CONSEQUENTIAL DAMAGES CAN BE RECOVERED AGAINST INSURER IN BREACH OF CONTRACT

Posted on June 1, 2019April 24, 2020 by Edward Garber

In a favorable case for insureds, the Fifth District Court of Appeal maintained that “when an insurer breaches an insurance contract, the insured is entitled to recover more than the pecuniary loss involved in the balance of the payments due under the policy in consequential damages, provided the damages were in contemplation of the parties at the inception of the [insurance] contract.” Manor House, LLC v. Citizens Property Insurance Corp., 44 Fla. L. Weekly D1403b (Fla. 5^thDCA 2019) (internal citations and quotation omitted). Thus, consequential damages can be recovered against an insurer in a breach of contract action (e.g., breach of the insurance policy) if the damages can be proven and were in contemplation of the parties at the inception of the insurance contract.

In Manor House, the trial court entered summary judgment against the insured holding the insured could not seek lost rental income in its breach of contract action against Citizens Property Insurance because the property insurance policy did not provide coverage for lost rent. However, the Fifth District reversed this ruling because the trial court denied the insured the opportunity to prove whether the parties contemplated that the insured, an apartment complex owner, would suffer lost rental income (consequential damages) if the insurer breached its contractual duties.

This ruling is valuable to insureds because Citizens Property Insurance, a creature of statute, cannot be sued for first-party bad faith. However, the Fifth District found that the consequential damages in the form of lost rental income did not require the insured to prove the insurer acted in bad faith, but merely, breached the terms of the policy. This holding can be extended to other breach of contract actions against an insurer when the insured suffered and can prove consequential-type damages caused by the breach.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

INSURER’S CONFESSION OF JUDGMENT THROUGH POST-LAWSUIT PAYMENT

Posted on May 11, 2019April 24, 2020 by Edward Garber

The recent opinion in the property insurance coverage dispute, Bryant v. Geovera Specialty Ins. Co., 44 Fla.L.Weekly D1232a (Fla. 4^thDCA 2019), discusses the doctrine known as an insurer’s “confession of judgment.” In this case, an insured suffered water damage from a pipe leak. The insurer paid the insured $6,000 because of sublimits in the property insurance policy. There was a $5,000 sublimit for mold and a $1,000 sublimit for water leakage that occurs over a period of 14 days or more. The insured sued the insurer for covered water damage arguing that the sublimits did not apply.

After the lawsuit was filed, an agreed order was entered that stayed the case pending an appraisal. The appraisal award did not apply the $1,000 sublimit to the water damage from the pipe leak and segregated out damage for mold. (The insurer already paid the mold sublimit). The insurer ended up paying the appraisal award for the water damage caused by the pipe leak after deducting its pre-lawsuit sublimit payment. The insurer paid the award and did NOT challenge the application of the $1,000 sublimit in court, although it could have since coverage issues are decided by courts.

An issue became whether the insurer’s post-lawsuit payment of the appraisal award above the $1,000 sublimit constituted an insurer’s confession of judgment.

“[I]t is well settled that the payment of a previously denied claim following the initiation of an action for recovery, but prior to the issuance of a final judgment, constitutes the functional equivalent of a confession of judgment.” Johnson v. Omega Ins. Co., 200 So. 3d 1207, 1215 (Fla. 2016). The confession-of-judgment doctrine “applies where the insurer has denied benefits the insured was entitled to, forcing the insured to file suit, resulting in the insurer’s change of heart and payment before judgment.” State Farm Fla. Ins. Co. v. Lorenzo, 969 So. 2d 393, 397 (Fla. 5th DCA 2007).

