On May 13, 2020, the Third District Court of Appeal released their decision in  Security First Insurance Company v. John Czelusniak  (hereinafter “ Czelusniak”). [1]   The  Czelusniak  opinion discusses the application of the doctrine of anti-concurrent causation (hereinafter “ACC”) as it relates to exclusionary provisions in insurance policies. 

Background and Facts

While the appellate decision does not mention this, a review of the complaint shows that, in 2016, “heavy rains and wind caused roof and water damage” through the roof, windows, and doors.  The claim was denied due to the water damage exclusionary endorsement contained within Security First's policy which states, in pertinent part, that “water damage, meaning… water penetration through the roof system or exterior walls or windows” is “excluded regardless of any other cause or event contributing concurrently or in any sequence to the loss.” [2]  The case went to trial and, ultimately, the judge granted directed verdict in favor of the insured stating that, because the policy did not specifically exclude damage caused by water coming in through doors, coverage for such damages should be afforded.  In rendering his ruling, the judge “reasoned that although water entering through the door is not expressly excluded, the jury would be unable to separate the water that came in through the door (non-excluded cause) from water that came in through the walls and windows (excluded causes).”

3d DCA Opinion

On appeal, the 3d DCA noted that the water damage exclusionary endorsement contained ACC language, that is, language which excluded the loss “regardless of any other cause or event contributing concurrently or in any sequence to the loss. ”  Accordingly, the 3d DCA held that, “[w]hile there is no provision in the policy expressly excluding damage from water penetrating through the doors of the dwelling, the policy expressly excluded damage from water penetrating through the 'roof system or exterior walls or windows. ' ” Additionally, “because evidence of water entering through the exterior walls and windows was undisputed and is expressly excluded by the policy, the entire loss is excluded from coverage due to the anti-concurrent cause provision regardless of any other cause or event contributing concurrently or in any sequence to the loss.  Accordingly, the anti-concurrent cause provision, coupled with the undisputed evidence that the loss was caused by a combination of both excluded and covered perils, foreclosed the analysis of whether the jury could legally or factually separate the damage caused by water coming through the door from water coming through the walls and windows. ” [3] 

Analysis, Impact, and Effect

At first glance, it appears as though the ACC doctrine was overextended as it relates to different damages which occur during a claim.  While this may be somewhat true, this was in no small part by the arguments made by counsel and the lower court's reasons for granting directed verdict.  Based on a deeper review of the trial court docket and the appellate briefs, [4] it appears as though the biggest issue in the Czelusniak opinion is the inability for all involved to separate what it means to be a cause of loss versus an element of damage.

In Security First's initial brief, they cite to testimony of the insured's engineer who opined that wind caused an opening in the window allowing water to enter the property.  Conversely, they assert that their own engineer testified that water intruded through the windows and doors as a result of improper installation.  You may ask: “Why is this important?  None of this is even mentioned in the appellate opinion.”  Well, therein lies the problem. 

The water damage exclusionary endorsement is grossly underquoted in the Czelusniak opinion.  The full relevant text of the water damage exclusionary endorsement states that the policy excludes “[w]ater damage, meaning: [w] ater penetration through the roof system or exterior walls or windows, whether or not driven by wind, unless the water penetration is a direct result of damage caused by a Peril Insured Against other than water, and not otherwise excluded in this policy. ”

It must be noted that this is not an absolute exclusion; instead, it serves as pseudo-exclusionary limitation for ensuing water damage that is typically otherwise covered in a policy when it occurs as a result of things such as wear and tear, deterioration, faulty workmanship, etc.  The language in the endorsement provides that, if a covered peril causes damage to the property, any water which penetrates through the roof, windows, or walls would still be covered.  In this case, the insured's engineer testified that wind caused damage to the window which allowed water to enter.  Based on this testimony, there would be coverage for the ensuing water damages regardless of the language in the endorsement.  Of course, the insurer's expert proffered a different opinion and, as such, there remained facts at issue for the jury to consider.  This leads me to the conclusion that directed verdict was probably not appropriate in the first place. [5]

With all of this said, the analysis set forth by the 3d DCA seems misguided with regards to its application of the ACC doctrine in asserting that the that the location through which water entered was determined to be the cause of loss.  With this reasoning serving as the basis of the ACC analysis, it is no wonder that the result would be equally as confounding. 

Applying the ACC doctrine is not necessitated unless there is more than one cause of loss.  If there is a single, undisputable cause of loss, there can be no concurrent cause and, therefore, no need for any kind of ACC analysis.  When there is a question as to multiple causes of loss, one must first attempt to determine the Efficient Proximate Cause (hereinafter “EPC ”).  “The EPC provides that where there is 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. ” [6]  “When independent perils converge and no single cause can be considered the sole or proximate cause, it is appropriate to apply the concurring cause doctrine.” [7]  Only in this event can ACC language can be brought into the analysis.  In the event no EPC can be determined and there is no ACC language attached to an exclusion for any of the causes of loss, the loss is covered. [8]  Conversely, if there is ACC language with regards to an excluded cause of loss, coverage should be denied. [9] 

