Insurance Coverage Blog

Anti-concurrent cause language in first-party property insurance is, believe it or not, something I enjoy writing about even more than I do about Katrina litigation in general, Dickie Scruggs, Jim Hood or even the Trailer Lawyers.  So I have been trying to squeeze in some time, not always successfully, to follow the Corban v. USAA case in Mississippi state court.  Time is finite, at least as we humans experience it, and let us never forget the wisdom of the great Vin Scully: on the line-up card of life, we are all listed as day-to-day.  If you never had the pleasure of hearing Scully call a game, or if you did and wish to remind yourself of how much he is missed, follow this link and read the transcript of his call of the last out of Sandy Koufax's perfect game of September 9, 1965. Even if you are not a baseball fan, there is joy in seeing one master artist explain the work of another.  Gather ye rosebuds while ye may, Old Time is still a-flying.

Corban is an important case because the Mississippi Supreme Court is being asked to interpret anti-concurrent language as it relates to hurricane damage for the first time.  The plaintiffs, Margaret and Dr. Magruder Corban, are petitioning the court to accept an interlocutory appeal of the Harrison County trial court's interpretation of anti-concurrent cause language.

So that you can follow along, here is the trial court's partial summary judgment order in this case. As the court said, it appears from the record that the second floor of the Corbans' home was damaged by wind and perhaps rain. The first floor may have sustained damage from both wind and Katrina storm surge, although the Corbans' experts said the home and other structures were destroyed by wind before the water arrived.  I did not quite follow this explanation by the court of the plaintiffs' characterization of the flood exclusion: "The Corbans maintain that storm surge is not included in the policy exclusion and that the policy exclusion applies only to water damage and not to any wind damage." That statement appears self-contradictory, if storm surge has the usual connotations of consisting of water damage. 

Be that as it may, the trial court characterized USAA's position as that "storm surge is included in the policy exclusion and that the policy exclusion operates to exclude coverage for all damage caused either by water alone or damage from any combination of water and any other peril." 

The court analyzed how the policy's anti-concurrent cause language, the standard Insurance Services Office version, fit in with wind and water damage.  This version of the anti-concurrent cause clause reads as follows:

We do not insure for loss caused directly or indirectly by any of the following. Such loss is excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.

The court seemed to be heading in the right direction with this statement:

[T]he exclusion provides that is does not cover a loss caused by water damage. The second sentence refers to "[s]uch loss" being excluded even if in combination with or in any sequence to other causes.  The term "[s]uch loss" can only refer to the loss caused by water damage mentioned in the first sentence of the exclusion.  It is that loss and that loss only that is excluded by the plain language of the provision.  The remainder of the second sentence goes on to elaborate on the exclusion by providing that the water damage is excluded no matter what other causes exist and whether the water damage occurs first, last, or simultaneously with some other causes.  This simple, basic interpretation of the language used and sentence structure bars coverage for water damage and only the water damage, whether occurring alone or in any order with another cause.

That is right. The anti-concurrent lead-in clause to the flood exclusion contractually overturns the common law efficient proximate cause doctrine and makes it so water damage cannot be covered, even if some other covered peril were judged to be the more important or moving cause of the damage. 

However, I would like to point out one step in the analysis the court did not take that it should have.  At that point, the court should have said in what circumstances either anti-concurrent cause language or efficient proximate cause are relevant -- when multiple forces combine to cause the same damage.  The word "loss" as used in the anti-concurrent cause provision must be understood in the context of the rest of the policy. The basic coverage grant of homeowners policies is for "accidental direct physical loss to the property."  The key is to understand that property is made up of many elements, and any given element can experience more than one direct physical loss before its value has been totally consumed.  I use the example of an $800 couch -- covered wind-driven rain could cause loss to the couch of $700, and then uncovered storm surge could cause further loss of $100. Two losses, two different forces that caused loss. Merely because they acted upon the same item of property does not mean the loss is the same -- they did not act in combination to cause $800 of damage, they acted separately to cause $700 and then $100 in damage.

