The Florida District Court reversed erroneous jury instructions that adopted the efficient proximate cause doctrine in determining whether the insurer was responsible for the insureds’ collapsed roof. Jones v. Federated National Ins. Co., 2018 Fla. App. LEXIS 561 (Fla. Ct. App. Jan. 17, 2018).
The insureds filed a claim for their damaged roof, contending that the damage was caused by a hailstorm. Federal National Insurance Company denied the claim based upon exclusions for “wear and tear, marring, deterioration;” “faulty, inadequate or defective design;” “neglect;” “existing damage;” or “weather conditions.”
The insureds filed suit for breach of their all-risk policy. At trial, the insureds presented evidence that the hailstorm caused damage to the roof. Federated presented evidence that the hailstorm caused no meaningful damage, and that all the damage had already existed prior to the hailstorm as wear and tear. In rebuttal, the insureds presented evidence that the leaking solar panels could not have been the only cause of damage, pointing to the presence of hundreds of divots spread across the roof.
The insureds took issue with the jury instruction that required them to prove that the hailstorm was the “most substantial or responsible cause” of damage to the roof. The instruction read:
Did [the insureds] prove by the greater weight of the evidence that they sustained a direct physical loss to their roof as a result of the hailstorm . . . which was the most substantial or responsible cause of the damage to the roof?
The insureds submitted that the trial court would be wrong to apply the efficient proximate cause doctrine as advanced by Am. Home Assurance Co. v. Sebo, 141 So. 3d 195 (Fla. 2d DCA 2013). They argued that the policy was all-risk, covering all losses except those caused by specifically excluded events. The insureds submitted that the concurrent cause doctrine applied pursuant to Wallach v. Rosenberg, 527 So. 2d 1386 (Fla. 3d DCA 1988).
The trial court did not change the jury instruction and the jury determined that the insureds could not satisfy their burden of proof as set forth in the jury instruction.
On appeal, the court noted that the efficient proximate cause provided that where there was a concurrence of different perils, the efficient cause – the one that set the other in motion – is the cause to which the loss is attributable. The concurrent cause doctrine, on the other hand, provided that coverage may exist where an insured risk constituted a concurrent cause of the loss even when it was not the prime or efficient cause.
The insureds also argued that the trial court erred by requiring them to first prove that the hailstorm was the efficient cause of damage to the roof. The Court of Appeals agreed.
The all-risk policy stated, “We insure against risk of direct loss to property described in Coverages A and B only if that loss is a physical loss to property.” Coverage A specifically covered, “the dwelling on the residence premises shown in the Declarations, including structures attached to the dwelling.” After explaining that Federated would cover all direct physical losses to the dwelling, the policy then listed the specific exclusions to the coverage.
Because the policy was all-risk, the allocation of proof in the jury instruction was erroneous. The trial court placed the initial burden of proof on the insureds to demonstrate that the hailstorm was “the most substantial or responsible cause of damage to the roof.” Under an all-risk policy, once the insured established the loss within the terms of the policy, the burden shifted to the insurer to prove that the loss arose from a cause which was excepted. This was consistent with the notion that an all risk policy guarded against all risks except those explicitly excluded by the policy.
Because the jury instruction was erroneous, the case was reversed and remanded for a new trial.