In Builders' Mutual Ins. Co. v. Glascarr Prop., Inc., No. COA09-486, 2010 N.C. App. LEXIS 186, (N.C. Ct. App. Feb. 2, 2010), the court found no coverage for loss caused by mold because of the anti-concurrent causation clause. Whether reliance on the anti-concurrent causation clause was correct is difficult to determine from the facts set forth in the decision.
The insured purchased a builders' risk policy. After completing construction of a house, vandals broke in and left water taps running, causing extensive damage. After a claim for $102,161.44 was submitted for losses arising from the vandalism, the insurer paid $101,661.44.
The insured later discovered mold in the house, caused by the water damage. An additional claim for $39,000 for mold remediation was submitted. This claim was denied based on the exclusion for losses caused by mold.
The parties agreed the policy covered losses from water damage caused by vandalism. The parties disagreed, however, on whether the policy covered reimbursement for the cost of mold remediation. The insured sued, but the trial court found no coverage.
On appeal, the court considered the policy's the anti-concurrent causation clause:
We will not pay for a "loss" caused directly or indirectly by any of the following. Such "loss" is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the "loss".
. . .
f. The presence, growth, proliferation, spread, or any activity of "Fungi", wet or dry rot or "microbes."
The court determined this clause unequivocally excluded payment for losses "caused directly in indirectly by" mold, and the exclusion applied "regardless of any other cause or event that contributed concurrently or in any sequence to the 'loss.'" Therefore, payment of a claim for the cost of mold remediation was excluded.
Should the anti-concurrent causation clause have been applied? The opinion notes that, "the water damage led to the formation of the mold." Further, "vandalism caused water damage, which in turn, caused the formation of the mold." Finally, the mold was discovered "later."
Typically, the anti-concurrent causation clause involves two different forces contributing to the exact same damage. If two or more forces cause different, distinct, and divisible damage, only single causation exits and the anti-concurrent causation clause does not come into play. If water damage "led to" formation of the mold and the mold damage was discovered "later," it does not seem likely the damage was exactly the same.
Some cases have held that mold loss following water damage is covered despite the exclusion for mold. See The Home Ins. Co. v. McClain, 2000 Tex. App. LEXIS 969 (Tex. Ct. App. Feb. 10, 2000)(mold loss that follows water damage is caused by water damage, not mold damage, so policy's exclusion for mold does not apply); Flores v. Allstate Texas Lloyd's Co., 278 F. Supp. 2d 810, 815 (S.D. Tex. 2003)(when mold damage ensues form water damage which is covered under the policy, the mold damage is covered despite the exclusion). Neither of these cases, however, discuss whether the policies included an anti-concurrent causation clause.
