TALLAHASSEE — The Florida Supreme
Court recently used concurrent-cause doctrine, rather than the
efficient proximate-cause doctrine, in determining the coverage of an
all-risk property-insurance policy.
The court ruled
in favor of the policyholder and came to its decision in the case
Sebo v. American Home Assurance Co. Inc..
The plaintiff, John
Sebo, wanted a review of the determination by the 2nd District Court
of Appeals that sided with the insurer, American Home Assurance Co.
Inc. The court denied coverage to Sebo on his $8 million homeowner's
The Sebo case concerned a private, high-ticket
residence in Naples, Florida. The property first experienced water
damage during rainstorms that were caused by construction defects.
Then, in 2005, Hurricane Wilma hit, and more property and wind damage
The water damage because of defects was denied by
the homeowner's insurance policy. The homeowner decided to file suit
against their insurer.
“The insurer relied on exclusionary
language in the insured’s policy,” Perry Goodman, an attorney
with Lewis Brisbois Bisgaard and Smith LLP, told The Florida
Record. “However, the court determined if you have independent
perils and one is covered and the other is excluded, they converge to
cause a single loss. The policy must then provide coverage under the
concurrent-cause doctrine, and this is what the court applied.”
Florida Supreme Court upheld
a ruling that was previously adopted in Wallach v. Rosenberg, a case
heard in 1988, which stated if one cause is not the efficient cause
among multiple causes, the two causes must be deemed equal.
basically what the case found,” Goodman said. “And that is where
the concurrent-cause doctrine comes into play.”
concurrent-cause doctrine is used when there are two combined
defects, or multiple causes, causing a single peril. If one peril is
covered under a homeowner’s insurance policy, the other must be
covered, as well.
The court determined that the
efficient-proximate cause could not be used in the Sebo case. It was
decided that, when defects in the structure of the home and hurricane
damage converge, the main reason for the cause of damage could not be
found. Therefore, the efficient-proximate cause could not be
“The concurrent-cause doctrine, rather than the
efficient-proximate cause, was the appropriate method in this
determination,” Goodman said. “Because the causes were
concurrent, the loss must be covered.”
The Florida Supreme Court
found indisputable evidence that Sebo’s homeowner's insurance
policy included both structural defects caused by rainwater damage
and hurricane-wind damage combined to cause property
Therefore, the efficient proximate-cause doctrine could
not be used and the concurrent-cause doctrine came into play.
could change the way insurance companies look at the language of a
policy,” Goodman said.
Originally, the insurer paid only $50,000
in mold damage through the homeowner's multiple risk policy. In the
end, the home could not be repaired and was demolished.