory Thereof)
INSURANCE COMPANIES MEMBERS OF
NATIONAL FLOOD INSURERS ASSOCIATION
NEW YORK, N.Y.
IN CONSIDERATION OF THE PROVISIONS AND STIPULATIONS
HEREIN OR ADDED HERETO including the statements in the appli-
cation and declarations form attached hereto, and of the premium
specified in said application and declarations form, THIS COMPANY,
for the term specified from inception date shown in said application
and declarations form At Noon (Standard Time) to expiration date
shown in said application and declarations form At Noon (Standard
Time) at location of the property involved, to an amount not exceed-
ing the amount(s) of insurance specified in said application and declara-
tions form, DOES INSURE the insured named and legal representatives,
to the extent of the actual cash value of the property at the time of
loss, but not exceeding the amount which it would cost to repair or re-
place the property with material of like kind and quality within a
reasonable time after such loss, without allowance for any increased
cost of repair or reconstruction by reason of any ordinance or law
regulating construction or repair; and without compensation for loss
resulting from interruption of business or manufacture, nor in any
event for more than interest of the Insured, against all DIRECT LOSS
BY “FLOOD” as defined herein, to the property described while lo-
cated or contained as described in the application and declarations form
attached hereto, or pro rata for 30 days at each proper place to which
any of the property shall necessarily be removed for preservation from
the peril of ‘Flood’, but not elsewhere.
Assignment of this policy shall not be valid except with the written
consent of this Company.
This policy is made and accepted subject to the foregoing provisions
and stipulations and those hereinafter stated, which are hereby made a
part of this policy, together with such other provisions, stipulations
and agreements as may be added hereto, as provided in this policy.
A-108
“Flood” —-Wherever in this policy the term “flood” occurs, it shall be held to mean
a general and temporary condition of partial or complete inundation of normally dry
land areas from (1) the overflow of inland or tidal waters, (2) the unusual and rapid
accumulation or runoff of surface waters from any source, or (3) mudslides which are
caused or precipitated by accumulations of water on or under the ground.
Perils Excluded—This Company shall not be liable for loss:
(a) By (1) rain, snow, sleet, hail or water spray; (2) freezing, thawing or by the
pressure or weight of ice or water, except where the property covered has been
simultaneously damaged by flood; or (3) water, moisture or mudslide damage of any
kind resulting primarily from conditions, causes or occurrences which are solel
related to the described premises or are within the control of the Insured (incl
ing but not limited to design, structural or mechanical defects, failures, stoppages
or breakages of water or sewer lines, drains, pumps, fixtures or equipment,
seepage or backup of water, or hydrostatic pressure) or any condition which causes
flooding which is substantially confined to the described premises or properties
immediately adjacent thereto;
(b) Caused directly or indirectly by (1) hostile or warlike action in time of peace
or war, including action in hindering, combating or defending against an actual,
impending or expected attack, (i) by any goverament or sovereign power (de jure
of de facto), or by any authority maintaining or using military, naval or air forces,
or (ii) by military, naval or air forces, or (iii) by an agent of any such government,
power, authority or forces, it being understood that any discharge, explosion or
use of any weapon of war employing nuclear fission or fusion shall be conclusively
presumed to be such a hostile or warlike action by such a government, power,
authority or forces; (2) insurrection, rebellion, revolution, civil war, usurped
power, of action taken by governmental authority in hindering, combating or de-
fending against such an occurrence;
(c) By nuclear reaction or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled, or due to any act or condition incident to any of the
foregoing, whether such loss be direct or indirect, proximate or remote, or be in
whole or in part caused by, contributed to, or aggravated by the peril insured
against by this policy;
(d) by fire, windstorm, explosion, erosion, earthquake, landslide or any other
earth movement except such mudslides as are covered under the peril of flood,
or by theft;
(e) Caused by or resulting from power, heating or cooling failure, unless such
failure results from physical damage to power, heating or cooling equipment
situated on premises where the property covered is located, caused by the peril
insured against;
(f) Occasioned directly or indirectly by enforcement of any local or state ordinance
or law regulating the construction, repair or demolition of building(s) or structure(s);
(g) Caused directly or indirectly by reglect of the Insured to use all reasonable
means to save and preserve the property at the time of and after an occurrence
of the peril insured against by this policy.
te we
a te a et RS ee ee ee oe A he ee Nee ete
A-109
Property Not Covered—This policy shall not cover:
(a) Accounts, bills, currency, deeds, evidences of debt, money, securities, bullion,
manuscripts or other valuable papers or records, numismatic or philatelic property;
(b) Fences;
(c) Outdoor swimming pools, bulkheads, wharves, piers, bridges, docks or other
open structures located on or partially over water or property thereon.
