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New Jersey Court Rejects Theory of Spoliation By Encouragement

Three years out, Superstorm Sandy litigation continues to wend its way through New Jersey’s courts.  Last weekend, a federal judge in the state handed a victory to the insurer in Stiso v. State Farm Fire & Cas. Co., 2015 U.S. Dist. LEXIS 155762, 2015 WL 7296081 (D.N.J., Nov. 18, 2015).  In doing so, the court reaffirmed the enforceability of what it called anti-concurrent causation (ACC) “lead-in” language.  It also rejected the doctrine of “spoliation based on encouragement” – the policyholders had argued that they could not meet the burden of showing that all of their loss was caused by a covered peril because the carrier had “actively encouraged” them to begin repair early on and thereby “persuaded” them to destroy

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Posted in Anti-Concurrent Causation, Flood, Sewer Backup, Spoliation, Superstorm Sandy, Water

Florida to Decide What Test Applies When Concurrent Multiple Perils Cause a Loss

For years, Florida courts have been seesawing between two different doctrines to determine whether there is coverage under a property policy when two perils – one excluded and one included — combine to cause a loss.  Two districts of the state’s intermediate level appellate court have applied one test and a third has applied another, with the most recent decision being American Home Assur. Co. v. Sebo, 141 So.3d 195 (Fla.Ct.App., Sep. 18, 2013).  On October 7th of last year, the state’s highest court accepted review in the Sebo matter, and oral argument was conducted on September 2, 2015.  Some clarity will finally emerge in the Sunshine State with respect to this issue. When multiple perils combine to cause a

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Posted in Anti-Concurrent Causation, Efficient Proximate Cause, Faulty Workmanship or Design, Homeowners Coverage, Hurricane Wilma, Water

Ninth Circuit: Under Arizona Law Mudslide Can Be Covered as the Direct Result of Fire

Last Friday, a unanimous panel of the Ninth Circuit held that loss from the excluded peril of mudslide occurring one month after a wildfire could be covered as the “direct” result of the blaze.  In Stankova v. Metropolitan Prop. & Cas. Ins. Co., 2015 WL 3429395, 2015 U.S. App. LEXIS 8935 (9th Cir., May 29, 2015),  it reached that result even though Arizona has not adopted the efficient proximate cause rule, saying that it did not need to apply that doctrine to determine that the mudslide “could have been directly and proximately caused by the wildfire.” It also blithely ignored anti-concurrent causation (ACC) language, which is given effect in Arizona, as “inconsistent with Arizona’s standard fire insurance policy, which insures

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Posted in Anti-Concurrent Causation, Causation, Direct Physical Loss or Damage, Efficient Proximate Cause, Exclusions, Flood, Mudslide, Wildfire

Iowa Court: Anti-Concurrent Causation Language Mandates That the Jury Determine Whether an Excluded Peril Was One Cause of the Loss

Last month, we discussed a recent Texas Supreme Court decision that enforced an anti-concurrent causation (ACC) clause.  The month of April also saw a unanimous panel on Iowa’s intermediate level appellate court do the same thing.  In Salem United Methodist Church v. Church Mut. Ins. Co., 2015 WL 1546431, 2015 Iowa App. LEXIS 308 (Iowa Ct. App., Apr. 8, 2015), the judges held that ACC provisions unambiguously exclude loss caused by a concurrent combination of excluded perils and included perils and that the question of whether an excluded peril played any causative role must therefore be put to the finder of fact. The policyholder had a church in Cedar Rapids.  On June 11-12, 2008, the Cedar River overflowed its banks,

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Posted in Anti-Concurrent Causation, Flood, Water

Texas Supreme Court Enforces Anti-Concurrent Causation, Bars Coverage Where Wind and Flood Combine to Cause the Loss

Last Friday, Texas’ highest court unanimously endorsed lower court and federal court decisions giving effect to anti-concurrent causation (ACC) clauses and held that such provisions bar coverage where a combination of an excluded peril and an included peril operate together to cause the loss.  In JAW The Pointe, LLC v. Lexington Ins. Co., 2015 WL 1870054, 2015 Tex. LEXIS 343 (Tex., Apr. 24, 2015), that meant that the insured could not recover where flood and wind damage triggered the enforcement of city ordinances even though the covered wind damage component was arguably sufficient in and of itself to cause the loss. The policyholder owned The Pointe Apartments – a complex in Galveston, Texas that was heavily damaged when Hurricane Ike

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Posted in Anti-Concurrent Causation, Causation, Flood, Hurricane, Hurricane Ike, Ordinance or Law, Windstorm

Iowa’s Highest Court: Damage by Rainwater is Damage by Rain

Last July, we posted that an intermediate level appellate court in Iowa had held that a policy excluding loss “caused by rain” did not bar coverage for loss occasioned by the non-excluded peril of “rainwater.”  On Friday, the state’s highest court threw cold water on such nonsense, holding that there was no distinction between rain and rainwater for coverage purposes.  No justice disagreed, though the court split 4-3 on another issue.  The decision can be found at Amish Connection, Inc. v. State Farm Fire & Cas. Co., 2015 WL 1260085, 2015 Iowa Sup. LEXIS 32 (Iowa, Mar. 20, 2015). The insured operated the Amish Connection Store in Crossroads Shopping Mall in Waterloo, Iowa.  Rooftop drains discharged into a 4” cast-iron

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Posted in Anti-Concurrent Causation, Corrosion, Ensuing Loss, Flood, Water

Anti-Sequential Causation Clause Upheld in Hurricane Irene Case in New Jersey

In Ashrit Realty, LLC v. Tower National Ins. Co., 2015 WL 248490, 2015 N.J. Super. Unpub. LEXIS 107 (N.J.Super.Ct., App.Div., Jan. 20,  2015), New Jersey’s Appellate Division held that an anti-concurrent/anti-sequential causation clause precluded coverage for a Hurricane Irene loss.  A covered peril (hidden decay) led to an excluded peril (soil erosion), bringing down part of the insured’s structure.  As the court explained, such a provision “excludes coverage in situations where a covered event and an excluded event contribute, concurrently or sequentially, to a single loss.”  While the New Jersey Supreme Court has yet to weigh in on anti-concurrent/anti-sequential causation clauses, the case adds to growing body of lower court decisions holding or suggesting that such provisions are valid and

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Posted in Anti-Concurrent Causation, Causation, Collapse, Hurricane, Hurricane Irene, Seepage or Leakage
About The Property Insurance Law Observer
For more than four decades, Cozen O’Connor has represented all types of property insurers in jurisdictions throughout the United States, and it is dedicated to keeping its clients abreast of developments that impact the insurance industry. The Property Insurance Law Observer will survey court decisions, enacted or proposed legislation, and regulatory activities from all 50 states. We will also include commentary on current issues and developing trends of interest to first-party insurers.
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