The confession-of-judgment doctrine is limited to situations where the filing of the lawsuit “acted as a necessary catalyst to resolve the dispute and force the insurer to satisfy its obligations under the insurance contract.” See, e.g., State Farm Fla. Ins. Co. v. Lime Bay Condo., Inc., 187 So. 3d 932, 935 (Fla. 4th DCA 2016). However, “[i]t is the incorrect denial of benefits, not the presence of some sinister concept of ‘wrongfulness,’ that generates the basic entitlement to the fees if such denial is incorrect.” Ivey v. Allstate Ins. Co., 774 So. 2d 679, 684 (Fla. 2000). Thus, “an incorrect denial of benefits, followed by a judgment or its equivalent of payment in favor of the insured, is sufficient” to constitute a confession of judgment and to allow the insured to recover attorney’s fees.

An attorney’s fees award is also appropriate “where, following some dispute as to the amount owed by the insurer, the insured files suit and, thereafter, the insurer invokes its right to an appraisal and, as a consequence of the appraisal, the insured recovers substantial additional sums.” Lewis v. Universal Prop. & Cas. Ins. Co., 13 So. 3d 1079, 1081 (Fla. 4th DCA 2009).

Even after Johnson, not all post-suit payments by an insurer will constitute a confession of judgment. We recently held that where an insurer valued a loss, issued payment, and was unaware of the insured’s disagreement with the damage valuation until the filing of the complaint, the insurer’s timely payment of an appraisal award during the litigation did not constitute a confession that the insurer breached the insurance policy. See Goldman v. United Servs. Auto. Ass’n, 244 So. 3d 310, 311-12 (Fla. 4th DCA 2018).

Bryant, supra.

Here, the appellate court held the insurer’s payment of the post-lawsuit appraisal award constituted a confession of judgment that it incorrectly denied benefits by invoking the $1,000 leakage sublimit. Once the insurer invoked the sublimits, it raised a coverage issue that only a court could decide and [t]his coverage issue went beyond a mere dispute about the valuation of the loss, so the insureds could not have simply invoked the policy’s appraisal provision before filing suit.” Bryant, supra. (“Under Johnson, “[o]nce an insurer has incorrectly denied benefits and the policyholder files an action in dispute of that denial, the insurer cannot then abandon its position without repercussion.” Here, the insurer’s payment of the appraisal award…demonstrated that GeoVera [insurer] had abandoned its pre-suit coverage position that the claim was subject to the $1,000 sublimit for long-term water leakage.”) (internal citation omitted)

INSURED UNDER PROPERTY INSURANCE POLICY SHOULD COMPLY WITH POST-LOSS POLICY CONDITIONS

Posted on April 29, 2019April 24, 2020 by Edward Garber

Your property insurance policy will contain post-loss policy conditions. Examples include submitting a sworn statement in proof of loss, providing documentation to your insurer, and sitting for an examination under oath. Insurers will require you, as the insured, to comply with post-loss policy conditions unless they elect to promptly deny coverage. If you do not comply with such post-loss policy conditions you can forfeit coverage under the policy and/or give the insurer the argument that any lawsuit you filed against the property insurer is premature. Thus, there really is no upside in refusing to comply with the post-loss policy conditions, which should be done in consult with an attorney or, as the case may be, a public adjuster.

For instance, in Safepoint Ins. Co. v. Sousa, 44 Fla. L. Weekly D994a (Fla. 3d DCA 2019), an insured submitted a property insurance claim for hurricane damage. The insurer requested the insured submit a sworn statement in proof of loss and provide documentation. The insured never did although she did submit for an examination under oath. The insurer ended up tendering insurance proceeds based on its adjustment of the claim. Thereafter, the insured sued its insurer and moved to compel an appraisal per the terms of the property insurance policy. In doing so, the insured provided an adjustment / estimate from her public adjuster that was approximately $100,000 more than the proceeds the insured received (which had never been provided to the insurer). The insurer opposed the motion based on the insured’s failure to comply with post-loss policy conditions (i.e., submitting the sworn statement in proof of loss and documentation). The appellate court agreed that the insured’s failure to comply with these post-loss policy conditions clearly spelled out in the property insurance policy rendered it PREMATURE for the insured to compel an appraisal.

