The court applied the efficient proximate cause doctrine to find coverage under a property policy for a building's collapse. Vardanyan v. Amco Ins. Co., 2015 Cal. App. LEXIS 1181 (Cal. Ct. App. Dec. 11, 2015). The insured submitted a claim to Amco for damage to the flooring of the house and for mold. Amco's adjustor reported that the house seemed to be settling, possibly due to a water leak. A structural engineer then inspected and found multiple potential leaks in the roof, gutters in disrepair, downspouts that deposited water at the base of the walls of the house, and evidence that a faucet had been spraying the wall in one area. Water damage was noticed in these areas. Further, the kitchen was water damaged and had past termite infestation. Amco denied coverage based upon multiple exclusions, including exclusions for damage caused by seepage and faulty or defective design. The insured sued, alleging that the house collapsed and that the policy provided coverage for collapse. The policy stated there was coverage for collapse of a building or any part of a building "caused only by one or more" of a list of perils, including hidden decay and hidden insect damage. The evidence at trial indicated there were multiple causes of the damage to the insured's house. The insured argued that there was coverage for collapse because hidden decay or hidden insect damage were the predominant causes of the collapse. The insured requested a standard jury instruction explaining that, when a loss is caused by a combination of covered and excluded risks, the loss is covered if the most important or predominant cause is a covered risk. Amco requested a jury instruction placing on the insured the burden of proving the collapse of the house was "caused only by one or more" of the perils listed in the collapse section of the policy. The court indicated it would give Amco's proposed instruction. The insured felt this was tantamount to directing a verdict in favor of Amco because there was no dispute that the damage to the house was caused by perils in addition to those listed in the collapse provisions. Amco then moved for a directed verdict, which the court granted. On appeal, the insured argued that the language "caused only be one or more of the following" in the collapse section of the policy meant that this was a complete list of the perils causing collapse that were covered under the policy. If any one or any combination of the listed perils caused the collapse, the loss was covered. If some unlisted peril contributed to the collapse, the efficient proximate cause doctrine required that the jury determine which cause was the predominant or most important. If the predominant cause was a peril listed in the collapse section, then the loss by collapse would be covered. Amco contended the use of the word "only" meant that a collapse was a covered loss only if no peril other than those listed contributed to the collapse. Amco argued the efficient proximate cause doctrine did not apply to such a provision. The court sided with the insured. Amco's construction would exclude coverage any time a peril not listed in the collapse section contributed to the loss, even minimally. A reasonable insured would not anticipate that a listed, covered peril, if combined with some completely unrelated, unspecified peril, would result in an exclusion of coverage. The insured's interpretation, on the other hand, was consistent with the efficient proximate cause doctrine. The insured also contended that Amco's proposed jury instruction was improper because it placed on the insured the burden of proving his loss fell within the provision of the collapse section, instead of requiring Amco to prove that the loss was excluded. The court agreed with the insured here as well. In an all-risk policy, such as the policy at issue, the insured did not have to prove that the peril proximately causing the loss was covered by the policy. This was because the policy covered all risks except for those risks specifically excluded. The insurer, since it was denying liability upon the policy, had to prove the policy's noncoverage of the insured's loss, i.e., that the insured's loss was proximately caused by a peril specifically excluded from coverage.
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