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Fla. L. Weekly S582aTop of Form
Fla. L. Weekly S582aTop of Form
Insurance
— Homeowners — All risk policy — Coverage — Loss caused by multiple perils
— Where loss is caused by multiple perils and at least one of the perils is
excluded from coverage, the proper theory of recovery is the concurring cause
doctrine — Under the concurrent cause doctrine, coverage may exist where an
insured risk constitutes a concurrent cause of the loss even when it is not the
prime or efficient cause — Insureds were entitled to coverage for loss caused
by defective construction, which was an excluded peril, and rainwater and
hurricane winds, which were covered perils — Trial court may properly consider
settlements received from third parties as a post-judgment offset to judgment
against insurer
— Homeowners — All risk policy — Coverage — Loss caused by multiple perils
— Where loss is caused by multiple perils and at least one of the perils is
excluded from coverage, the proper theory of recovery is the concurring cause
doctrine — Under the concurrent cause doctrine, coverage may exist where an
insured risk constitutes a concurrent cause of the loss even when it is not the
prime or efficient cause — Insureds were entitled to coverage for loss caused
by defective construction, which was an excluded peril, and rainwater and
hurricane winds, which were covered perils — Trial court may properly consider
settlements received from third parties as a post-judgment offset to judgment
against insurer
JOHN
ROBERT SEBO, etc., Petitioner, vs. AMERICAN HOME ASSURANCE COMPANY, INC.,
Respondent. Supreme Court of Florida. Case No. SC14-897. December 1, 2016.
Application for Review of the Decision of the District Court of Appeal —
Direct Conflict of Decisions. Second District – Case No. 2D11-4063 (Collier
County). Counsel: Edward K. Cheffy, David Allan Zulian, and Debbie Sines
Crockett of Cheffy Passidomo, P.A., Naples; and Mark Andrew Boyle, Geoffrey
Henry Gentile, Michael Wade Leonard, Amanda Kaye Anderson, Molly Ann Chafe
Brockmeyer, Justin Michael Thomas, and Thomas Patrick Rechtin of Boyle, Gentile
& Leonard, P.A., Fort Myers, for Petitioner. Anthony J. Russo, Scott J.
Frank, Christopher M. Ramey, and Ezequiel Lugo of Butler Weihmuller Katz Craig
LLP, Tampa; Janet L. Brown and Susan B. Harwood of Boehm, Brown, Harwood, P.A.,
Maitland; and Raoul G. Cantero, III, David P. Draigh, and Ryan Andrew Ulloa of
White & Case LLP, Miami, for Respondent. Richard Hugh Lumpkin and Benjamin
C. Hassebrock of Ver Ploeg & Lumpkin, P.A., Miami; and George Alexander
Vaka and Nancy Ann Lauten of Vaka Law Group, P.L., Tampa, for Amicus Curiae
United Policyholders. Michael Jerome Higer and Colleen Alexis Maranges of Higer
Lichter & Givner, LLP, Aventura, for Amicus Curiae The Florida Association
of Public Insurance Adjusters. James Andrew McKee, Thomas Joseph Maida, and
Benjamin James Grossman of Foley & Lardner LLP, Tallahassee, for Amici
Curiae Florida Insurance Council, Property Casualty Insurance Association of
America, National Association of Mutual Insurance Companies, and American
Insurance Association.
ROBERT SEBO, etc., Petitioner, vs. AMERICAN HOME ASSURANCE COMPANY, INC.,
Respondent. Supreme Court of Florida. Case No. SC14-897. December 1, 2016.
Application for Review of the Decision of the District Court of Appeal —
Direct Conflict of Decisions. Second District – Case No. 2D11-4063 (Collier
County). Counsel: Edward K. Cheffy, David Allan Zulian, and Debbie Sines
Crockett of Cheffy Passidomo, P.A., Naples; and Mark Andrew Boyle, Geoffrey
Henry Gentile, Michael Wade Leonard, Amanda Kaye Anderson, Molly Ann Chafe
Brockmeyer, Justin Michael Thomas, and Thomas Patrick Rechtin of Boyle, Gentile
& Leonard, P.A., Fort Myers, for Petitioner. Anthony J. Russo, Scott J.
Frank, Christopher M. Ramey, and Ezequiel Lugo of Butler Weihmuller Katz Craig
LLP, Tampa; Janet L. Brown and Susan B. Harwood of Boehm, Brown, Harwood, P.A.,
Maitland; and Raoul G. Cantero, III, David P. Draigh, and Ryan Andrew Ulloa of
White & Case LLP, Miami, for Respondent. Richard Hugh Lumpkin and Benjamin
C. Hassebrock of Ver Ploeg & Lumpkin, P.A., Miami; and George Alexander
Vaka and Nancy Ann Lauten of Vaka Law Group, P.L., Tampa, for Amicus Curiae
United Policyholders. Michael Jerome Higer and Colleen Alexis Maranges of Higer
Lichter & Givner, LLP, Aventura, for Amicus Curiae The Florida Association
of Public Insurance Adjusters. James Andrew McKee, Thomas Joseph Maida, and
Benjamin James Grossman of Foley & Lardner LLP, Tallahassee, for Amici
Curiae Florida Insurance Council, Property Casualty Insurance Association of
America, National Association of Mutual Insurance Companies, and American
Insurance Association.
