The court determined there was no coverage for water intrusion based upon a comprehensive Exterior Insulation and Finish Systems (EIFS) Exclusion. Nat'l Am. Ins. Co. v. Gerlicher Co., LLC, 2011 Okla. Civ. App. LEXIS 79 (Okla. Ct. App. Aug. 29, 2011).

   Gerlicher purchased a commercial building constructed by general contractor Pinion Construction, Inc. Gerlicher then leased the building to the United States Fish & Wildlife Service. Subsequently, the Fish and Wildlife Service noted water intrusion, high humidity, and mold in the building.

   An expert report suggested three sources. First, water was trapped between two vinyl wall barriers, preventing evaporation. Second, a brick row ledge sloped towards the wall instead of away from the wall system. Third, the EIFS system at the windows had deteriorated caulking and holes along the wall system, allowing moisture to enter.

   Gerlicher sued Pinion for breach of implied warranty and negligence. National American agreed to defend Pinion under a reservation of rights and then sued Gerlicher for a declaratory judgment. The trial court granted National American's motion for summary judgment.

   The appellate court found the EIFS exclusion was determinative. It clearly excluded "coverage for damages that arise out of any work that you do . . . related to an EIFS system . . . . This includes any damage to a building or structure caused by the intrusion of water or moisture through an EIFS system . . . ." Consequently, the damages alleged by Gerlicher were excluded under this provision.

   Nevertheless, Gerlicher argued the "efficient proximate cause" doctrine prevented summary judgment. The doctrine applied when at least two identifiable caused combined to form a single property loss, and one was covered under the policy while the other one was excluded under the policy. If the cause which was determined to have set the chain of events in motion, the efficient proximate cause, was covered under the policy, the loss would likewise be covered.

   Here, however, the exclusion barred application of the efficient proximate cause doctrine. The only reasonable construction of the exclusion was that when more than one cause was involved in a loss that included EIFS, whether directly or indirectly, there was no coverage regardless of whether the causes acted concurrently or in any combination with EIFS.