May 1 potpourri
Again, time is very limited today, so this will have to suffice.
-- I saw this story in the Insurance Journal that, following the Fifth Circuit's opinion in Broussard v. State Farm, the case has settled, so there won't be any new trial.
-- This item from the Las Vegas Sun on a sudden increase in interest following an earthquake in Utah is interesting:
Fuller said most people usually don't buy earthquake insurance because of its cost, the belief that an earthquake won't happen in Utah or that the federal government would help in an emergency.
But since Hurricane Katrina hit New Orleans in 2005, fewer people have been willing to rely on the belief in government help, Fuller said.
"I think before Katrina, people saw FEMA as the answer to getting a house rebuilt," he said. Fuller said the largest factor that keeps people from buying earthquake insurance, though, is its cost, which can double the price of homeowner insurance. Deductibles for earthquake insurance, usually set at 5 or 10 percent of the cost of rebuilding, are higher than normal home coverage
If you read the story, however, you'll see the actual numbers reported are tiny, certainly no indication of a trend.
-- The Foti Albatross
Former Louisiana Attorney General Charles Foti is probably missed greatly by Mississippi AG Jim Hood -- Foti made him look super-competent in comparison. Another story here about cleaning up the debris of Foti.
-- Recent anti-concurrent cause decision in federal court in Florida
My attention was called to a summary judgment opinion of the federal district court for the Northern District of Florida, in Empire Indemnity Ins. Co. v. Winsett.
Florida uses a causation analysis in first-party property claims that is unusually precise and defined among the states, and also different from other states. First, courts look at whether causes are independent -- such as earthquake and a lightning strike, or windstorm and wood rot -- or dependent, such as when an earthquake breaks a gas main that starts a fire.
If the causes are dependent, the efficient proximate cause doctrine is used to determine which cause set the others in motion. If this cause is covered, the damage will be covered. If the causes are independent, courts use what they call a concurrent cause analysis -- as long as one cause is covered, the damage is covered.
Anti-concurrent cause language is upheld in Florida, but in this case, the court said it didn't preclude coverage. The anti-concurrent cause language was not contained as a "lead-in" to exclusions as one normally sees, but from what I can determine by reading the case, the provision was embedded in the mold exclusion itself. The exclusion was for bodily injury or property damage due in whole or in part to fungi or bacteria in or within a building, "regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury or damage."
The way the court analyzed this, the anti-concurrent cause language would apply only to truly concurrent causes -- those that are of independent origin. The allegations of the complaint, however, indicated dependent causes, according to the court: failure to install of vapor barrier set in motion mold growth, leading to damage to renters of property. Therefore, the court said, anti-concurrent cause language doesn't apply because the efficient proximate cause doctrine is used for dependent causes. Failure to install the vapor barrier, according to the court, was a covered cause and therefore the damage was covered. The court also placed some significance on the fact the anti-concurrent cause language was embedded in the exclusion and was not a lead-in provision, although I fail to see why this would make a difference, and the court made no effort to explain this -- possibly because the explanation wouldn't make any sense. The significance of lead-in language is only that it applies to more than one exclusion. One could just as well write anti-concurrent cause language into each exclusion, but it saves space to do it the other way.
One glaring omission in the court's analysis -- what of the words "or in any sequence" in the anti-concurrent cause provision. As those who have read my examinations of anti-concurrent cause language know, sequential damage is precisely what the court is talking about here: dependent causes that result in damage. The court gave no explanation for ignoring this policy language altogether. Neither did the court attempt to figure out what the words meant, why they would be in the policy or what distinction was drawn with the words between concurrent and sequential damage. The analysis could have been a lot better.
It looks like there wasn't any sequence.
"The renters make several claims for damages related to mold.
Defendants argue that despite the mold exclusion, these claims are covered
because the allegation that Defendants negligently failed to construct The
Preserves with a vapor barrier is a construction defect that is a covered
occurrence and the efficient proximate cause of the renter’s mold damage. The
Court agrees."
You have no idea what you are talking about. Under the court's analysis, the causes had to be either independent or dependent, therefore they are either concurrent or sequential.
David, thanks for calling out Bellesouth. I needed a nice pick me up this afternoon!
Here's a better way to assess posts by Bellesouth. She knows better, and is performing a valuable service as a court jester, throwing out asinine views and skewed observations to make us all feel intellectually advanced. It works! I never read her posts without feeling vastly superior. In this context, she's one of our most valuable resources and should be encouraged to post often, and without reservation. In this vein, I recommend that you think twice before posting critical responses. It's like railing against "The Onion."
I know anti-concurrent cause language seems harsh to a lot of people. But, apart from what the courts say, as a practical matter, in the absence of such anti-concurrent cause language, there IS coverage as long as at least one factor in the loss is a covered cause. Insurers, who are suspect in the eyes of Floridians anyway, can't go before juries expecting a lot of support on the which-came-first issue (which is the analysis under the dependent cause question). It's even less likely that insurers will prevail under the concurrent cause analysis, in which the damage is covered as long as any one of many causes is a covered cause of loss. Insurers, knowing this, usually end up folding their tents and going home at the mediation stage. Take the case of a collapsed building (which may not have actually collapsed, but may be covered if its structural integrity is materially or substantially impaired). Let's say the "collapse" condition was brewing for years, a problem created by rot and the effect of termite damage, and despite a number of red flags, the property owner failed to investigate. In all likelihood, these problems could not be called "hidden" (because of the red flags) and would thus not be covered causes of damage. But, let's say a windstorm came along and contributed to the situation. After "discovering" the collapse condition, the property owner would advance a claim under the policy. And, since wind is a covered cause of damage, the insurer would in all likelihood end up paying, even though most of the damage was from non-covered causes (and even though the windstorm would not, itself, have been enough to cause the building to collapse if it were otherwise structurally sound). I know you'll never admit this, Bellesouth, but what that means is that insureds end up receiving insurance benefits despite being entirely negligent in the care and maintenance of their properties. And that's just not right; it's certainly not what insurance is for.