(PERRY,
J.) John Sebo seeks review of the decision of the Second District Court of
Appeal in American Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d
DCA 2013), on the ground that it expressly and directly conflicts with a
decision of the Third District Court of Appeal in Wallach v. Rosenberg,
527 So. 2d 1386 (Fla. 3d DCA 1988), on a question of law. We have jurisdiction.
See art. V, § 3(b)(3), Fla. Const. For the following reasons, we quash
the decision in Sebo, and approve the rationale of the Third District in
Wallach.
J.) John Sebo seeks review of the decision of the Second District Court of
Appeal in American Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d
DCA 2013), on the ground that it expressly and directly conflicts with a
decision of the Third District Court of Appeal in Wallach v. Rosenberg,
527 So. 2d 1386 (Fla. 3d DCA 1988), on a question of law. We have jurisdiction.
See art. V, § 3(b)(3), Fla. Const. For the following reasons, we quash
the decision in Sebo, and approve the rationale of the Third District in
Wallach.
FACTS
The
facts of this case are taken from the Second District Court of Appeal’s
opinion:
facts of this case are taken from the Second District Court of Appeal’s
opinion:
[John] Sebo purchased [a
Naples, Florida] home in April 2005, when it was four years old. [American Home
Assurance Company (AHAC)] provided homeowners insurance as of the date of the
purchase. The policy, which insured against “all risks,” was issued through a
private client group and was referred to as a manuscript policy. It was not a
standard form but instead was created specifically for the Sebo residence. The
house and other permanent structures were insured for over $8,000,000. The
policy also provided additional coverage for loss of use of the home.
Naples, Florida] home in April 2005, when it was four years old. [American Home
Assurance Company (AHAC)] provided homeowners insurance as of the date of the
purchase. The policy, which insured against “all risks,” was issued through a
private client group and was referred to as a manuscript policy. It was not a
standard form but instead was created specifically for the Sebo residence. The
house and other permanent structures were insured for over $8,000,000. The
policy also provided additional coverage for loss of use of the home.
Shortly after Sebo bought the
residence, water began to intrude during rainstorms. Major water leaks were
reported to Sebo’s property manager as early as May 31, 2005. She prepared a
list of problems: leaks in the main house at the foyer, the living room, dining
room, piano room, exercise room, master bathroom, and upstairs bathroom. By
June 22, 2005, the property manager advised Sebo of these leaks in writing. It
became clear that the house suffered from major design and construction
defects. After an August rain, paint along the windows just fell off the wall.
In October 2005, Hurricane Wilma struck Naples and further damaged the Sebo
residence.
residence, water began to intrude during rainstorms. Major water leaks were
reported to Sebo’s property manager as early as May 31, 2005. She prepared a
list of problems: leaks in the main house at the foyer, the living room, dining
room, piano room, exercise room, master bathroom, and upstairs bathroom. By
June 22, 2005, the property manager advised Sebo of these leaks in writing. It
became clear that the house suffered from major design and construction
defects. After an August rain, paint along the windows just fell off the wall.
In October 2005, Hurricane Wilma struck Naples and further damaged the Sebo
residence.
Sebo did not report the water
intrusion and other damages to AHAC until December 30, 2005. AHAC investigated
the claim, and in April 2006 it denied coverage for most of the claimed losses.
The policy provided $50,000 in coverage for mold, and AHAC tendered that amount
to Sebo but stated that “the balance of the damages to the house, including any
window, door, and other repairs, is not covered.” In May 2008, Sebo renewed his
claim and sent more information about the damages to AHAC, but AHAC again
denied the claim except for the $50,000 in mold damages.
intrusion and other damages to AHAC until December 30, 2005. AHAC investigated
the claim, and in April 2006 it denied coverage for most of the claimed losses.
The policy provided $50,000 in coverage for mold, and AHAC tendered that amount
to Sebo but stated that “the balance of the damages to the house, including any
window, door, and other repairs, is not covered.” In May 2008, Sebo renewed his
claim and sent more information about the damages to AHAC, but AHAC again
denied the claim except for the $50,000 in mold damages.
The residence could not be
repaired and was eventually demolished. In January 2007, Sebo filed suit
against a number of defendants, including the sellers of the property, the
architect who designed the residence, and the construction company that built
it. He alleged that the home had been negligently designed and constructed and
that the sellers had fraudulently failed to disclose the defects in the
property. Sebo eventually amended his complaint in November 2009, adding AHAC
as a defendant and seeking a declaration that the policy provided coverage for
his damages. After Sebo settled his claims against a majority of all other
defendants, the trial proceeded only on his declaratory action against AHAC.