In Czelusniak, the 3d DCA performed no such analysis.  Instead, they, in following the trial court's reasoning, treated water intrusion through the doors as a separate and concurrent cause of loss to water intrusion through the roof, walls, or windows.  These are clearly not different causes of loss as much as they are different instances of ensuing damage.  A more thorough analysis would have considered whether the loss was caused by wind as asserted by the insured or improper installation as asserted by the carrier.  Then the question would be whether the ensuing damages were otherwise excluded under the policy.  In the case of Czelusniak, if the insurer was correct in that the water penetration was caused by improper installation, the water which entered through the roof, walls, or windows would be excluded as “the water penetration [was not] a direct result of damage caused by a Peril Insured Against. ” 

With that said, the water damage through the door is not limited or excluded by the water damage exclusionary endorsement and, as such, any damage stemming from such water should be covered.  The fact that the trial court reasoned that “the jury would be unable to separate the water that came in through the door (non-excluded cause) from water that came in through the walls and windows (excluded causes)” has nothing to do with the cause of loss; it only pertains to the damages sustained.  It seems as though the case should have been given to the jury with an instruction advising that, if the jurors found that the damage was the result of improper installation, the jurors should only consider damages sustained solely as a result of water coming through the door.  If the jurors were unable to separate the damages, the insured will have failed to rebut the carrier's established defenses thereby warranting a finding of no coverage.

The best example I can think of with regards to EPC and ACC would be a hurricane causing a flood.  A standard, “all-risk,” residential insurance policy that covers for damage caused by hurricane will also have an exclusion related to flood.  Most, if not all, of the time, the flood exclusion will be accompanied by ACC language.  That means if a hurricane causes a flood and both the flood and hurricane cause damage to the property, the damages caused by the flood would be excluded regardless of the covered hurricane which set all other events in motion.  As we have seen with some of the recent hurricanes that have affected Florida, there are many instances where a flood combines with wind to cause damage.  Often times, there is an observable “flood line” indicating the height of the flood waters.  This provides an exact demarcation where excluded damages end and covered damages begin allowing carriers to adjust accordingly.  Taking this into consideration, if we were to use the analysis set forth by the Czelusniak court, damages to the roof caused by the hurricane would be excluded simply because there exists ACC language somewhere else in the policy for a loss which also affected the property. 

It must be further noted that, even in situations where a hurricane causes wind and flood and such perils combine to cause damage, there still may be coverage even if flood damages subject to an ACC exclusionary provision contribute to the loss.  Florida's Valued Policy Law specifically notes that, "if the covered perils alone would have caused the total loss," an insurer still owes policy limits. [10]    It seems that public policy mandates an extrapolation from this sentiment that, when wind from a hurricane causes damage, and flood subsequently effects the insured property, coverage should be afforded as the flood did not contribute to the damage caused by the wind but rather manifested subsequent damage.  This allows for the argument that, because the damages caused by wind would have been present regardless of flooding, coverage must be afforded for such damages.  This is because the wind loss and flood loss are two separate and distinct causes of loss which do not likely occur concurrently but rather in an unconnected sequence.

​While we can hope insurers do not try to use this reasoning as the basis for denying or limiting coverage, it does not seem realistic to think they will refrain from at least trying.  Needless to say, with the right argument, courts should see right through it.  As always, should you have any questions about how this analysis may relate to your own claim,  please do not hesitate to contact us for a free consultation.​​

[1] Security First Ins. Co. v. Czelusniak, 45 Fla. L. Weekly D1151b, Case No. 3D19-589 (Fla. 3d DCA 2020).

[2] Id. at 3.

[3] Id. at 4-5.

[4] It must be noted that the appeal concerns many more issues which were wholly unaddressed by the 3d DCA including compliance with post-loss conditions and additional policy defenses.

[5] A directed verdict is a substantive ruling finding that “no verdict of any kind is necessary when the judge determines that there is no issue for a jury to try.”  Meus v. Eagle Family Disc. Stores, Inc., 499 So. 2d 840, 841 (Fla. 3d DCA 1986).  Specifically, the “directed verdict is a ruling that a reasonable-minded jury could not differ as to the existence of a material fact, that therefore no factual determination is required, and that judgment must be entered for the movant as a matter of law.”  Id.  “A trial court should grant a motion for directed verdict when the evidence, viewed in the light most favorable to the non-moving party, shows that a jury could not reasonably differ about the existence of a material fact and the movant is entitled to judgment as a matter of law.”  Meruelo v. Mark Andrew of Palm Beaches, Ltd., 12 So. 3d 247, 250 (Fla. 4th DCA 2009); see also Christensen v. Bowen, 140 So. 3d 498, 501 (Fla. 2014).A motion for directed verdict should be granted when there is no competent evidence to support any other verdict.  See De Mendoza v. Bd. Of Cnty. Comm'rs, 221 So. 2d 797, 798 (Fla. 3d DCA 1969).

[6] Sebo v. Am. Home Assurance Co., Inc., 208 So. 3d 694, 697 (Fla. 2016) citing Fire Ass'n of Phila. v. Evansville Brewing Ass'n, 73 Fla. 904, 75 So. 196 (1917). 

[7] Id.

[8] Jones v. Federated Nat. Ins. Co., 235 So. 3d 936, 941 (Fla. 4th DCA 2018).

[9] Id.

[10] Fla. Stat. § 627.702(1)(b)(2022).