The Florida Court of Appeals remanded the case after the insured was awarded an $8 million dollar judgment against its property insurer for hurricane and other damage to a home. Am. Home Assur. Co. v. Sebo, 2013 Fla. App. LEXIS 14799 (Fla. Ct. App. Sept. 18, 2013).
Sebo purchased his home in April 2005, when it was four years old. It was insured under a manuscript policy issued by AHAC for $8 million. The all-risk policy covered rain, but excluded damage caused by faulty, inadequate or defective planning.
After Sebo bought the home, water leaks were noticed. Sebo believed that the house suffered from major design and construction defects. In October 2005, Hurricane Wilma struck and further damaged the home.
AHAC denied coverage for most of the claimed losses, paying only $50,000 for mold damage. The house could not be repaired and was eventually demolished. Sebo sued a number of defendants, including the sellers, the architect, and the construction company that built the home. Sebo later amended his complaint to add AHAC as a defendant. Sebo settled with most of the other defendants and proceeded to trial on his declaratory relief action against AHAC.
The trial court applied the concurrent causation doctrine, under which coverage is permitted whenever two or more causes contribute to the loss, and at least one of the causes is a risk covered under the policy.
The Court of Appeal reversed and remanded after determining that the efficient proximate cause doctrine should apply to disputes regarding coverage under property policies. Under this doctrine, the finder of fact determines which peril was the most substantial or responsible factor in the loss. If the policy insures against that peril, coverage is provided. If the policy excludes the peril, there is no coverage. A new trial was required to examine the causation of Sebo's loss under the efficient proximate cause theory.
We are informed by Sebo's counsel that an appeal will be made to the Florida Supreme Court before remand to resolve a dispute among the Florida Courts of Appeal on whether the concurrent causation doctrine or the efficient proximate cause doctrine should apply.