The jurors found in favor of Sebo, and the court eventually entered judgment
against AHAC.
repaired and was eventually demolished. In January 2007, Sebo filed suit
against a number of defendants, including the sellers of the property, the
architect who designed the residence, and the construction company that built
it. He alleged that the home had been negligently designed and constructed and
that the sellers had fraudulently failed to disclose the defects in the
property. Sebo eventually amended his complaint in November 2009, adding AHAC
as a defendant and seeking a declaration that the policy provided coverage for
his damages. After Sebo settled his claims against a majority of all other
defendants, the trial proceeded only on his declaratory action against AHAC.
The jurors found in favor of Sebo, and the court eventually entered judgment
against AHAC.
Sebo,
141 So. 3d at 196-97.
141 So. 3d at 196-97.
On
appeal, the Second District found that “[t]here is no dispute in this case that
there was more than one cause of the loss, including defective construction, rain,
and wind.” Id. at 197. However, the court disagreed with the trial
court’s application of Wallach, 527 So. 2d 1386, and, in fact, disagreed
with the Third District’s “determination that the concurrent causation doctrine
should be applied in a case involving multiple perils and a first-party
insurance policy.” Sebo, 141 So. 3d at 198. The court reversed and
remanded for a new trial, “in which the causation of Sebo’s loss is examined
under the efficient proximate cause theory.” Id. at 201.
appeal, the Second District found that “[t]here is no dispute in this case that
there was more than one cause of the loss, including defective construction, rain,
and wind.” Id. at 197. However, the court disagreed with the trial
court’s application of Wallach, 527 So. 2d 1386, and, in fact, disagreed
with the Third District’s “determination that the concurrent causation doctrine
should be applied in a case involving multiple perils and a first-party
insurance policy.” Sebo, 141 So. 3d at 198. The court reversed and
remanded for a new trial, “in which the causation of Sebo’s loss is examined
under the efficient proximate cause theory.” Id. at 201.
Standard
of Review
of Review
The
issue presented is whether coverage exists under Sebo’s all-risk policy when
multiple perils combined to create a loss and at least one of the perils is
excluded by the terms of the policy. To answer this question, this Court must
determine the proper theory of recovery to apply, which is a pure question of
law. Therefore, the review is de novo. Fayad v. Clarendon Nat’l Ins. Co.,
899 So. 2d 1082, 1085 (Fla. 2005).
issue presented is whether coverage exists under Sebo’s all-risk policy when
multiple perils combined to create a loss and at least one of the perils is
excluded by the terms of the policy. To answer this question, this Court must
determine the proper theory of recovery to apply, which is a pure question of
law. Therefore, the review is de novo. Fayad v. Clarendon Nat’l Ins. Co.,
899 So. 2d 1082, 1085 (Fla. 2005).
Additionally,
the policy at issue in this case is an all-risk policy. We have stated that
“[a]lthough the term ‘all-risk’ is afforded a broad, comprehensive meaning, an
‘all-risk’ policy is not an ‘all loss’ policy, and this does not extend
coverage for every conceivable loss.” Id. at 1086 (citation omitted).
Insurance contracts are construed in accordance with the plain language of the
policy. Id. (citing Auto-Owners Ins. Co. v. Anderson, 756 So. 2d
29, 33 (Fla. 2000)). However, if the language is susceptible to more than one
reasonable interpretation and is therefore ambiguous, the policy will be
strictly construed against the insurer and in favor of the insured. Id.
“[A]mbiguous ‘exclusionary clauses are construed even more strictly against the
insurer than coverage clauses.’ ” Id. (quoting Anderson, 756 So.
2d at 34). In short, in all-risk policies such as the one held by Sebo,
construction is governed by the language of the exclusionary provisions.
the policy at issue in this case is an all-risk policy. We have stated that
“[a]lthough the term ‘all-risk’ is afforded a broad, comprehensive meaning, an
‘all-risk’ policy is not an ‘all loss’ policy, and this does not extend
coverage for every conceivable loss.” Id. at 1086 (citation omitted).
Insurance contracts are construed in accordance with the plain language of the
policy. Id. (citing Auto-Owners Ins. Co. v. Anderson, 756 So. 2d
29, 33 (Fla. 2000)). However, if the language is susceptible to more than one
reasonable interpretation and is therefore ambiguous, the policy will be
strictly construed against the insurer and in favor of the insured. Id.
“[A]mbiguous ‘exclusionary clauses are construed even more strictly against the
insurer than coverage clauses.’ ” Id. (quoting Anderson, 756 So.
2d at 34). In short, in all-risk policies such as the one held by Sebo,
construction is governed by the language of the exclusionary provisions.
DISCUSSION
We
are confronted with determining the appropriate theory of recovery to apply
when two or more perils converge to cause a loss and at least one of the perils
is excluded from an insurance policy. When addressing this question, courts
have developed competing theories on how to determine coverage: the efficient
proximate cause and concurring cause doctrines. To begin our analysis, we first
explain these doctrines. Then we discuss the Second District’s decision below.