Pair and Set Clause—if there is loss of an article which is part of a pair or set,
the measure of loss shall be a reasonable and fair proportion of the total value of
the pair or set, giving consideration to the importance of said article, but such
loss shall not be construed to mean total loss of the pair or set.
Concealment, Fraud—This entire policy shall be void if, whether before or after
a loss, the Insured has willfully concealed or misrepresented any material fact
or circumstance concerning this insurance or the subject thereof, or the interest
of the Insured therein, or in case of any fraud or false swearing by the Insured
relating thereto.
Other Insurance—This Company shall not be liable for a greater proportion of any
loss, less the amount of deductible, from the peril of flood than the amount of
insurance under this policy bears to the whole amount of flood insurance (exclud-
ing therefrom any amount of “excess insurance” as hereinafter defined) covering
the property, or which would have covered the property except for the existence
of this insurance, whethey collectible or not.
In the event that the whole amount of flood insurance (excluding therefrom
any amount of “excess insurance” as hereinafter defined) covering the property
exceeds the maximum amount of insurance permitted under the provisions of the
National Flood Insurance Act of 1968, or any acts amendatory thereof, it is hereby
understood and agreed that the insurance under this policy shall be limited to a
proportionate share of the maximum amount of insurance permitted on such
property under said Act, and that a refund of any extra premium paid, computed
on a pro rata basis, shall be made by this eo | upon request in writing sub-
mitted not later than 2 years after the expiration of the policy term during which
such extra amount of insurance was in effect.
“Excess Insurance” as used herein shall be held to mean insurance of such
part of the actual cash value of the property as is in excess of the maximum
amount of insurance permitted under said Act with respect to such property.
Added and Waiver Provisiens—The extent of the application of insurance under
this policy and of the contribution to be made by this Company in case of loss,
and any other provision or agreement not inconsistent with the provisions of this
policy, may be provided for in writing added hereto, but no provision may be
waived except such as by the terms of this policy is subject to change.
No permission affecting this insurance shall exist, or waiver of any provision
be valid, unless granted herein or expressed in writing added hereto. No provi-
sion, stipulation or forfeiture shall be held to be waived by any requirement or
proceeding on the part of this Company relating to appraisal or to any examination
provided for herein.
A-110
PROPERTY COVERED
A. Dwelling: The term “dwelling” shall mean a residential building designed for
the occupancy of from 1 to 4 families and occupied principally for dwelling pur-
poses by the number of families stated herein.
When the insurance under this policy covers a dwelling, such insurance shall in-
clude additions in contact therewith; also, if the property of the owner of the
described dwelling and when not otherwise pf g building equipment, fixtures
and outdoor equipment, all pertaining to the service of the described premises
and while within an enclosed structure located on the described premises; also,
materials and supplies while within an enclosed structure located on the described
premises or adjacent thereto, intended for use in construction, alteration or repair
of such dwelling or appurtenant private structures on the described premises.
The Insured may apply hy 10% of the amount of insurance applicable to the
dwelling covered under this policy, not as an additional amount of insurance, to
cover loss to appurtenant enclosed private structures (other than the described
dwelling and additions in contact therewith) located on the described premises.
This extension of coverage shall not apply to structures (other than structures
used exclusively for private garage purposes) which are rented or leased in whole
or in part, or held for such rental or lease, to other than a tenant of the described
dwelling, or which are used in whole or in part for commercial, manufacturing or
farming purposes.
