Madelaine Chocolate appealed this decision to the Second Circuit.

The Second Circuit found that the cases the district court relied upon to make its decision did not apply to this case because those cases “did not involve endorsements that explicitly added to the definition of a covered peril.” The policy in the Madelaine Chocolate case contained the windstorm endorsement that added an anti-concurrent causation clause to the definition of a covered peril for the entire policy, which broadened the coverage.

The circuit ruled that the district court, on remand, should assess whether the windstorm endorsement's anti-concurrent causation clause conflicted with, or otherwise created an ambiguity next to the policies flood exclusion. The court stated the district court could consider allowing discovery into interpretive materials relating to the windstorm endorsement and its relationship with the policies coverage provisions.

The circuit court concluded that the district court should “continue to be mindful of well-established precedents requiring exclusions to be set out” in “clear and unmistakable language” and to be accorded a “strict and narrow construction.”

Editors Note: Although the policy initially excluded flood damage, because Madelaine Chocolate had the windstorm endorsement on the policy, and the windstorm endorsement contained the anti-concurrent causation clause that provided coverage for wind “regardless of any other cause or event that directly or indirectly contributes concurrently or in any sequence to the loss or damage.” Flood would not normally be covered under a policy, but the decision of the second circuit seems to indicate that in this case a flood caused by a storm surge could be covered.