(CN) – An insurance company must pay for a vacation home destroyed by Hurricane Katrina, despite its assertion that the nine-bedroom house was not destroyed entirely by wind, the 5th Circuit ruled.
Xavier Grilleta and Randy Lauman co-owned a 6,000 square-foot, nine-bedroom, 7.5-bath vacation home on the shore of Lake Pontchartrain in Louisiana.
Their policy with Lexington Insurance Co. covered wind damage but not water damage. After Katrina leveled the house, the company’s insurance adjuster found that wind damage had been the culprit. He recommended that his company pay the plaintiffs $532,448.
Instead, Lexington hired an engineering firm, whose meteorologist said wind only damaged the roof, doors and windows, not the entire property. He concluded that flood waters destroyed the home.
Based on his advice, Lexington paid the homeowners $311,055, and the plaintiffs took them to court.
The district court ruled that Lexington did not meet its burden of proof that the water-damage exclusion applied to this case. Lexington was found liable for the $400,000 limit of its policy and $40,000 for the boathouse, which was destroyed. Lexington appealed the decision.
In a per-curiam ruling, the federal appeals court in New Orleans ruled that the district court had the discretion to choose which side’s experts were more credible.
“Much of this case involves a review of the district court’s factual findings,” the judges wrote, “and there is no indication that the district court committed clear error.”