Rain-induced landslide found to be excluded under homeowners policy On Feb.13, 1998, following heavy rains, a slope failed above the West Hills, Calif., home of the insureds. The slope failure led to a landslide that caused a tree to crash into their house. They presented a claim for the resulting damage to their insurer.
The insureds had a standard homeowners policy. It excluded losses caused "directly or indirectly" by a number of cited perils. Such a loss was excluded "regardless of any other cause or event contributing concurrently or in any sequence to the loss." Among the perils cited were water damage and earth movement, including "landslide; mudflow; earth sinking, rising or shifting."
The policy also excluded losses for "weather conditions," but only if they contributed with other exclusions, like earth movement and water damage, to a loss.
An engineer the carrier retained to investigate the claim concluded that a landslide, triggered by heavy rainfall, caused the damage to the insureds' house. The carrier also acknowledged the possibility that third-party negligence may have played a part.
The carrier denied coverage for all but a minor part of the damage, pointing to policy exclusions for acts, errors or omissions in design and construction, earth movement, and weather conditions that "contribute in any way with" another excluded cause or event-in this case, a landslide-to produce a loss.
The insureds sued the carrier, contending that their loss had been caused by third-party negligence; weather conditions alone, "consisting of sustained rainfall"; or collapse not due to flood. They said their policy did not exclude any of these risks.
The carrier moved for summary judgment. In support of its motion, it supplied a declaration from its engineer stating that in his opinion the proximate cause of the damage was a landslide, brought on by heavy rainfall associated with El Nino. In opposing that motion, the insureds pointed to the engineer's opinion that rain had induced the landslide, and proffered a declaration from a geologist, whose opinion was that negligent lot design and construction-a risk the insureds claimed was not excluded under the policy-had "contributed to" their loss. The insureds offered no evidence that weather conditions had caused their loss in any way, apart from the rain's role in triggering the landslide that caused the tree to fall onto their home.
The trial court granted summary judgment to the carrier, and a Court of Appeal affirmed. The insureds appealed to the state Supreme Court.
The question before the Supreme Court was whether an insurer may deny coverage for a loss resulting from a rain-induced landslide. The court noted that it was undisputed that losses caused by weather conditions that do not "contribute in any way with" another excluded cause or event are covered under the policy.
Section 530 of the state insurance code provided that an insurer is liable for a loss that is proximately caused by an insured peril, even if an uncovered peril was a remote cause. An insurer is not liable for a loss, however, when a covered peril is only a remote cause.
The Supreme Court noted that the appeals court construed section 530 as incorporating the efficient proximate cause doctrine into California law. A previous state court case cited the doctrine thusly: "When a loss is caused by a combination of a covered and specifically excluded risks, the loss is covered if the covered risk was the efficient proximate cause of the loss, but "the loss is not covered if the covered risk was only a remote cause of the loss, or the excluded risk was the efficient proximate, or predominate cause."
In the case at hand, the Supreme Court ruled that the policy's weather conditions clause excluded the peril of rain inducing a landslide, and that the clause did not violate section 530 of the state insurance code or the efficient proximate cause doctrine. "Because the policy effectively excludes the perils of earth movement, third party negligence and rain inducing a landslide, and the (insureds) produced no evidence that a different peril was the efficient proximate cause of their loss, we agree with the Court of Appeals that the trial court did not err in granting (the insurer) summary judgment."
Julian vs. Hartford Underwriters Insurance Co., 110 P.3d 903, 27 Cal.Rptr.3d 648 (Cal. 05/05/2005) 110 P.3d 903, 27 Cal.Rptr.3d 648, 2005.CA.0004081 (www.versuslaw.com).
Readers can get in touch with Don Renau via e-mail at drenau@thepoint.com.
The insureds had a standard homeowners policy. It excluded losses caused "directly or indirectly" by a number of cited perils. Such a loss was excluded "regardless of any other cause or event contributing concurrently or in any sequence to the loss." Among the perils cited were water damage and earth movement, including "landslide; mudflow; earth sinking, rising or shifting."
The policy also excluded losses for "weather conditions," but only if they contributed with other exclusions, like earth movement and water damage, to a loss.
An engineer the carrier retained to investigate the claim concluded that a landslide, triggered by heavy rainfall, caused the damage to the insureds' house. The carrier also acknowledged the possibility that third-party negligence may have played a part.
The carrier denied coverage for all but a minor part of the damage, pointing to policy exclusions for acts, errors or omissions in design and construction, earth movement, and weather conditions that "contribute in any way with" another excluded cause or event-in this case, a landslide-to produce a loss.
The insureds sued the carrier, contending that their loss had been caused by third-party negligence; weather conditions alone, "consisting of sustained rainfall"; or collapse not due to flood. They said their policy did not exclude any of these risks.
The carrier moved for summary judgment. In support of its motion, it supplied a declaration from its engineer stating that in his opinion the proximate cause of the damage was a landslide, brought on by heavy rainfall associated with El Nino. In opposing that motion, the insureds pointed to the engineer's opinion that rain had induced the landslide, and proffered a declaration from a geologist, whose opinion was that negligent lot design and construction-a risk the insureds claimed was not excluded under the policy-had "contributed to" their loss. The insureds offered no evidence that weather conditions had caused their loss in any way, apart from the rain's role in triggering the landslide that caused the tree to fall onto their home.
The trial court granted summary judgment to the carrier, and a Court of Appeal affirmed. The insureds appealed to the state Supreme Court.
The question before the Supreme Court was whether an insurer may deny coverage for a loss resulting from a rain-induced landslide. The court noted that it was undisputed that losses caused by weather conditions that do not "contribute in any way with" another excluded cause or event are covered under the policy.
Section 530 of the state insurance code provided that an insurer is liable for a loss that is proximately caused by an insured peril, even if an uncovered peril was a remote cause. An insurer is not liable for a loss, however, when a covered peril is only a remote cause.
The Supreme Court noted that the appeals court construed section 530 as incorporating the efficient proximate cause doctrine into California law. A previous state court case cited the doctrine thusly: "When a loss is caused by a combination of a covered and specifically excluded risks, the loss is covered if the covered risk was the efficient proximate cause of the loss, but "the loss is not covered if the covered risk was only a remote cause of the loss, or the excluded risk was the efficient proximate, or predominate cause."
In the case at hand, the Supreme Court ruled that the policy's weather conditions clause excluded the peril of rain inducing a landslide, and that the clause did not violate section 530 of the state insurance code or the efficient proximate cause doctrine. "Because the policy effectively excludes the perils of earth movement, third party negligence and rain inducing a landslide, and the (insureds) produced no evidence that a different peril was the efficient proximate cause of their loss, we agree with the Court of Appeals that the trial court did not err in granting (the insurer) summary judgment."
Julian vs. Hartford Underwriters Insurance Co., 110 P.3d 903, 27 Cal.Rptr.3d 648 (Cal. 05/05/2005) 110 P.3d 903, 27 Cal.Rptr.3d 648, 2005.CA.0004081 (www.versuslaw.com).
Readers can get in touch with Don Renau via e-mail at drenau@thepoint.com.