We conclude that when independent perils converge and no single cause can be
considered the sole or proximate cause, it is appropriate to apply the
concurring cause doctrine. Accordingly, we quash the decision below.
are confronted with determining the appropriate theory of recovery to apply
when two or more perils converge to cause a loss and at least one of the perils
is excluded from an insurance policy. When addressing this question, courts
have developed competing theories on how to determine coverage: the efficient
proximate cause and concurring cause doctrines. To begin our analysis, we first
explain these doctrines. Then we discuss the Second District’s decision below.
We conclude that when independent perils converge and no single cause can be
considered the sole or proximate cause, it is appropriate to apply the
concurring cause doctrine. Accordingly, we quash the decision below.
Efficient
Proximate Cause (EPC)
Proximate Cause (EPC)
The
EPC provides that where there is a concurrence of different perils, the
efficient cause — the one that set the other in motion — is the cause to
which the loss is attributable. Sabella v. Nat’l Union Fire Ins. Co.,
377 P.2d 889, 892 (Cal. 1963); Fire Ass’n of Phila. v. Evansville Brewing
Ass’n, 75 So. 196 (Fla. 1917).
EPC provides that where there is a concurrence of different perils, the
efficient cause — the one that set the other in motion — is the cause to
which the loss is attributable. Sabella v. Nat’l Union Fire Ins. Co.,
377 P.2d 889, 892 (Cal. 1963); Fire Ass’n of Phila. v. Evansville Brewing
Ass’n, 75 So. 196 (Fla. 1917).
We
applied the EPC in Evansville Brewing, where the coverage at issue
provided under an all-loss fire policy excluded loss caused by an explosion. We
explained, “[w]hile the insurer is not liable for a loss caused by an explosion
which was not produced by a preceding fire, yet if the explosion is caused by
fire during its progress in the building, the fire is the proximate cause of
the loss, the explosion being a mere incident of the fire, and the insurer is
liable.” Evansville Brewing, 75 So. at 198. In Evansville Brewing,
we contemplated a chain of events where one peril directly led to a subsequent
peril. In finding that coverage existed under the policy, we drew the
distinction between a covered peril setting into motion an uncovered peril and
an uncovered peril setting into motion a covered peril. Coverage exists for the
former but not the latter.
applied the EPC in Evansville Brewing, where the coverage at issue
provided under an all-loss fire policy excluded loss caused by an explosion. We
explained, “[w]hile the insurer is not liable for a loss caused by an explosion
which was not produced by a preceding fire, yet if the explosion is caused by
fire during its progress in the building, the fire is the proximate cause of
the loss, the explosion being a mere incident of the fire, and the insurer is
liable.” Evansville Brewing, 75 So. at 198. In Evansville Brewing,
we contemplated a chain of events where one peril directly led to a subsequent
peril. In finding that coverage existed under the policy, we drew the
distinction between a covered peril setting into motion an uncovered peril and
an uncovered peril setting into motion a covered peril. Coverage exists for the
former but not the latter.
The
EPC was explained by the California Supreme Court1 in Sabella, where it reasoned,
“ ‘in determining whether a loss is within an exception in a policy, where
there is a concurrence of different causes, the efficient cause — the one that
sets others in motion — is the cause to which the loss is to be attributed,
though the other causes may follow it, and operate more immediately in
producing the disaster.’ ” Sabella, 377 P.2d at 895 (quoting 6 George J.
Couch, Cyclopedia of Insurance Law § 1466, at 5303-04 (1930)). The
California Supreme Court thus reasoned that a covered peril that convenes with
an uncovered peril may still provide for coverage under a policy when the
covered peril triggered the events that eventually led to the loss.
EPC was explained by the California Supreme Court1 in Sabella, where it reasoned,
“ ‘in determining whether a loss is within an exception in a policy, where
there is a concurrence of different causes, the efficient cause — the one that
sets others in motion — is the cause to which the loss is to be attributed,
though the other causes may follow it, and operate more immediately in
producing the disaster.’ ” Sabella, 377 P.2d at 895 (quoting 6 George J.
Couch, Cyclopedia of Insurance Law § 1466, at 5303-04 (1930)). The
California Supreme Court thus reasoned that a covered peril that convenes with
an uncovered peril may still provide for coverage under a policy when the
covered peril triggered the events that eventually led to the loss.
Concurrent
Cause Doctrine (CCD)
Cause Doctrine (CCD)
The
CCD provides that coverage may exist where an insured risk constitutes a
concurrent cause of the loss even when it is not the prime or efficient cause. See
Wallach, 527 So. 2d 1386; State Farm Mut. Auto. Ins. Co. v. Partridge,
514 P.2d 123, 133 (Cal. 1973).
CCD provides that coverage may exist where an insured risk constitutes a
concurrent cause of the loss even when it is not the prime or efficient cause. See
Wallach, 527 So. 2d 1386; State Farm Mut. Auto. Ins. Co. v. Partridge,
514 P.2d 123, 133 (Cal. 1973).
The
CCD originated with the California Supreme Court’s decision in Partridge,
where the court was presented with “a somewhat novel question of insurance
coverage: when two negligent acts of an insured — one auto-related and the
other non-auto-related — constitute concurrent causes of an accident, is the
insured covered under both his homeowner’s policy and his automobile liability
policy, or is coverage limited to the automobile policy?” Id. at 124-25.
