John Robert Sebo v. American Home Assurance Company, Inc.
41 Fla. L. Weekly Supp. 582, 2016 Fla. LEXIS 2596, 208 So. 3d 694 (2016)
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Rule of Law:
Under a first-party, all-risk insurance policy, the concurrent cause doctrine applies when two or more independent perils converge to cause a single, indivisible loss, and at least one peril is covered and one is excluded. Coverage will be found unless the policy contains specific anti-concurrent causation language.
Facts:
- In April 2005, John Sebo purchased a home in Naples, Florida.
- American Home Assurance Company (AHAC) issued an 'all-risks' homeowners insurance policy for the residence.
- Shortly after the purchase, the home suffered from major water intrusion during rainstorms due to significant design and construction defects.
- In October 2005, Hurricane Wilma struck the area, causing additional damage to the home.
- The policy contained an exclusion for loss caused by 'faulty, inadequate or defective' planning, design, or construction.
- The combined and indivisible damage from the defective construction, rainwater, and hurricane winds was so severe that the residence could not be repaired.
- The house was ultimately demolished.
Procedural Posture:
- John Sebo filed suit in a Florida trial court against the sellers, architect, and builder of his home.
- Sebo later amended his complaint to add his insurer, American Home Assurance Company (AHAC), as a defendant, seeking a declaratory judgment that his policy covered the damages.
- After Sebo settled with the other defendants, the trial proceeded solely on the action against AHAC.
- A jury found in favor of Sebo, and the trial court entered a final judgment against AHAC.
- AHAC, as appellant, appealed to the Florida Second District Court of Appeal.
- The Second District Court of Appeal reversed, holding that the 'efficient proximate cause' theory should apply and remanded for a new trial.
- Sebo, as petitioner, sought review from the Supreme Court of Florida, arguing the Second District's decision conflicted with another appellate court's decision in Wallach v. Rosenberg.
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Issue:
In a first-party all-risk insurance policy dispute, does the concurrent cause doctrine apply to determine coverage when multiple independent perils, at least one covered and one excluded, combine to cause a loss?
Opinions:
Majority - Perry, J.
Yes. The concurrent cause doctrine applies when independent perils converge to cause a loss and no single cause can be identified as the sole or proximate cause. The court reasoned that the Efficient Proximate Cause (EPC) doctrine, which applies to a sequential chain of events where one peril sets another in motion, is not feasible here. In this case, the rainwater and hurricane winds (covered perils) acted in concert with the defective construction (an excluded peril) to create a single, indivisible loss. Citing with approval the precedent set in Wallach v. Rosenberg, the court held it is logical and reasonable to find coverage under an all-risk policy in such circumstances. Furthermore, the court noted that AHAC could have included specific anti-concurrent causation language in the policy to avoid this outcome but failed to do so, and ambiguous exclusionary clauses must be construed against the insurer.
Dissenting - Polston, J.
The court should not decide the issue. The dissent argues that the merits of whether to apply the concurrent cause doctrine versus the efficient proximate cause doctrine should not have been reached. This specific legal argument was not properly raised or preserved by the parties at the trial court level or in their briefs to the intermediate appellate court. Because the argument was waived, the Second District Court of Appeal erred by deciding it, and the Supreme Court should likewise refrain from ruling on its merits. The case should be remanded for the Second District to consider only the issues that were properly raised on appeal.
Analysis:
This decision officially establishes the Concurrent Cause Doctrine (CCD) as the default standard in Florida for first-party property insurance claims involving multiple, independent causes of loss. It resolves a conflict among Florida's appellate districts and provides greater protection for policyholders, as an insurer cannot deny an entire claim just because an excluded peril was one of the contributing causes. The ruling places the burden on insurers to draft explicit 'anti-concurrent causation' language if they wish to exclude coverage for losses resulting from a combination of covered and excluded perils. This case significantly impacts how insurance policies are written and litigated in Florida when multiple factors contribute to property damage.