B. Contents: When the insurance under this policy covers contents, such insur-
ance shall cover all household and personal property usual or incidental to the
occupancy of the premises as a dwelli xcept animals, birds, fish, aircraft,
motor ve lester than moored eqagmant pertaining Yo the service othe
remises and not licensed for highway trailers on wheels, watercraft includ-
fag their furnishings and equipment, business property, other property not covered
under the provisions of this policy, and any more specifically covered in
wick ein pat by other insurance incu hepa iewed agua Int
eo Se to the Insured or members of the 's family of the same
ousehold, or for which the Insured may be liable, or, at the option of the Insured,
belonging to a servant or t of the Insured; all while within an enclosed struc-
ture located on the described premises.
The Insured, if not the owner of the described premises, may apply - Ay 10%
of the amount of insurance — to the contents covered under this policy,
not as an additional amount of insurance, to cover loss to improvements, altera-
tions and additions to the described dwelling and to appurtenant enclosed private
structures as described above.
This Company shall not be liable for loss in any one occurrence for more than:
1, $500.00 in the aggregate on paintings, etchings, pictures, tapestries, art
glass windows and other cone art (auch os tet not limited to statuary,
marbles, bronzes, antique furniture, rare books, antique silver, porcelains,
rare glass or bric-a-brac);
2. $500.00 in the aggregate on jewelry, watches, necklaces, bracelets, mn,
cenpey and semi-precious stones, articles of gold, silver or platinum a
urs of any article containing fur which represents its principal value.
C. Debris Removal: This insurance covers expense incurred in the removal of
debris of or on the dwelling, appurtenant enclosed private structures or contents
covered hereunder, which may be occasioned by loss caused by the peril insured
against in this policy.
The total liability under this policy for both loss to property and debris removal
expense shall not exceed the amount of insurance applying under this policy to
the property covered.
eNO orcs
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A-111
PROPERTY NOT COVERED
In addition to the kinds of pr which are otherwise excluded under this
policy, the following are also ex from coverage:
A Land values; lawns, trees, shrubs or plants; underground structures or equip-
ment outside the foundation walls of the dwelling covered hereunder;
B. Those portions of walks, driveways and other paved surfaces which are outside
of the dwelling covered hereunder.
DEDUCTIBLES
A. With respect to loss to the dweiling, appurtenant enclosed private structures
or debris remova! covered hereunder, this Company shall be liable for only the
amount of loss in any one occurrence which is in excess of: (a) $200. or (b) 2%
of the amount of insurance hereunder applying to the dwelling, whichever is
the greater.
B. With respect to loss to contents or debris removal covered hereunder, this
Company shall be liable for only the amount of loss in any one occurrence
which is in excess of: (a) $200. or (b) 2% of the amount of insurance hereunder
applying to the contents, whichever is the greater.
A-112
Cancellation of Policy or Reduction in Amount of Insurance-——This policy may be
cancelled at any time at the request of the Insured, in which case this Company
shall, upon demand and surrender of this policy, refund the excess of paid pre-
miums above the customary short rates for the expired ere provided, however
that the premium paid for the then current policy term shall be fully earned if
the Insured retains an interest in the property covered at the location described
in the application and declarations form.
The amount of insurance under this policy may be reduced at any time at the
request of the Insured, in which case this Company shall, upon demand, refund
the excess of paid poe above the customary short rates for the expired time
for the amount of the reduction; provided, however, that the premium paid for the
then current policy term shall be fully earned to the extent that the Insured retains
an interest in the property covered at the location described in the application
and declarations form.
This policy may be cancelled by this Company for non-payment of the premium
by giving to the Insured a 20-days’ written notice of cancellation,
Conditions Suspending or Restricting Insurance—Unless otherwise provided in
writing added hereto, this Company shall not be liable for loss occurring while
the hazard is increased by any means within the control or knowledge of the
Insured, provided, however, this insurance shall not be prejudiced by any act or
neglect of any person (other than the Insured), when such act or neglect is not
within the control of the Insured.