The insured, Wayne Partridge, owned a .357 Magnum pistol and had filed the
trigger mechanism to create “hair trigger action.” Id. at 125. Partridge
was driving two friends, Vanida Neilson and Ray Albertson, in his insured Ford
Bronco when he spotted a jack rabbit. In pursuit of the rabbit, he drove the
Bronco off the road and hit a bump, causing the pistol to discharge. A bullet
entered Neilson’s arm, penetrated her spinal cord, and left her paralyzed. Id.
Neilson filed an action against Partridge and entered into settlement
discussions with State Farm. This dispute arose because the parties did not
agree whether recovery was available from both the homeowner’s and automobile
policies. The homeowner’s policy contained an exclusion for bodily injury
arising out of the use of any motor vehicle. Id. at 126. State Farm
relied on this exclusionary language to argue that only the automobile policy
provided coverage for the injuries. Specifically, State Farm argued that the
language of the policies was intended to be mutually exclusive and not provide
for overlapping coverage. Id. at 128.
CCD originated with the California Supreme Court’s decision in Partridge,
where the court was presented with “a somewhat novel question of insurance
coverage: when two negligent acts of an insured — one auto-related and the
other non-auto-related — constitute concurrent causes of an accident, is the
insured covered under both his homeowner’s policy and his automobile liability
policy, or is coverage limited to the automobile policy?” Id. at 124-25.
The insured, Wayne Partridge, owned a .357 Magnum pistol and had filed the
trigger mechanism to create “hair trigger action.” Id. at 125. Partridge
was driving two friends, Vanida Neilson and Ray Albertson, in his insured Ford
Bronco when he spotted a jack rabbit. In pursuit of the rabbit, he drove the
Bronco off the road and hit a bump, causing the pistol to discharge. A bullet
entered Neilson’s arm, penetrated her spinal cord, and left her paralyzed. Id.
Neilson filed an action against Partridge and entered into settlement
discussions with State Farm. This dispute arose because the parties did not
agree whether recovery was available from both the homeowner’s and automobile
policies. The homeowner’s policy contained an exclusion for bodily injury
arising out of the use of any motor vehicle. Id. at 126. State Farm
relied on this exclusionary language to argue that only the automobile policy
provided coverage for the injuries. Specifically, State Farm argued that the
language of the policies was intended to be mutually exclusive and not provide
for overlapping coverage. Id. at 128.
The
California Supreme Court disagreed. First, the court noted that exclusionary
clauses are more strictly construed than coverage clauses. Next, the court
reasoned that an insured risk combined with an excluded risk to produce the
ultimate injury and determined “that coverage under a liability insurance
policy is equally available to an insured whenever an insured risk constitutes
simply a concurrent proximate cause of the injuries.” Id. at 130
(applying the rationale of Brooks v. Metro. Life Ins. Co., 163 P.2d 689
(Cal. 1945)). Thus, because neither peril could have created the loss alone but
instead combined to create the loss, the California Supreme Court could not
identify the prime, moving, or efficient cause in order to determine coverage,
and pronounced a new doctrine.
California Supreme Court disagreed. First, the court noted that exclusionary
clauses are more strictly construed than coverage clauses. Next, the court
reasoned that an insured risk combined with an excluded risk to produce the
ultimate injury and determined “that coverage under a liability insurance
policy is equally available to an insured whenever an insured risk constitutes
simply a concurrent proximate cause of the injuries.” Id. at 130
(applying the rationale of Brooks v. Metro. Life Ins. Co., 163 P.2d 689
(Cal. 1945)). Thus, because neither peril could have created the loss alone but
instead combined to create the loss, the California Supreme Court could not
identify the prime, moving, or efficient cause in order to determine coverage,
and pronounced a new doctrine.
The
CCD was first applied in Florida in Wallach, where the Third District
considered the coverage available to the Rosenbergs after Wallach’s sea wall
collapsed and led to a portion of the Rosenbergs’ sea wall crumbling. 527 So.
2d 1386. The Rosenbergs filed suit against Wallach, claiming that he had
breached his duty to maintain his premises. They also filed a claim under their
all-risk homeowner’s policy, which was denied because the policy contained an
exclusion for loss resulting from earth movement or water damage. Id. at
1387. On appeal, the insurance company argued “that where concurrent causes
join to produce a loss and one of the causes is a risk excluded under the
policy, then no coverage is available to the insured.” Id. The Third
District rejected that theory and adopted “what we think is a better view —
that the jury may find coverage where an insured risk constitutes a concurrent
cause of the loss even where ‘the insured risk [is] not . . . the prime or
efficient cause of the accident.’ ” Id. at 1387 (quoting 11 Ronald A.
