JACKSON (AP) — A Pascagoula couple will argue in a federal appeals court in New Orleans on Aug. 6 that Nationwide Mutual Insurance Co. should be forced to cover the storm surge damage to their home from Hurricane Katrina.

Nationwide appealed a 2006 decision by U.S. District Judge L.T. Senter Jr. that Paul and Julie Leonard cannot collect damages from storm surge caused by Katrina because Nationwide’s policies do not cover wind-driven water damage.

Both sides claimed victory after in the wake of Senter’s ruling, but the Columbus, Ohio-based insurer appealed because it wants the higher court to review technical portions of the judge’s ruling. The Leonards filed a cross appeal.

Senter said the Leonards could be compensated for damage that they could prove was caused by high winds.

Senter’s ruling, if unchallenged, would have set a precedent for hundreds of other lawsuits against the insurance industry, which has denied billions of dollars in claims after the Aug. 29, 2005 hurricane ravaged the coasts of Mississippi and Louisiana.

The 5th U.S. Circuit Court of Appeals in New Orleans set oral arguments for Aug. 6, only a few weeks before the second anniversary of Katrina.

Another issue raised by Senter’s ruling was the ambiguity of a key policy provision Nationwide has used to deny coverage.

Nationwide and other insurers say their homeowners policies cover damage from a hurricane’s wind, but not in cases where it resulted from a combination of wind and water.

‘‘This reading of the policy would mean that an insured whose dwelling lost its roof in high winds and at the same time suffered an incursion of even an inch of water could recover nothing under his Nationwide policy,’’ Senter wrote.

The Leonards had estimated the total damage to their home at $130,253. They said $47,365 in damage was caused by wind. Nationwide paid only $1,661, blaming the remainder on the storm surge.

The couple’s attorneys had asked for more than $158,000 for the damage to the house and its contents, plus interest and attorneys’ fees and expenses. Senter, however, ruled that Nationwide only owed the Leonards about $1,228 more than what the company already has paid them for wind damage.

Senter rejected the Leonards’ allegation that a Nationwide agent’s assurances of coverage made Nationwide liable for damage from both wind and water. Paul Leonard mistakenly inferred that his policy covered water damage, the judge ruled.

The couple’s lawsuit was the first among hundreds of Katrina insurance cases to be tried since the storm slammed into the Gulf Coast, demolishing tens of thousands of homes.

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On the Net:

5th U.S. Circuit Court of Appeals, http://www.ca5.uscourts.gov



AP-CS-07-01-07 1707EDT