469_C409

CONCURRENT CAUSES AREN’T NULLIFIED BY CONSTRUCTION DEFECTS EXCLUSION

Homeowners	Concurrent Causation
Construction Defects	Manuscript

In April 2005, John Sebo bought a custom built home that was insured under a manuscript homeowner policy from American Home Assurance Company (AHAC). The policy had limits in excess of $8 million.

Beginning in May, 2005, substantial water leaks were reported to Sebo by his property manager. Leaks occurred throughout the home. Additional damage occurred after rains in August, 2005 and in October, 2005 from Hurricane Wilma.

AHAC received its first loss report from Sebo in December, 2005 and, in April, 2006, it denied all claims with the exception of $50,000 for mold damage. After the home was demolished in January, 2007, Sebo sued AHAC along with the home’s previous owners, the architect and the builder. A single lawsuit proceeded against AHAC after Sebo settled with the other parties. AHAC appealed after a jury found in favor of Sebo, based upon the basis of concurrent causation and AHAC appealed.

The appellate court ruled that the trial court erred on how it applied concurrent causation, reversing and remanding the lower court decision so it would be examined within the framework of the efficient proximate cause doctrine. Sebo appealed.

Upon appeal, the higher court discussed the applicability of both the concurrent causation and the efficient proximate cause doctrines. No trial documents or arguments disputed that the dwelling was damaged by several sources, including rain, wind, and construction defects. It dismissed the efficient proximate clause doctrine as, in its view, no single cause of loss had a primary effect. It also rejected the appellate court rationale that the existence of a single, eligible cause of loss among the occurrence of multiple causes, nullifies any exclusion.

The higher court did decide that the AHAC policy’s exclusion regarding construction defects and faulty design, while relevant, did not rule out coverage when other, eligible loss causes contributed to a loss. The appellate court decision was reversed and it was remanded back to the trial court for consideration based upon the higher court ruling.

John Robert Sebo, etc., Petitioner, v. American Home Assurance Company, Inc., Respondent. No. SC14-897, SUPCTFla. Filed December 1, 2016. Reversed and Remanded http://scholar.google.com/scholar_case?case=11361710106247533037&q=sebo+v.+american+home+assurance+co.+inc&hl=en&as_sdt=800006&as_vis=1 [downloaded December 14, 2016]