A federal judge sided with the insurance industry yesterday and against water-battered victims of Hurricane Katrina by ruling that storm-induced surges are floods and therefore not covered by standard homeowner policies. Paul and Julie Leonard of Pascagoula, Miss., in a case watched closely by Gulf Coast residents battered by Katrina a year ago, sued Nationwide Mutual Insurance Co. for more than $47,000 of the $130,253 in damage to their home they say was caused by the storm. .