Missing this step is what causes most anti-concurrent cause analyses to go off the rails at some point. I'm not sure why courts keep overlooking this -- it possibly is because they fail to fully appreciate that both anti-concurrent cause and efficient proximate cause deal with multiple causes of the very same loss. If this scenario is not present, neither mode of analysis has any use or relevance, so one would think courts would take the preliminary step of determining what the loss is before wasting time with a causal analysis that may not apply to the facts.  Some courts are getting it right, however, as Judge Senter did in Dickinson v. Nationwide and Judge Ortrie Smith did in Maxus Realty, two recent cases.

We can see how leaving out this "loss" step left the Corban trial court unprepared to figure out what the Fifth Circuit's 2007 Leonard v. Nationwide and Tuepker v. State Farm decisions stand for. The trial court, citing these cases, said the Corbans cannot recover "for any damaged caused by water as defined in the policy or a combination of that wind and water."   The quote the trial court used to come up with this conclusion is from Tuepker, which itself cited to the earlier Leonard case:

any damage caused exclusively by a nonexcluded peril or event such as wind, not concurrently or sequentially with water damage, is covered by the policy, while all damage caused by water or by wind acting concurrently or sequentially with water is excluded.  

When I see something like this, I call it a "yeah but" moment.  Yeah, but where's the analysis showing exactly how you think wind and water acted either concurrently or sequentially to cause the same damage? Those words, concurrently or sequentially, can have meaning only within the context of the clause's overarching purpose -- to address multiple causes of the same loss. And if there ain't no same loss, they ain't no good. 

So "concurrent" and "in sequence" have to have some specialized meaning within this context, or they make no sense -- they can't be used in a colloquial sense.  Merely because one thing follows another does not give it the meaning of sequentially within this context, nor are two things concurrent in this context merely because the forces act at roughly the same time or act on the same physical element of property.  You have to understand the purpose of those words, and once you do, it is relatively easy to see that Katrina wind and water were neither concurrent nor sequential.  They can't be, because they didn't cause the same loss at the same time, they caused different losses to property at different times. It is not important that the same element of property was damaged by different forces twice -- they are still distinct and so any form of causation analysis used to sort out what is responsible for the same loss is irrelevant.  I am still waiting for anyone to show me even one instance of Katrina wind and water acting concurrently or sequentially as I explain those terms. No one has yet, and I doubt anyone ever will. 

That gets us to the Corbans' briefing for the petition for interlocutory appeal.  Here it is.  I agree with this brief to the extent it cites Dickinson, Maxus Realty and my October 2007 New Appleman: Critical Issues anti-concurrent analysis, which is basically what I explain above, and which I go into further detail about in another Critical Issues article to be published this month. Obviously, I agree with myself.  As you might expect, I'm not on board with the alternative grounds for reversing the trial court, such as that the anti-concurrent cause language is against public policy or is ambiguous because different courts interpret it different ways.  Still, these alternative arguments are presented in a pretty sophisticated way, which is not always the norm, and I don't discount them out of hand. The arguments are too good for me to pick at with the little energy I have left as I write this in the wee hours, so I will just say they strike me as generally contrary to the way I see anti-concurrent cause clauses, but seeing the thought that went into them, I will give them some more thought myself. 

Lastly, one thing: you might notice I never use the acronym ACC for anti-concurrent cause, as most people do.  I have a bias against acronyms when they become a further form of jargon that makes legal analysis even more unapproachable than it already is.  I can't say I can express with any great clarity why I dislike using "ACC" -- something about how it gives aid and comfort to those who might be inclined to follow shortcuts in analysis and fall prey to false doctrine. I like to use the word "concurrent" wherever I can, not the least because it reminds me that the word has a specialized meaning in a specialized context. I don't want to forget that, nor do I want to forget that there's more to speaking the language with precision than just tossing around a few insider phrases.  Just one of those personal eccentricities, I guess.       

Oh, I almost forgot.  Here's a story on the petition for interlocutory appeal by Anita Lee of the Sun Herald.   You have to admire her for recognizing the importance of this case and taking on a tough issue like anti-concurrent cause for a publication with a mass general audience. 

David: In an effort to be sure I understand your position, let's look at a hypothetical. Assume a hurricane hits a house on the coast. Wind hits first, and tears off the roof, causing $100,000 in damage. Then a storm surge hits and destroys what is left of the house, which was valued at $500,000.