Alterations and Repairs—Permission granted to make alterations, additions and
repairs, and to complete structures in course of construction. In the event of loss
hereunder, the Insured is permitted to make reasonable repairs, temporary or
permanent, provided such repairs are confined solely to the protection of the
property from further damage and provided further that the Insured shall keep an
accurate record of such repair expenditures. The cost of any such repairs directly
attributable to damage by the peril insured against shall be included in determin-
ing the amount of loss hereunder. Nothing herein contained is intended to modify
the policy requirements applicable in case loss occurs, and in particular the re-
quirement that in case loss occurs the Insured shall protect the property from
further damage.
property of others covered under 5 policy shall be adjusted with the Insured for
the account of the owners of saic property, except that the right to adjust such loss
with said owners is reserved to this Company. Any such insurance under this policy
shall not inure directly or indirectly to the benefit of any carrier or other bailee
for hire.
Property of Others—Unless otherw — provided in be ah added hereto, loss to any
Liberalization Clause—If during the period that insurance is in force under this
policy, or within 45 days prior to the inception date thereof, on behalf of this
ompany there be adopted under the National Flood Insurance Act of 1968, or any
acts amendatory thereof, any forms, endorsements, rules or regulations by whic
this policy could be extended or broadened, without additiona —— charge,
by endorsement or substitution of form, then such extended or broadened insur-
ance shall inure to the benefit of the Insured hereunder as though such endorse-
ment or substitution of form had been made.
Statutory Provisions—Any terms of this policy which are in conflict with the
statutes of the State wherein the property is located are hereby amended to con-
form to such statutes, — that in cases of conflict with applicable Federal law
or regulation, such Federal law or regulation shall control the terms of this policy.
—
A-113
Loss Clause—Payment of any loss under this policy shall not reduce the amount
of insurance applicable to any other loss during the policy term which arises
out of a separate occurrence of the peril insured against hereunder; yp mee that
all loss arising out of a continuous or protracted occurrence shall be deemed to
constitute loss arising out of a single occurrence.
Mortgage Clause (Applicable to building items only and effective only when policy
is made payable to a mortgagee (or trustee) named in the application and declara-
tions form attached to this policy.)—
Loss, if any, under this policy, shall be 7 to the aforesaid as mortgagee
(or trustee) as interest may appear under all present or future mortgages upon
the property described in which the aforesaid may have an interest as mortgagee
(or trustee), in order of precedence of said mortgages, and this insurance, as to
the interest of the mortgagee (or trustee) only therein, shall not be invalidated by
any act or neglect of the mortgagor or owner of the described property, nor by any
foreclosure or other proceedings or notice of sale relating to the property, nor by
any change in the title or ownership of the property, nor by the occupation of the
premises for purposes more hazardous than are permitted by this policy; provided,
that in case the mortgagor or owner shall neglect to pay any premium due under
this policy, the mortgagee (or trustee) shall, on demand, pay the same.
Provided, also, that the mortgagee (or trustee) shall notify this Company of any
change of ownership or occupancy or increase of hazard which shall come to the
knowledge of said mortgagee (or trustee) and, unless permitted by this policy, it
shall be noted thereon and the mortgagee (or trustee) shall, on demand, pay the
premium for such increased hazard for the term of the use thereof; otherwise
this policy shall be null and void.
If this policy is cancelled by this Company, it shall continue in force for the
benefit only of the mortgagee (or trustee) for 20 days after written notice to the
mortgagee (or trustee) of such cancellation and shall then cease, and this Company
shall have the right, on like notice, to cancel this agreement.
Whenever this Company shall pay the mortgagee (or trustee) any sum for loss
under this policy and shall claim that, as to the mortgagor or owner, no liability
therefor existed, this Company shall, to the extent of such payment, be thereupon
legally subrogated to all the rights of the Hy to whom such — shall be
made, under all securities held as collateral to the mortgage debt, or may, at its
option, pay to the mortgagee (or trustee) the whole principal due or to grow due
on the mortgage with interest, and shall thereupon receive a full assignment and
transfer of the mortage and of all such other securities; but no subrogation shall
impair the right of the mortgagee (or trustee) to recover the full amount of said
mortgagee’s (or trustee's) claim.
