Last week, the Florida Supreme Court put policyholders’ minds at ease in Sebo v. American Home Assurance Co. by overturning a lower appellate court’s decision holding that the concurrent cause doctrine had no place in Florida first-party property claims.

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Until the appellate court’s decision in 2013, Florida courts had routinely applied the concurrent cause doctrine in deciding whether a loss caused by two or more independent perils was covered under a property insurance policy. But that was turned on its head when the appellate court found the concurrent cause doctrine had no place in first-party insurance claims — regardless of whether the causes of loss were dependent or independent. Instead, the appellate court held the efficient proximate cause doctrine applied and remanded the case for a determination of the efficient cause of the loss.

So what are the concurrent cause and efficient proximate cause doctrines? How do these doctrines affect policyholders? Continue Reading Florida Supreme Court holds that the concurrent cause doctrine is alive and well

One of the most misunderstood provisions in a Commercial General Liability policy is the first sentence, which provides that the insurance company promises to provide coverage for damages “because of” bodily injury or property damage. Many people, including seasoned insurance professionals, believe CGL policies merely provide coverage “for” bodily injury or property damage. We see this every day, including in motions filed by insurance companies. Continue Reading Court finds plaintiff’s attorney fees covered by liability policy

Photo by Brandon Anderon, courtesy of Flickr
Photo by Brandon Anderon, courtesy of Flickr

Yesterday, the Oregon Court of Appeals wisely decided that, at times, it’s best not to even try to count the angels sitting on the head of a pin. In De Zafra v. Farmers Ins. Co. (March 25, 2015), the plaintiff, Jennifer De Zafra, was the victim of a drive-by shooting from a car that had pulled up next to the car in which she was riding in Portland. Jesse Guerrero was the driver of the other car; his auto insurer denied coverage for De Zafra’s gunshot injuries. This denial made Guerrero an “uninsured” driver for purposes of the “uninsured motorist” (or “UM”) coverage provided by Farmers Insurance for the car in which De Zafra was riding. But Farmers denied De Zafra’s UM claim, relying on a 1993 decision by the Court of Appeals holding that the victim of a drive-by shooting could not recover under the UM policy because getting shot from an uninsured car did not “arise out of the ownership, maintenance, or use” of the uninsured vehicle —the injuries were too remote to the “use” of the vehicle, which were instead “directly caused by the use of a gun.”

But after this decision implying a requirement that injuries be caused “directly” by the use of the vehicle, in 1997 the Oregon Supreme Court decided another auto-insurance case under a far less miserly rule. In this later case, the Supreme Court interpreted language in the “PIP” (personal-injury protection) statutes governing auto policies. The court held that the gunshot wound suffered by the insured driver in a carjacking was covered because it was bodily injury “resulting” from the “use” of the vehicle, even though the carjacker had ordered the driver out of his car, unsuccessfully tried to put him in the trunk, and then shot him 30 feet away from the vehicle.

In light of this decision, the De Zafra court had to decide whether there was a meaningful difference between damages “arising out of the use” and those “resulting from the use” of an insured vehicle —a question surely as difficult as counting angels was to medieval priests. The court refused to draw any such line, holding that “the causal link in the [PIP and UM] statutes between an injury and a vehicle is the same.” And after the De Zafra court held that the plaintiff’s gunshot wound was covered under the UM policy of her driver’s car, it is clear that the necessary “causal link” may be far more attenuated than an insurer might like to think.

Despite what insurers will argue, De Zafra should benefit insureds looking for coverage outside of the auto-insurance context. Under standard liability policies, for example, insurers cover claims for bodily injury and property damage “caused by” an accident, and a builders’ risk policy typically covers damages “caused by or resulting from” specified perils like fire or lightning. In these policies, the “causal link” drives whether coverage will exist. Because these policies typically do not limit coverage to damages “directly” caused by the insured risk, De Zafra stands as a powerful statement that Oregon law will brook no finer distinction than the policy language necessarily and absolutely requires.