Anderson, Couch on Insurance 2d § 44:268, at 417 (rev. ed. 1982)).
Further, the Third District noted that the California Supreme Court found the
efficient cause language of Sabella “to be of little assistance in cases
where both causes of the harm are independent of each other.” Id. at
1388 (“We agree with the California court that the efficient cause language set
forth in Sabella and cited by [Phelps] offers little analytical
support where it can be said that but for the joinder of two independent causes
the loss would not have occurred.” (citing Partridge, 514 P.2d at 130
n.10)). Accordingly, the Third District held that “[w]here weather perils
combine with human negligence to cause a loss, it seems logical and reasonable
to find the loss covered by an all-risk policy even if one of the causes is
excluded from coverage.” Id. (citing Safeco Ins. Co. v. Guyton,
692 F.2d 551 (9th Cir. 1982)). Wallach has continued to be applied in
Florida courts until the Second District’s decision in Sebo. We accepted
jurisdiction based on the conflict between Wallach and Sebo.
CCD was first applied in Florida in Wallach, where the Third District
considered the coverage available to the Rosenbergs after Wallach’s sea wall
collapsed and led to a portion of the Rosenbergs’ sea wall crumbling. 527 So.
2d 1386. The Rosenbergs filed suit against Wallach, claiming that he had
breached his duty to maintain his premises. They also filed a claim under their
all-risk homeowner’s policy, which was denied because the policy contained an
exclusion for loss resulting from earth movement or water damage. Id. at
1387. On appeal, the insurance company argued “that where concurrent causes
join to produce a loss and one of the causes is a risk excluded under the
policy, then no coverage is available to the insured.” Id. The Third
District rejected that theory and adopted “what we think is a better view —
that the jury may find coverage where an insured risk constitutes a concurrent
cause of the loss even where ‘the insured risk [is] not . . . the prime or
efficient cause of the accident.’ ” Id. at 1387 (quoting 11 Ronald A.
Anderson, Couch on Insurance 2d § 44:268, at 417 (rev. ed. 1982)).
Further, the Third District noted that the California Supreme Court found the
efficient cause language of Sabella “to be of little assistance in cases
where both causes of the harm are independent of each other.” Id. at
1388 (“We agree with the California court that the efficient cause language set
forth in Sabella and cited by [Phelps] offers little analytical
support where it can be said that but for the joinder of two independent causes
the loss would not have occurred.” (citing Partridge, 514 P.2d at 130
n.10)). Accordingly, the Third District held that “[w]here weather perils
combine with human negligence to cause a loss, it seems logical and reasonable
to find the loss covered by an all-risk policy even if one of the causes is
excluded from coverage.” Id. (citing Safeco Ins. Co. v. Guyton,
692 F.2d 551 (9th Cir. 1982)). Wallach has continued to be applied in
Florida courts until the Second District’s decision in Sebo. We accepted
jurisdiction based on the conflict between Wallach and Sebo.
This
Case
Case
After
determining that there was “no dispute in this case that there was more than
one cause of the loss, including defective construction, rain, and wind,” the
Second District noted below that the parties had filed cross-motions for
summary judgment, in which Sebo had asserted that AHAC was required to cover
all losses under the concurrent cause doctrine. Sebo, 141 So. 3d at 197.
Then, the court expressed its disagreement with Wallach’s application to
cases involving multiple perils and a first-party insurance policy.2 Id. at 198. Relying on the
California Supreme Court’s clarification in Garvey v. State Farm Fire &
Cas. Co., 770 P.2d 704 (Cal. 1989), the Second District reasoned that “a
covered peril can usually be found somewhere in the chain of causation, and to
apply the concurrent causation analysis would effectively nullify all
exclusions in an all-risk policy.” Sebo, 141 So. 3d at 201 (citing Garvey,
770 P. 2d at 705). Accordingly, the Second District reversed and remanded the
case for a new trial. Id.
determining that there was “no dispute in this case that there was more than
one cause of the loss, including defective construction, rain, and wind,” the
Second District noted below that the parties had filed cross-motions for
summary judgment, in which Sebo had asserted that AHAC was required to cover
all losses under the concurrent cause doctrine. Sebo, 141 So. 3d at 197.
Then, the court expressed its disagreement with Wallach’s application to
cases involving multiple perils and a first-party insurance policy.2 Id. at 198. Relying on the
California Supreme Court’s clarification in Garvey v. State Farm Fire &
Cas. Co., 770 P.2d 704 (Cal. 1989), the Second District reasoned that “a
covered peril can usually be found somewhere in the chain of causation, and to
apply the concurrent causation analysis would effectively nullify all
exclusions in an all-risk policy.” Sebo, 141 So. 3d at 201 (citing Garvey,
770 P. 2d at 705). Accordingly, the Second District reversed and remanded the
case for a new trial. Id.
