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65 Def. Counsel J. 400 (1998)
Efficient Proximate Causation in the Context of Property Insurance Claims

handle is hein.journals/defcon65 and id is 402 raw text is: Efficient Proximate Causation in the Context of Property Insurance Claims Far from being a novelty, this principle of determining causation in property loss cases is used in most jurisdictions By Mark D. Wuerfel and Mark Koop AMONG the issues that most commonly arise in the evaluation of property insur- ance claims and the defense of insurers' non-coverage decisions is the effect of a combination of two recognized causes of the loss. One cause of loss usually is a peril excluded by the policy, while the other is either an enumerated peril or more com- monly today a peril falling within the all risk coverage of all risks of direct physi- cal loss. Defense counsel sometimes find it sug- gested, even by courts, that the resolution of the question of coverage of such a loss requires resort to a relatively novel doc- trine of efficient proximate causation. They also may find it suggested that this analysis was devised by California courts and that some more traditional analysis would result in a fairer interpretation of property insurance policies. ORIGIN OF THE RULE In fact, the efficient proximate cause rule is the all but universal method used in the United States for resolving coverage issues involving the concurrence of covered and excluded perils. The defense bar should not overlook a long train of case law applying this rule to the facts of claims, even when the policies themselves may have been drafted in terms significantly different from those employed today. Schroeder v. State Farm Fire and Casu- alty Co.' illustrates the typical misappre- hension as to the source of the efficient 1. 770 F.Supp. 558 (D. Nev. 1991). IADC member Mark D. Wuerfel is a founding partner of Kinder, Wuerfel & Cholakian in San Francisco. He was graduated from the University of Califor- nia Hastings College of the Law in 1976. He concentrates in litigation involving insureds in selected areas of insurance de- fense. Mark Koop is special counsel at the same firm. He received his B.A. in classics from Reed College, his M.A. from the Uni- versity of Washington, and his J.D. in 1985from the University of California at Los Angeles proximate cause rule. There the U.S. Dis- trict Court for the District of Nevada con- sidered an insurance coverage dispute in which a city water service pipe ruptured from age, rust and corrosion, causing the soil under the insured's building to become saturated and settled, which resulted in damage to the building. The policy (appar- ently an all-risk policy) excluded coverage of damage caused by earth movement, but the insureds argued that the true cause of the damage was water, a non-excluded peril. The court concluded that the ruptured pipe and saturated soil caused earth move- ment below the plaintiffs' property, and added: Plaintiffs argue that the efficient proxi- mate cause doctrine allows them to recover in this case. That doctrine, developed in Cali- fornia, provides that when a loss is sustained by a sequence or concurrence of at least two causes, one covered under the policy and the other excluded under the policy, the cause setting the chain of events in motion is the cause to which the loss is attributed. Thus, if

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