Anticoncurrent Causation Coverage Dispute
April 18, 2016
The insureds brought an action against the insurer to recover for damage to an in-ground swimming pool that floated out of the ground due to heavy rains and the failure of the pressure-relief valve. This case is Bozek v. Erie Insurance Group, 2015 IL App 2d 150155.
Following a rainstorm, the Bozeks incurred damage to their in-ground swimming pool. The pool had been emptied to clean debris making it susceptible to uplift, and indeed, that is what happened. The pool lifted up because the ground water pressure pushed the pool upward, and the pool was damaged to the point that it had to be replaced in its entirety. The heaving of the pool also damaged the concrete slab around the pool.
The Bozeks had a homeowners policy with Erie Insurance Group that provided $89,000 in coverage for damage to the pool. However, when the Bozaks presented a claim to the insurer, Erie denied coverage based on the anticoncurrent causation clause contained in the policy. The insureds filed a complaint for a declaratory judgment, alleging that Erie improperly denied coverage. In the Bozeks' view, the anticoncurrent causation clause dictated that, because a failure of the pressure-relief valve in this instance (a covered event), preceded the increase in hydrostatic pressure (an excluded event), the loss was covered.
The circuit court granted summary judgment to Erie Insurance and this appeal followed.
The Appellate Court of Illinois, Second District, noted that the Bozeks raised two issue: whether the failure of the pressure-relief valve is a covered cause; and whether the anticoncurrent causation clause precludes coverage. The Bozeks argued that, because Erie did not meet its burden to show that the failure of the pressure-relief valve was an excluded mechanical breakdown, it must be considered a covered event. Thus, they said that because this covered event happened first, the anticoncurrent causation clause does not apply. The court responded that, even if the failure of the pressure-relief valve is a covered cause of loss, the anticoncurrent causation clause precludes coverage as a matter of law, so that is the only issue the court would address.
In its opinion, the court started by discussing the origin of the anticoncurrent causation clause. The court found that the purpose of the anticoncurrent causation clause is to avoid application of the general rule that there is coverage so long as the efficient or dominant cause is covered. When the anticoncurrent causation clause can be applied to the facts of the underlying claim, there is no coverage if even one contributing cause of loss is an excluded event. When two perils converge at the same point in time, the court continued, contemporaneously and operating in conjunction, there is a concurrent cause or event and the anticoncurrent causation clause in the Erie policy is consistent with this proposition of law.
The court looked to the point in time that the cause contributed to the loss, not the point in time that the cause came into existence. Here, the court did not look at the point in time when the valve failed, it looked at the point in time that the failed valve contributed to the loss, and the failed valve and the hydrostatic pressure contributed concurrently to the loss. The covered event here did not lead to a separate or different loss. Indeed, without a separate loss, the Bozeks' interpretation of the anticoncurrent causation clause would lead to an untenable result. The failed pressure valve did not cause any loss until it converged with the excluded event. Put another way, said the court, prior to the excluded event, there was no loss for which coverage could conceivably vest. Neither the uplifted pool nor the damage concrete occurred until the hydrostatic pressure acted upon the sides of the pool. The two causes contributed concurrently to this loss and so, the anticoncurrent causation clause plainly precludes coverage.
The ruling of the circuit court was affirmed.
Editor's Note: The Appellate Court of Illinois, Second District, holds as a matter of first impression that anticoncurrent causation clause bars coverage for a claim for damage to an in-ground swimming pool that floated out of the ground due to heavy rains and the failure of a pressure-relief valve. In its decision, the court reviewed the origin of anticoncurrent causation clauses and discussed the four basic stops on the causal spectrum of insurance coverage.