PROPERTY INSURER INVOKING APPRAISAL UNDER PROPERTY INSURANCE POLICY

Posted on February 24, 2019April 24, 2020 by Edward Garber

Property insurance policies routinely contain an appraisal provision. The provision may read something to the effect:

If you and we fail to agree on the amount of loss, either may request an appraisal of the loss. However, both parties must agree to the appraisal. In this event, each party will choose a competent and impartial appraiser within 20 days after receiving a written request from the other. . . . If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of the loss.

Safepoint Insur. Co. v. Gomez, 44 Fla.L.Weekly D239b (Fla. 3d DCA 2019).

In Safepoint, the Third District Court of Appeal maintained if the property insurer invokes appraisal, it waives the right to subsequently demand compliance with post-loss conditions in the policy as a condition precedent to that appraisal. (“‘Appraisal exists for a limited purpose – the determination of the amount of loss.’” By invoking appraisal pursuant to the terms of the insurance policy, Safepoint [insurer] waived the requirement of compliance with post-loss obligations as a condition precedent to that appraisal.”) Safepoint, supra (internal citation omitted).

In Safepoint, the insured (policyholder) submitted a property insurance claim. The insurer sent payment for the covered loss, but the amount of payment was disputed. As a result, the insurer invoked the appraisal process in the property insurance policy, and the insured agreed. As the appraisal process was underway and an umpire selected, the insurer sent a letter to the insured demanding a sworn statement in proof of loss, examinations under oath, and additional documentation—post-loss requirements of the insured in the insurance policy. The insured did not comply and the insurer used this non-compliance as an excuse to deny the claim. This prompted the insured to file a breach of contract lawsuit against the insurer and move to compel the insurer to complete the appraisal process that it invoked. The trial court agreed, as affirmed by the Third District. The insurer could not refuse to complete the appraisal process that it invoked by thereafter requiring the insured to comply with post-loss conditions in the policy.

ASSIGNMENT OF BENEFITS PROVISION IN HOMEOWNER’S POLICY IS ENFORCEABLE

Posted on September 7, 2018April 24, 2020 by Edward Garber

When it comes to property insurance claims, particularly those under a homeowner’s insurance policy, an insured will oftentimes assign its benefits under the policy to a restoration contractor. The request for the assignment may likely be prompted by the contractor that does not want to perform the work without the assignment of benefits. The assignment of benefits (also known by the acronym “AOB”) allows the third-party contractor (as the assignee of the insured) to sue the insurer directly for benefits under the policy associated with the restoration work.

Recently, the Fourth District Court of Appeal found enforceable a provision in a homeowner’s insurance policy that stated, “[n]o assignment of claim benefits, regardless of whether made before a loss or after a loss, shall be valid without the written consent of all ‘insureds,’ all additional insureds, and all mortgagee(s) named in this policy.” Restoration 1 of Port St. Lucie v. Ark Royal Ins. Co., 43 Fla.L.Weekly D2056a (Fla. 4th DCA 2018). This meant that for the assignment of benefits to be valid, all insureds and the insured’s mortgagee had to sign off on the assignment.

In this case, the restoration contractor got the assignment of benefits signed by the wife-insured, but the assignment was not signed by the husband-insured or the mortgagee. Based on this, the insurer denied payment to the restoration contractor. The restoration contractor sued the insured based on the assignment and the Fourth District affirmed the trial court in dismissing the complaint holding that the language of the assignment of benefits provision in the policy is enforceable (meaning the contractor needed the written consent of all insureds and the mortgagee in order to effectuate a valid assignment).

Regardless of your feelings about assignment of benefits, the language in the homeowner’s policy must be reviewed to ensure compliance with any assignment of benefits language in the policy.

THE CONTINGENCY FEE MULTIPLIER (FOR INSURANCE COVERAGE DISPUTES)

Posted on August 25, 2018April 24, 2020 by Edward Garber

The contingency fee multiplier: a potential incentive for taking a case on contingency, such as an insurance coverage dispute, where the insured sues his/her/its insurer on a contingency fee basis.

