On Wednesday, September 2, 2015, the Supreme Court of Florida heard oral arguments in the case of Sebo v. American Home Assurance Company. The issue raised in Sebo is whether the Supreme Court should abolish the long-standing “concurrent cause doctrine” in all first party property insurance matters. The concurrent cause doctrine holds that when a property loss can be attributed to multiple independent causes, one or more of which is covered and one or more of which is excluded, the loss will be covered. The Supreme Court was considering the issue in Sebo because a lower appellate court rejected this well established doctrine in favor of a pro-insurer “efficient proximate cause doctrine.” The efficient proximate cause doctrine focuses instead on which peril was the most substantial or responsible factor in the loss and to exclude the loss if the most substantial factor falls within an exclusion.
Petitioner, John Sebo, appealed this lower appellate court ruling to the Supreme Court. The Florida Association of Public Insurance Adjusters (“FAPIA”), filed an amicus curiae brief with the Supreme Court in support of the policy holder. Berger Singerman partner Michael J. Higer, and attorney Colleen C. Maranges, drafted this amicus brief.
Arguments raised by the parties included the differences between prior cases involving multiple independent and dependent causes of damage, and which of those cases are precedent in Florida; whether the trial court preserved the underlying issue for appellate review; and whether one cause of damage must be more substantial than another cause of damage when multiple independent perils cause damage to an insured property. Notably, counsel for the Petitioner also argued that insurance companies can protect themselves from the concurrent cause doctrine by adding anti-concurrent cause language to their policies.
If the Supreme Court ultimately upholds the lower appellate court’s decision, it would potentially result in homeowner’s insurance policyholders being deprived of the full coverage upon which their insurance premiums were based and paid, in contravention of well-established Florida law requiring that insurance policies be construed in favor of finding coverage wherever a reasonable interpretation allows it. Moreover, adopting the efficient proximate cause standard would result in unnecessary and costly litigation because that standard is unpredictable and very subjective.
Although the Supreme Court of Florida will probably not issue its final decision for several months, we will continue to update our readers on any new developments once they arise.