To
determine whether coverage exists under Sebo’s policy, we begin with the
language of the policy. It is undisputed that Sebo’s all-risk policy included
the following exclusion:
determine whether coverage exists under Sebo’s policy, we begin with the
language of the policy. It is undisputed that Sebo’s all-risk policy included
the following exclusion:
The following exclusions apply to the Part II-PROPERTY
section of your policy
section of your policy
. . . .
8. Faulty, Inadequate or Defective Planning
We do not cover any loss caused by faulty, inadequate or
defective:
defective:
a. Planning, zoning, development, surveying, siting;
b. Design, specifications, workmanship, repair,
construction, renovation, remodeling, grading, compaction;
construction, renovation, remodeling, grading, compaction;
c. Materials used in repair, construction, renovation or
remodeling; or
remodeling; or
d. Maintenance;
of part or all of any property whether on or off the
residence.
residence.
Policy,
Part II — Property, D. Exclusions, 8., Page 8.
Part II — Property, D. Exclusions, 8., Page 8.
Also
not in dispute is that the rainwater and hurricane winds combined with the
defective construction to cause the damage to Sebo’s property. As in Partridge,
there is no reasonable way to distinguish the proximate cause of Sebo’s
property loss — the rain and construction defects acted in concert to create
the destruction of Sebo’s home. As such, it would not be feasible to apply the
EPC doctrine because no efficient cause can be determined. As stated in Wallach,
“[w]here weather perils combine with human negligence to cause a loss, it seems
logical and reasonable to find the loss covered by an all-risk policy even if
one of the causes is excluded from coverage.” Wallach, 527 So. 2d at
1388. Furthermore, we disagree with the Second District’s statement that the
CCD nullifies all exclusionary language and note that AHAC explicitly wrote
other sections of Sebo’s policy to avoid applying the CCD. Because AHAC did not
explicitly avoid applying the CCD, we find that the plain language of the
policy does not preclude recovery in this case.
not in dispute is that the rainwater and hurricane winds combined with the
defective construction to cause the damage to Sebo’s property. As in Partridge,
there is no reasonable way to distinguish the proximate cause of Sebo’s
property loss — the rain and construction defects acted in concert to create
the destruction of Sebo’s home. As such, it would not be feasible to apply the
EPC doctrine because no efficient cause can be determined. As stated in Wallach,
“[w]here weather perils combine with human negligence to cause a loss, it seems
logical and reasonable to find the loss covered by an all-risk policy even if
one of the causes is excluded from coverage.” Wallach, 527 So. 2d at
1388. Furthermore, we disagree with the Second District’s statement that the
CCD nullifies all exclusionary language and note that AHAC explicitly wrote
other sections of Sebo’s policy to avoid applying the CCD. Because AHAC did not
explicitly avoid applying the CCD, we find that the plain language of the
policy does not preclude recovery in this case.
Last,
AHAC argues that the trial court erred by prohibiting the introduction of the
amount of the settlements Sebo received in connection with this case. The trial
court excluded evidence of the settlements based on this Court’s decision in Saleeby
v. Rocky Elson Construction, Inc., 3 So. 3d 1078 (Fla. 2009). The Second
District did not rule on this issue because “it is not completely clear whether
this is a valued policy law case.” Sebo, 141 So. 3d at 203. The court
therefore left this question to be resolved at retrial, noting that the 2005
version of the statute applied. Id. We disagree with the trial court’s
determination that Saleeby precluded AHAC from presenting the settlement
amounts to offset the judgment.
AHAC argues that the trial court erred by prohibiting the introduction of the
amount of the settlements Sebo received in connection with this case. The trial
court excluded evidence of the settlements based on this Court’s decision in Saleeby
v. Rocky Elson Construction, Inc., 3 So. 3d 1078 (Fla. 2009). The Second
District did not rule on this issue because “it is not completely clear whether
this is a valued policy law case.” Sebo, 141 So. 3d at 203. The court
therefore left this question to be resolved at retrial, noting that the 2005
version of the statute applied. Id. We disagree with the trial court’s
determination that Saleeby precluded AHAC from presenting the settlement
amounts to offset the judgment.
Saleeby
held that section 768.041, Florida Statutes, which bars disclosure to the jury
of settlement or dismissal of a joint tortfeasor, and section 90.408, which
bars the disclosure of evidence of an offer to compromise to prove liability,
are clear and unambiguous. We held that “[n]o evidence of settlement is
admissible at trial on the issue of liability.” Saleeby, 3 So. 3d at
1083. Nothing in our decision affects the ability of a trial court to consider
the amount of settlements as a post-judgment offset. We remand for
reconsideration of this issue.
held that section 768.041, Florida Statutes, which bars disclosure to the jury
of settlement or dismissal of a joint tortfeasor, and section 90.408, which
bars the disclosure of evidence of an offer to compromise to prove liability,
are clear and unambiguous. We held that “[n]o evidence of settlement is
admissible at trial on the issue of liability.” Saleeby, 3 So. 3d at
1083. Nothing in our decision affects the ability of a trial court to consider
the amount of settlements as a post-judgment offset. We remand for
reconsideration of this issue.