Further assume the ISO language you describe in the USAA case, and forget about such messy details as deductables, personal property and the like. Likewise, forget about the messy proof issues that surround such cases. In our hypothetical, the NSA saw the whole thing via satellite.

What does the homeowner's carrier pay?

$100,000.

I noticed you stated you do not like using acronym-here's one for you. UNA-use no acronyms

David, you answer is spot on. Now then, since the ins. company cites an exclusion (water), who has the BOP? I'd like to see a simple answer again, please.

You know the answer. Insurance company. What that means in a given case will vary with the facts, the state and the judge.

Sounds like some are still in denial on the BOP issue....sorry for the terrible pun.

Yes, but David's equation is so easy on its face, yet many make it so difficult. In many cases you are dealing with the million dollar homes on the Mississippi coast, or Dr. Weiss in Slidell.

I never heard any squawk on the autos on the coast.

CLAIMSGUY, the NSA does not "see" anything. NSA=SIGINT & IA not IMINT.

MORE COWBELL - Flood is a covered event in the Auto policy.

I think people make more out of burden of proof than they should.

When the storm surge destroys a house, the carrier will be able to make their burden. If the homeowner has evidence of wind they will present it. Then a jury will weigh the evidence like it always does.

If the homeowner's expert is one who has found tornados every single place he has ever looked, then his credibility will suffer, and the homeowner's result will follow. But he is credible, the homeowner will do OK. But proving that the storm surge went over the house, destroying all that was there, isn't a very tough evidentiary task.

I think there are cases where water and wind work concurrently or in sequence to produce the loss. Suppose the storm surge forces open a door or creates an opening in the building. Further suppose the experts agree that the wind would not and could not have created the opening. The wind then blows through the opening and knocks a painting off the wall. The storm surge was not high enough to get to the painting had it stayed put. The wind blows the painting off the wall into the storm surge water. Wind was "a cause" of the loss, but the loss would not have occurred in the absence of the storm surge. And, the loss(to the painting) would not have without the wind. I believe that loss is excluded because of the anti-concurrent cause language.

Clarke, under the State Farm anti-concurrent language, I can see your point, and this is an example that had not occurred to me and one I have not encountered anywhere before, so I will give it some more thought.

We can test the hypothesis by first looking at an inital step: was the loss to the item of property a result of multiple forces working to cause the exact same damage? Possibly. The forces were independent and all the damage that occurred would not have occurred save for the combination of the forces on the object. I think the key to your example is the door being first opened by the storm surge, without that being present, it may weaken the argument somewhat, or at least muddy the waters.

The fact that the wind didn't tear the painting to pieces or do anything but unhook it from the wall doesn't trouble me -- if the wind knocked a weather vane off the roof and it would have been undamaged except for falling to earth and smashing into pieces, that would be covered, even though the collision with the ground was the physical event that truly resulted in destruction. Although when one things about it, there is an argument that this is not so -- if the weather vane were knocked off and fell but did not hit the ground because there were some bottomless pit present, the weather vane still would be lost because of the wind even though it was in one piece. So wind can obviously act to destroy without being the end agent of demolition.

There is, however, something that bears more thought here -- what if the wind not the storm surge opened the door? We can say the storm surge would have opened the door anyway, but let's assume we know it didn't. Perhaps the homeowner forgot to latch it correctly and it blew open. Then let's assume that wind knocked the painting from the wall and it was OK except for some repairable wind-driven rain damage, then storm surge came along and wrecked it utterly. Some smaller percentage of damage would be covered but probably most would not. That situation is one were separate forces were at work. What about then if the wind knocked it off the wall while storm surge was in the house? Is that just another example of separate damage from separate forces, or is all the damage excluded because of the anti-concurrent cause? Really, the philosophical dilemma that needs to be solved here is whether the wind carrying the painting off the wall produced the damage or whether its collision with an object that resulted in destruction is the reason for the damage.

I don't have an easy answer for that, I could come up with an answer after I think about it for a while, but that is where I see the crux of the debate about your hypothetical.