Mortgagea Obligations—if the Insured fails to render proof of loss, the named
mortgagee (or trustee), upon notice, shall render proof of loss in the form herein
specified within 60 days thereafter and shall be subject to the provisions of this
policy relating to appraisal and time of payment and of bringing suit.
A-114
Requirements In Case of Loss—The Insured shall give written notice, as soon as
practicable, to this Company of any loss, protect the property from further dam-
age, forthwith separate the damaged and undamaged prop y and put it in the
best possible order. Within sixty days after the loss, unless such time is extended
in writing by this ee, the Insured shall render to this Company a proof of
loss, signed and sworn to by the Insured, stating the knowledge and belief of the
Insured as to the following: the time and origin of the loss, the interest of the
Insured and of all others in the property, the actual cash value of each item
thereof and the amount of loss thereto, all encumbrances thereon, all other con-
tracts of insurance, whether valid or not, covering any of said property, any
changes in the title, use, occupation, location, possession or exposures of said
property since the issuing of this policy, by whom and for what Bay any
uilding herein described and the several parts thereof were occupied at the time
of loss. The Insured, at the option of this Company, may be required to furnish a
complete inventory of the destroyed, damaged undamaged property, showin
in detail quantities, costs, actual cash value and amount of loss claimed, an
wee ~’ and specifications of any building, fixtures or machinery destroyed
or damaged.
The Insured, as often as may be reasonably required, shall exhibit to any person
designated by this Company all that remains of any property herein described,
and submit to examinations under oath by any person named by this Company, and
subscribe the same; and, as often as may be reasonably required, shall produce
for examination all books of account, bills, invoices and other vouchers, or cer-
tified copies thereof if originals be lost, at such reasonable time and place as may
be designated by this Company or its representative, and shall permit extracts
and copies thereof to be made.
Appraisal—in case the Insured and this Company shall fail to agree as to the
actual cash value or the amount of loss, then, on the written demand of either
each shall select a competent and disinterested appraiser and notify the other of
the = ry selected within 20 days of such demand. The appraisers shall first
select a competent and disinterested umpire; and failing for 15 days to agree
upon such umpire, then, on request of the Insured or this Company, such umpire
shall be selected by a judge of a court of record in the State in which the insured
property is located. The appraisers shall then apeceiee the loss, stating separately
actual cash value and loss to each item; and, failing to agree, shall submit their
differences, only, to the umpire. An award in writing, so itemized, of any two when
filed with this Company shall determine the amount of actual cash value and loss.
Each appraiser shall be = by the pry selecting him and the expenses of ap-
praisal and umpire shall be paid by the parties equally.
Company's Options—It shall be optional with this Company to take all, or any
part, of the property at the agreed or appraised value, and also to repair, rebuild
or replace the property destroyed or damaged with other of like kind and quality
within a reasonable time, on giving notice of its intention so to do within 30 days
after the receipt of the proof of loss herein required.
Abandonment—There shall be no abandonment to this Company of any property.
When Loss Payable—The amount of loss for which this Company may be liable
shall be payable 60 days after proof of loss, as herein provided, is received by this
Company and ascertainment of the loss is made either by agreement between the
Insured and this Company expressed in writing of by the filing with this Company
of an award as herein provided.
Action Against the Company—No suit or action on this policy for the recovery of
A-115
any claim shall be sustainable in any court of law or —_ unless all the require-
ments of this policy shail have been complied with, and unless commenced within
12 months next after the date of mailing of notice of disallowance or partial dis-
allowance of the claim. An action on such claim against the Company may be
instituted, without es to the amount in regen y in the United States
District Court for the district in which the property shall have been situated.
Subrogation—In the event of any payment under this policy, this Company shall be
subrogated to all of the Insured’s right of recovery therefor against any party,
and this Company may require from the Insured an assignment of all right of
recovery against any party for loss to the extent that payment therefor is made
by this Company. The Insured shall do nothing after loss to prejudice such right;
however, this insurance shall not be invalidated should the Insured waive in writing
ay’ to a loss any or all right of recovery against any party for loss occurring to
he described property.
IN WITNESS WHEREOF, this Company has executed and attested
these presents; but this policy shall not be valid unless countersigned
by the duly authorized representative of this Company.
