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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.
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-
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
The court concluded that the ruptured
pipe and saturated soil caused earth move-
ment below the plaintiffs' property, and
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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