Florida Adopts Concurrent Cause Doctrine for First Party Claims

No Difference Between First and Third Party Insurance in Florida

California invented the concurrent case doctrine in State Farm Mut. Auto. Ins. Co. v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123, 133 (1973). The doctrine made sense when it was applied to a third party claim but caused difficulties when it applied to a first party claim and was limited to third party claims when it became clear it did not work with first party claims.

Not all states agreed with both parts of the California decisions regarding cause. In John Robert Sebo v. American Home Assurance Company, Inc., Supreme Court of Florida,  No. SC14–897 (12/1/16) failed to understand the difference between the two types of policies and has adopted the concurrent cause doctrine for first party losses in Florida.


[John] Sebo purchased [a Naples, Florida] home in April 2005, when it was four years old. [American Home Assurance Company (AHAC) ] provided homeowners insurance as of the date of the purchase. The policy, which insured against “all risks,” was issued through a private client group and was referred to as a manuscript policy. It was not a standard form but instead was created specifically for the Sebo residence. The house and other permanent structures were insured for over $8,000,000. The policy also provided additional coverage for loss of use of the home.

Shortly after Sebo bought the residence, water began to intrude during rainstorms. Major water leaks were reported to Sebo’s property manager as early as May 31, 2005.  After an August rain, paint along the windows just fell off the wall. In October 2005, Hurricane Wilma struck Naples and further damaged the Sebo residence.

Sebo did not report the water intrusion and other damages to AHAC until December 30, 2005. AHAC investigated the claim, and in April 2006 it denied coverage for most of the claimed losses. The policy provided $50,000 in coverage for mold, and AHAC tendered that amount to Sebo but stated that “the balance of the damages to the house, including any window, door, and other repairs, is not covered.” In May 2008, Sebo renewed his claim and sent more information about the damages to AHAC, but AHAC again denied the claim except for the $50,000 in mold damages.

The residence could not be repaired and was eventually demolished. Sebo eventually amended his complaint in November 2009, adding AHAC as a defendant and seeking a declaration that the policy provided coverage for his damages. After Sebo settled his claims against a majority of all other defendants, the trial proceeded only on his declaratory action against AHAC. The jurors found in favor of Sebo, and the court eventually entered judgment against AHAC.

On appeal, the Second District found that “[t]here is no dispute in this case that there was more than one cause of the loss, including defective construction, rain, and wind.” The court reversed and remanded for a new trial, “in which the causation of Sebo’s loss is examined under the efficient proximate cause theory.”


The Florida Supreme Court was confronted with determining the appropriate theory of recovery to apply when two or more perils converge to cause a loss and at least one of the perils is excluded from an insurance policy. When addressing this question, courts have developed competing theories on how to determine coverage: the efficient proximate cause and concurring cause doctrines.


The EPC provides that where there is a concurrence of different perils, the efficient cause—the one that set the other in motion—is the cause to which the loss is attributable. Sabella v. Nat’l Union Fire Ins. Co., 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889, 892 (1963); Fire Ass’n of Phila. v. Evansville Brewing Ass’n, 73 Fla. 904, 75 So. 196 (1917).

The Supreme Court applied the EPC in Evansville Brewing, where the coverage at issue provided under an all-loss fire policy excluded loss caused by an explosion.

The EPC was explained by the California Supreme Court1 in Sabella, where it reasoned, “‘in determining whether a loss is within an exception in a policy, where there is a concurrence of different causes, the efficient cause—the one that sets others in motion—is the cause to which the loss is to be attributed, though the other causes may follow it, and operate more immediately in producing the disaster.’” The California Supreme Court thus reasoned that a covered peril that convenes with an uncovered peril may still provide for coverage under a policy when the covered peril triggered the events that eventually led to the loss.


The CCD provides that coverage may exist where an insured risk constitutes a concurrent cause of the loss even when it is not the prime or efficient cause. State Farm Mut. Auto. Ins. Co. v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123, 133 (1973).

The CCD originated with the California Supreme Court’s decision in Partridge, where the court was presented with “a somewhat novel question of insurance coverage: when two negligent acts of an insured—one auto—related and the other non-auto-related—constitute concurrent causes of an accident, is the insured covered under both his homeowner’s policy and his automobile liability policy, or is coverage limited to the automobile policy?”

The California Supreme Court found the efficient cause language of Sabella “to be of little assistance in cases where both causes of the harm are independent of each other.”

In recent years, some courts have misinterpreted and misapplied our decisions in Sabella  and Partridge. In so doing, they have allowed coverage in first party property damage cases under Partridge by inappropriately using the Partridge concurrent causation approach as an alternative to Sabella’s efficient proximate cause analysis. In Garvey v. State Farm Fire and Casualty Co., 48 Cal. 3d 395, 770 P.2d 704, 257 Cal. Rptr. 292 (Cal. 03/30/1989) the California Supreme Court explained the problem with applying the CCD to first party property claims. For some unknown reason the Supreme Court mentioned but did not follow or agree with Garvey.


After determining that there was “no dispute in this case that there was more than one cause of the loss, including defective construction, rain, and wind,” the Second District noted below that the parties had filed cross-motions for summary judgment, in which Sebo had asserted that AHAC was required to cover all losses under the concurrent cause doctrine.

Also not in dispute is that the rainwater and hurricane winds combined with the defective construction to cause the damage to Sebo’s property. As in Partridge, there is no reasonable way to distinguish the proximate cause of Sebo’s property loss—the rain and construction defects acted in concert to create the destruction of Sebo’s home. As such, it would not be feasible to apply the EPC doctrine because no efficient cause can be determined. Furthermore, we disagree with the Second District’s statement that the CCD nullifies all exclusionary language and note that AHAC explicitly wrote other sections of Sebo’s policy to avoid applying the CCD. Because AHAC did not explicitly avoid applying the CCD, we find that the plain language of the policy does not preclude recovery in this case.

Last, AHAC argues that the trial court erred by prohibiting the introduction of the amount of the settlements Sebo received in connection with this case. The Supreme Court wisely disagreed with the trial court’s determination that prior cases precluded AHAC from presenting the settlement amounts to offset the judgment. In fact, the right of subrogation allows the insurer, if obligated to pay for the property damage has the right to obtain from the tortfeasors with whom Sebo settled, the right of subrogation.

Nothing in the decision affects the ability of a trial court to consider the amount of settlements as a post-judgment offset. The Supreme Court, as a result, remanded the case to the trial for reconsideration of this issue.


The Supreme Court made an astounding statement concerning causation: “there is no reasonable way to distinguish the proximate cause of Sebo’s property loss.” That is the province of the jury, as finder of fact, not an appellate court.  If properly instructed the jury is capable of determining the efficient proximate cause of loss or each concurrent cause of loss – whether covered or not – to provide justice to all parties.

ZALMA-INS-CONSULT                      © 2016 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.

Mr. Zalma is the first recipient of theLEGEND-TROPHY-2 first annual Claims Magazine/ACE Legend Award.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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