In a recent property insurance coverage dispute, Citizens Property Ins. Corp. v. Agosta, 43 Fla.L.Weekly, D1934b (Fla. 3d DCA 2018), the trial court awarded the insured’s counsel a contingency fee multiplier of two times the amount of reasonable attorney’s fees. The insurer appealed. The Third District affirmed the contingency fee multiplier.

Of interest, on appeal—which is reviewed under an abuse of discretion standard of appellate review–the Third District analyzed the state of Florida law on contingency fee multipliers.

To begin with, Florida has adopted the lodestar approach for determining reasonable attorney’s fees based on the following factors to consider (known the Rowe factors based on the Florida Supreme Court case):

(1) The time and labor required, the novelty and difficulty of the question involved, and the skill requisite to perform the legal service properly.

(2) The likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer.

(3) The fee customarily charged in the locality for similar legal services.

(4) The amount involved and the results obtained.

(5) The time limitations imposed by the client or by the circumstances.

(6) The nature and length of the professional relationship with the client.

(7) The experience, reputation, and ability of the lawyer or lawyers performing the services.

(8) Whether the fee is fixed or contingent.

Agosta citing Florida Patient’s Compensation Fund v. Rowe, 473 So.2d 1145 (Fla. 1985).

Based on the consideration of these factors, the trial court determines through an evidentiary hearing a reasonable hourly rate to multiply by a number of reasonable hours expended in the litigation. This is referred to as the lodestar amount or lodestar figure. However, the court may add to this lodestar amount by tacking on a contingency fee multiplier. For example, assume the trial court found 100 reasonable hours were incurred at the reasonable hourly rate of $300. This would result in an attorney’s fees award of $30,000. But, with the contingency fee multiplier, the trial court can add to this. A multiplier of 2 would result in an attorney’s fees award of $60,000, hence the incentive for moving for the multiplier.

In determining whether to add a contingency fee multiplier, the trial court must consider competent, substantial evidence in the record (offered at the evidentiary hearing) of these three factors:

(1) whether the relevant market requires a contingency fee multiplier to obtain competent counsel;

(2) whether the attorney was able to mitigate the risk of nonpayment in any way; and

(3) whether any of the factors set forth in Rowe are applicable [the factors mentioned above], especially, the amount involved, the results obtained, and the type of fee arrangement between the attorney and his client.

Agosta citing Standard Guarantee Ins. Co. v. Quanstrom, 555 So.2d 828 (Fla. 1990)

There has been a debate as to whether the contingency fee multiplier only applies in rare and exceptional circumstances. The Florida Supreme Court (hopefully) put this issue to bed rejecting the argument that the contingency fee multiplier only applies in rare and exceptional circumstances. Agosta citing Joyce v. Federated National Ins. Co., 228 So.3d 1122 (Fla. 2017).

Just as important, and perhaps the most important to me, the Florida Supreme Court held that a “fee multiplier ‘is properly analyzed through the same lens as the attorney when making the decision to take the case,’ as it ‘is intended to incentivize the attorney to take a potentially difficult or complex case.’” Id. quoting Joyce, 228 So.3d at 1133. This is important because the complexity of a case is not determined at looking at a case in hindsight based on the actual outcome of the case, but looking at a case through the same lens as the attorney at the time the decision is made to handle the case. Id. citing Joyce.

The Florida Supreme Court also stated that the first contingency fee multiplier factor—the relevant market factor—is based on whether there are attorneys in the relevant market who have the skills to effectively handle the case and would have taken the case absent the availability of a contingency fee multiplier. Id. citing Joyce.

Finally, the Florida Supreme Court stated that the third contingency fee multiplier factor that considers the results obtained is not based on the amount of recovery, even a recovery not exceptionally large—“the Florida Supreme Court held that the trial court correctly analyze the ‘outcome’ of that case when it found that ‘[a]lthough the amount involved [$23,500] was ‘not exceptionally large,’ it was material to the Joyces [plaintiffs].” Id. quoting Joyce, 228 So.3d at 1125.