Attorney-in-Fact for the Insurance Companies
Members of National Flood Insurers Association
SPECIAL PROVISIONS
Wherever the term “Company” appears in this policy, it shall mean the
Insurance Companies members of National Flood Insurers Association.
A list of all such Companies is on file in the office of the State Insur-
ance Department of the State where the property covered is located
and a copy may be obtained upon request from the office of the
National Flood Insurers Association, 160 Water Street, New York, N.Y.
10038.
All notices or other communications required by this policy to be given
to the Company shall be given to the Servicing Office designated on the
Application and Declarations Form attached to this policy, and such
notice shall be considered to constitute notice to the Company.
A-116
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A-118
UNITED STATES DISTRICT COURT
Office of the Clerk
Western District of Louisiana
P.O. Box 106
Shreveport, La. 71161
November 29, 1978
Mr. Leopold B. Babin
Attorney at Law
P.O. Box 406
Houma, LA 70361
RE: CIVIL ACTION NO. 19622-L
Karl D. West vs.
National Flood Insurers Assoc.
CIVIL ACTION NO. 19624-L
Andrew J. Daigle vs.
National Flood Insurers Assoc.
Dear Sir:
Pursuant to your request for copies of Exhibit W-2 in
19622 and Exhibit P-3 in 19624, we show the above cap-
tioned records not having been returned by the Court of
Appeals.
However, in a conversation with the Court of Appeals,
they show having mailed them back to our office on August
7, 1978 with a copy of the mandate. In checking their file,
they show no receipt from our office in receiving said records
—
or mandate.
aks
RECEIVED
Dec 1, 1978
A-119
Very truly yours,
ROBERT H. SHEMWELL, CLERK
By: s/ Angene K. Seigfried
Deputy Clerk
4&-120
APPENDIX G
Motions, Notice of Appeals, Memorandum, Rulings, Petition
for Rehearing, and Order Extending Time to file Petition for
Writ of Certiorari
(86)
(Title Omitted)
No. 19,622
19,624
MOTION FOR JUDGMENT NOTWITHSTANDING THE
VERDICT AND IN THE ALTERNATIVE, FOR A
NEW TRIAL, IN EACH CASE
Defendant, National Flood Insurers Association shows the
Court that a motion for a directed verdict was filed herein in
each case at close of the evidence of the plaintiff and at the
close of all of the evidence in the case, and that the motions
were denied by the Court.
Defendant, now moves the Court to have the verdict
entered herein and the judgment which was entered thereon
in each case, set aside and a judgment rendered in favor of
defendant in accordance with the motion for a directed
(87)
verdict, on the fo!:wwing grounds, to-wit:
A.
Plaintiff has not adduced sufficient evidence on which to
base the verdict in his favor and against defendant.
A-121
B.
The evidence does not establish that the property of the
plaintiff was damaged as a result of a ‘‘direct loss by flood’’
within the terms and provisions of the policy of insurance.
/
C.
The evidence establishes that the damage, if any, to the
property of plaintiff, subsequent to the date of the policy
of insurance was not a direct loss by flood.
D.
The evidence establishes that the damage to the property
of plaintiff, if any, was a result of an excluded peril of the
policy and within the exclusive provisions of Paragraph A,
(3), because it was caused by design, structural or mechani-
cal defect and failures.
E.
The evidence establishes that the damage to the property
of plaintiff, if any, was a result of an excluded peril of the
policy and within the exclusive provisions of Paragraph (d),
because it was caused by earth movement.
...000...
(24)
(Title Omitted)
No. 19,624
A-122
HUNTER, SENIOR JUDGE:
MEMORANDUM RULING ON PENDING MOTIONS
Defendant has filed post-trial motions insisting that it was
for the court and not the jury to decide whether the alleged
loss to the property of plaintiff was a ‘direct loss by flood.”
In addition, defendant insists that the court
(25)
and not the jury should have decided whether the damage, if
any, to plaintiff’s property was a result of the excluded
peril. In addition, defendant insists that the evidence adduc-
ed by the plaintiff does not establish ‘“‘the amount w
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