Under the doctrine of proximate cause, where a peril specifically insured against sets in motion other causes which, in an unbroken sequence between the act and final loss, produces the result for which recovery is sought, the insured peril is regarded as the "proximate cause" of the entire loss and coverage exists.  The doctrine was unsuccessfully relied upon by many insureds in the post-Katrina litigation to argue flood damage was covered because wind was the efficient proximate cause of loss of property. As we have explained in prior posts [here, here, and here], the anti-concurrent causation clause in many property policies effectively writes the doctrine of efficient proximate cause out of a policy.

     Nevertheless, the State of Washington recognizes the doctrine of efficient proximate cause which recently came into play in a case before the federal district court.  See  Terminal Freezers Inc. v. U.S. Fire Ins., 2008 U.S. Dist. LEXIS 48280 (D. Wa. June 23, 2008).  The insured owned two freezer warehouses that were improperly constructed.  Rubber vapor retarders did not adhere to the walls, allowing water vapor to enter the building.  This caused excess ice formation.  The insured made a claim for loss under commercial all risk property policies issued by U.S. Fire.  The policies excluded losses resulting from defective construction. 

     U.S. Fire denied coverage because of construction defects in the rubber vapor retarders.  The insured filed suit.  On cross motions for summary judgment, the Court was aided by the efficient proximate cause doctrine in addressing whether the loss was caused by defective construction.  The insured argued that the water vapor initiated a chain of causation and that defective construction of the water vapor barriers was but a link in the chain.  The Court disagreed.  The efficient proximate cause of the loss was the defective construction (which was excluded from coverage) of the water vapor barriers, facilitating the entry of water vapor, which froze and resulted in substantial ice buildup.  Accordingly, U.S. Fire’s motion for summary judgment was granted.

     Hawaii appellate courts have never addressed whether the efficient proximate cause doctrine would survive an anti-concurrent causation clause in a property or all risk policy.