For
the foregoing reasons, we quash the Second District’s opinion below and remand
for further proceedings consistent with this opinion.
the foregoing reasons, we quash the Second District’s opinion below and remand
for further proceedings consistent with this opinion.
It
is so ordered. (LABARGA, C.J., and PARIENTE, LEWIS, and QUINCE, JJ., concur.
CANADY, J., concurs in result. POLSTON, J., dissents with an opinion.)
is so ordered. (LABARGA, C.J., and PARIENTE, LEWIS, and QUINCE, JJ., concur.
CANADY, J., concurs in result. POLSTON, J., dissents with an opinion.)
__________________
1We
mention California caselaw because Florida courts have looked to California
decisions on insurance matters involving the EPC.
mention California caselaw because Florida courts have looked to California
decisions on insurance matters involving the EPC.
2We
note that the abrogation of the CCD was not properly before the Second District
to consider. AHAC never specifically argued that the CCD should be abrogated and
replaced with the EPC in Florida trial or in its brief on appeal to the Second
District. In its order granting partial summary judgment for Sebo, the trial
court found that “Florida recognizes the Doctrine of Concurrent Causation” and
that the doctrine “applies to all-risk policies.” The trial court further found
that the causes of loss “are not ‘dependent’ as that term is understood under”
the doctrine. After this adverse ruling, it does not appear that AHAC raised
the issue again. Likewise, the focus of AHAC’s argument on appeal to the Second
District was the improper application of the CCD based on the dependent nature
of the perils. Accordingly, the argument was not preserved, and the Second
District improperly decided an issue that was not raised.
note that the abrogation of the CCD was not properly before the Second District
to consider. AHAC never specifically argued that the CCD should be abrogated and
replaced with the EPC in Florida trial or in its brief on appeal to the Second
District. In its order granting partial summary judgment for Sebo, the trial
court found that “Florida recognizes the Doctrine of Concurrent Causation” and
that the doctrine “applies to all-risk policies.” The trial court further found
that the causes of loss “are not ‘dependent’ as that term is understood under”
the doctrine. After this adverse ruling, it does not appear that AHAC raised
the issue again. Likewise, the focus of AHAC’s argument on appeal to the Second
District was the improper application of the CCD based on the dependent nature
of the perils. Accordingly, the argument was not preserved, and the Second
District improperly decided an issue that was not raised.
__________________
(POLSTON,
J., dissenting.) As the majority explains in footnote 2, the issue decided by
the Second District and then by this Court, whether to apply the efficient
proximate cause doctrine instead of the concurring cause doctrine, was not raised
by the parties before the trial court or the Second District. Accordingly, the
Second District should not have decided this issue. See Pagan v. State,
29 So. 3d 938, 957 (Fla. 2009) (stating that the “purpose of an appellate brief
is to present arguments in support of the points on appeal” and failing to do
so will mean that such claims are “deemed to have been waived” (quoting Duest
v. Dugger, 555 So. 2d 849, 852 (Fla.1990))); City of Miami v. Steckloff,
111 So. 2d 446, 447 (Fla. 1959) (“An assigned error will be deemed to have been
abandoned when it is completely omitted from the [appellate] briefs.”); see
also Robertson v. State, 829 So. 2d 901, 906 (Fla. 2002) (“[G]enerally, if
a claim is not raised in the trial court, it will not be considered on appeal.”
(quoting Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644
(Fla. 1999))). Therefore, I would quash and remand for the Second District to
consider the issue raised by the parties, and I would not reach the merits of
the issue decided by this Court.
J., dissenting.) As the majority explains in footnote 2, the issue decided by
the Second District and then by this Court, whether to apply the efficient
proximate cause doctrine instead of the concurring cause doctrine, was not raised
by the parties before the trial court or the Second District. Accordingly, the
Second District should not have decided this issue. See Pagan v. State,
29 So. 3d 938, 957 (Fla. 2009) (stating that the “purpose of an appellate brief
is to present arguments in support of the points on appeal” and failing to do
so will mean that such claims are “deemed to have been waived” (quoting Duest
v. Dugger, 555 So. 2d 849, 852 (Fla.1990))); City of Miami v. Steckloff,
111 So. 2d 446, 447 (Fla. 1959) (“An assigned error will be deemed to have been
abandoned when it is completely omitted from the [appellate] briefs.”); see
also Robertson v. State, 829 So. 2d 901, 906 (Fla. 2002) (“[G]enerally, if
a claim is not raised in the trial court, it will not be considered on appeal.”
(quoting Dade Cty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644
(Fla. 1999))). Therefore, I would quash and remand for the Second District to
consider the issue raised by the parties, and I would not reach the merits of
the issue decided by this Court.
I
respectfully dissent.
respectfully dissent.
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