The contingency fee multiplier adds incentive to handle certain insurance coverage disputes on contingency. If a multiplier is obtained, it definitely rewards the risk of taking a case on contingency (and certainly one of the reasons I explore such contingency fee options!).

PROPERTY INSURANCE EXCLUSION: LEAKAGE OF WATER OVER 14 DAYS OR MORE

Posted on June 29, 2018April 27, 2020 by Edward Garber

The recent opinion of Whitley v. American Integrity Ins. Co. of Florida, 43 Fla.L.Weekly D1503a (Fla. 5^th DCA 2018), as a follow-up to this article on the property insurance exclusion regarding the “constant or repeated seepage or leakage of water…over a period of 14 or more days,” is a beneficial opinion to insureds.

In this case, the insured had a vacation home. A plumbing leak occurred that caused water damage to the home. The plumbing leak occurred during a period of time that lasted approximately 30 days. For this reason, the property insurer denied the claim per the exclusion that the policy does not cover loss caused by repeated leakage of water over a period of 14 or more days from a plumbing system. Summary judgment was granted by the trial court in favor of the insurer based on this exclusion.

The insured countered that the policy did not address whether it covered a loss occurring within the first 14 days. The insured argued, and the appellate court agreed, that the insurer therefore failed to establish that the water loss did not occur within the first 14 days. “The undisputed fact that the property was exposed to water for more than fourteen days did not establish that the loss occurred on the fourteenth or later day of exposure pursuant to the exclusionary provision.” Whitley, supra.

This is a beneficial case to an insured because if loss occurred due to the continued seepage or leakage of water over a period of 14 days or more (e.g., continuous plumbing leak), the insured can establish it is still entitled to coverage for loss that occurs during the first 14 days. This puts the onus on the insurer to argue the loss occurred after the 14th day. However, the insured will counter that the loss occurred during the first 14 days. In other words, the insured can make this a question of fact for the jury.

COMPETING EXPERT WITNESSES IN AN INSURANCE COVERAGE DISPUTE

Posted on April 2, 2018April 2, 2018 by Edward Garber

Oftentimes, insurance coverage disputes involve competing expert witnesses. The experts render different expert opinions regarding a topic that goes to coverage and/or damages. An example of competing expert witnesses can be found in the recent property insurance coverage dispute, Garcia v. First Community Ins. Co., 43 Fla.L.Weekly D671a (Fla. 3d DCA 2018).

In this case, an insured submitted a claim under her homeowner’s policy for water damage due to a roof leak. She claimed her damage was approximately $23,000. The insurer denied coverage and an insurance coverage dispute ensued.

The insured’s policy, akin to many homeowner’s policies, contained exclusions for loss caused by:

h. Rain, snow, sleet, sand or dust to the interior of a building unless a covered peril first damages the building causing an opening in a roof or wall and the rain, snow, sleet, sand or dust enters through this opening.

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i. (1) Wear and tear, marring, deterioration;

The insurer sent an engineer to inspect the insured’s property and the engineer (expert) opined that the water intrusion was not covered under the policy based on the aforementioned exclusions. Her opinion was that the water intrusion through the roof was the result of deterioration from age, tree branch abrasions, and construction defects based on how nails were installed into the shingles. Based on this opinion, the insurer was denying coverage based on the (i) wear and tear, marring and deterioration exclusion and (ii) rain intruded through the roof based on a peril (construction defect) that was not covered under the policy.

The insured, as expected, had a competing expert that opined that a hail impact or high wind uplift (covered peril) in the days leading up to the rain event caused water to intrude through the roof and cause interior damage. Under this opinion, the insured was presenting an expert opinion for coverage and why the insurer’s exclusions were inapplicable.

In this case, surprisingly, the trial court granted summary judgment in favor of the insurer. However, this was reversed on appeal because the competing opinions as to coverage and the cause of the insured’s loss created a genuine issue of material fact. Summary judgment cannot be granted if there are genuine issues of material fact. See Garcia, supra, (“Given this conflict in the material evidence as to the cause of the loss, the trial court erred in entering final judgment in favor of First Community [insurer].”).

Another argument the insurer raised was that its engineer inspected the property within months after the date of loss whereas the insured’s expert is basing an opinion on an inspection that occurred three years after the fact. This fact, albeit true, does not create a genuine issue of material fact. Rather, it goes to the credibility of the experts at trial. Which expert is more credible regarding the cause of the loss: the insurer’s expert that inspected the property a few months after the loss or the insured’s expert that inspected the property years after the loss. Well, the issue of credibility and how a jury / trier of fact weighs this in consideration of other evidence is not appropriate in determining a motion for summary judgment. See Garcia, supra.

Experts are an important part of construction disputes including insurance coverage disputes and it is not uncommon for there to be competing expert opinions as to the cause of a loss, a defect, and, of course, damages.

PROPERTY INSURANCE EXCLUSION FOR CONSTANT OR REPEATED LEAKAGE OF WATER

Posted on March 1, 2018April 27, 2020 by Edward Garber

A property insurance policy, no different than any insurance policy, contains exclusions for events that are NOT covered under the terms of the policy. One such common exclusion in a property insurance policy is an exclusion for damages caused by “constant or repeated seepage or leakage of water…over a period of 14 or more days.”

The application of this exclusion was discussed in the recent opinion of Hicks v. American Integrity Ins. Co. of Florida, 43 Fla. L. Weekly D446a (Fla. 5^th DCA 2018). In this case, while the insured was out of town, the water line to his refrigerator started to leak. When the insured return home over a month later, the supply line was discharging almost a thousand gallons of water per day. The insured submitted a property insurance claim. The property insurer engaged a consultant that opined (likely, correctly) that the water line had been leaking for at least five weeks. Based on the above-mentioned exclusion, i.e., that water had been constantly leaking for over a period of 14 days, the insurer denied coverage. This denial led to the inevitable coverage dispute.

The trial court granted summary judgment in favor of the insurer in the insurance coverage lawsuit. The insured argued at trial and then on appeal that this exclusion only applies to losses caused by water on day 14 and after. For this reason, the insured attempted to calculate his water damage losses that occurred during the first 13 days of the supply line leaking. The appellate court agreed with the insured:

In light of the general principle that insurance policy provisions susceptible to more than one interpretation should be construed liberally in favor of the insured and strictly against an insurer, and that exclusionary clauses should be read even more narrowly, we hold that an insurance policy excluding losses caused by constant or repeated leakage or seepage over a period of fourteen days or more does not unambiguously exclude losses caused by leakage or seepage over a period of thirteen days or less. It is not unambiguously clear that a provision excluding losses caused by constant leakage of water over a period of fourteen or more days likewise excludes losses caused by constant leakage of water over a period of less than fourteen days. And ambiguous insurance provisions — those susceptible to more than one meaning, one providing coverage and the other denying it — must be construed against the insurer and in favor of coverage.

Hicks, supra (internal citations omitted).

This is a favorable ruling for an insured as it established coverage within the first 13 days of the water supply line leaking. The damages associated with that loss is a material issue of fact to be determined by the jury (or judge if it is a bench trial). But, importantly, the ruling established coverage under this exclusion, meaning the insurer could not categorically bar coverage because the leak constantly occurred for 14 or more days; rather, the insured’s damages, if any, would be limited to the first 13 days of the leak.

BURDEN OF PROOF UNDER ALL-RISK PROPERTY INSURANCE POLICY

Posted on January 22, 2018January 22, 2018 by Edward Garber

A recent Florida case, Jones v. Federated National Ins. Co., 43 Fla. L. Weekly D164a (Fla. 4^th DCA 2018) discusses the burden of proof of an insured in establishing coverage under an all-risk property insurance policy. Getting right to this critical point, the court explained the burden of proof as follows:

1. The insured has the initial burden of proof to establish that the damage at issue occurred during a period in which the damaged property had insurance coverage. If the insured fails to meet this burden, judgment shall be entered in favor of the insurer.

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2. If the insured’s initial burden is met, the burden of proof shifts to the insurer to establish that (a) there was a sole cause of the loss, or (b) in cases where there was more than one cause, there was an “efficient proximate cause” of the loss.

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3. If the insurer meets the burden of proof under either 2.(a) or 2.(b), it must then establish that this sole or efficient proximate cause was excluded from coverage by the terms of the insurance policy. If the insurer does so, then judgment shall be entered in its favor. If the insurer establishes that there was a sole or efficient proximate cause, but fails to prove that this cause was excluded by the all-risk insurance policy, then judgment shall be entered in favor of the insured.

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4. If the insurer fails to establish either a sole or efficient proximate cause, and there are no applicable anti-concurrent cause provisions, then the concurrent cause doctrine must be utilized. Applying the concurrent cause doctrine, the insurer has the initial burden of production to present evidence that an excluded risk was a contributing cause of the damage. If it fails to satisfy this burden of production, judgment shall be entered in favor of the insured.

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5. If the insurer does produce evidence that an excluded risk was a concurrent cause of the loss, then the burden of production shifts to the insured to present evidence that an allegedly covered risk was a concurrent cause of the loss at issue. If the insured fails to satisfy this burden of production, judgment shall be entered in favor of the insurer.

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6. If the insured produces evidence of a covered concurrent cause, the insurer bears the burden of proof to establish that the insured’s purported concurrent cause was either (a) not a concurrent cause (i.e., it had no (or a de minimis) causal role in the loss), or (b) excluded from coverage by the insurance policy. If the insurer fails to satisfy this burden of proof, judgment shall be entered in favor of the insured.

Jones, supra.

In this case, the insured suffered roof damage and claimed it was the result of a hailstorm, a peril covered under the policy. The property insurer denied coverage contending the roof damage was not covered under the policy due to certain exclusions including, without limitation: (i) wear and tear, (ii) faulty or defective design, and (iii) existing damage. The homeowner argued that the concurrent cause doctrine should apply to determine if there was coverage under this all-risk property insurance policy. (Check out this article for more on the concurrent cause doctrine.) This doctrine holds that insurance coverage may exist if an excluded peril and covered peril concurrently cause a loss. The trial court did not apply this doctrine; rather, it applied the doctrine known as the efficient proximate cause doctrine which holds that if there are concurrent causes for a loss, the peril that set the other peril in motion is the peril that the loss is attributable to, i.e., you are looking at the most responsible cause of the loss. Thus, if an excluded peril set a covered peril in motion, i.e., it is the most responsible cause of the loss, the loss would be attributable to the excluded peril and not covered by the policy.

The court, relying on a Florida Supreme Court decision, maintained that it was error to instruct the jury on the efficient proximate cause doctrine without the jury first determining whether an efficient proximate cause of the loss could be determined. If it could not be determined, the concurrent cause doctrine would apply and the jury would determine if one of the concurrent causes (perils) was covered under the policy. For instance, if the jury could not determine whether one peril set another peril in motion, the jury would determine whether the hailstorm concurrently caused the roof damage with another peril (e.g., defective design); and, if so, whether the hailstorm is a covered peril such that the roof damage would be covered under the policy.

Notably, the court noted that certain exclusions the insurer relied on contain anti-concurrent cause language, which negates the application of the concurrent cause doctrine. However, since some of the exclusions the insurer relied on did not specifically incorporate anti-concurrent cause language, the jury could have found that the hailstorm concurrently caused the roof damage with an exclusion that did not contain the anti-concurrent cause language meaning the concurrent cause doctrine would apply.

I know this is confusing. I agree, it very well can be confusing. Nonetheless, what this emphasizes is the importance of strategy when it comes to presenting a property insurance claim to trigger the application of the concurrent cause doctrine and preparing jury instructions, which is the law you want the jury to follow. This also emphasizes the importance of the verdict form which is the form the jury fills out to decide the outcome of the case.