CACI No. 2306. Covered and Excluded Risks - Predominant Cause of Loss

Judicial Council of California Civil Jury Instructions (2023 edition)

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2306.Covered and Excluded Risks - Predominant Cause of Loss
You have heard evidence that the claimed loss was caused by a
combination of covered and excluded risks under the insurance policy.
When a loss is caused by a combination of covered and excluded risks
under the policy, the loss is covered only if the most important or
predominant cause is a covered risk.
[[Name of defendant] claims that [name of plaintiff]’s loss is not covered
because the loss was caused by a risk excluded under the policy. To
succeed, [name of defendant] must prove that the most important or
predominant cause of the loss was [describe excluded peril or event],
which is a risk excluded under the policy.]
[or]
[[Name of plaintiff] claims that the loss was caused by a risk covered
under the policy. To succeed, [name of plaintiff] must prove that the most
important or predominant cause of the loss was [describe covered peril or
event], which is a risk covered under the policy.]
New September 2003
Directions for Use
The instructions in this series assume the plaintiff is the insured and the defendant is
the insurer. The party designations may be changed if appropriate to the facts of the
case.
This instruction in intended for use in first party property insurance cases where
there is evidence that a loss was caused by both covered and excluded perils. In
most cases the court will determine as a question of law what perils are covered and
excluded under the policy.
Depending on the type of insurance at issue, the court must select the bracketed
paragraph that presents the correct burden of proof. For all-risk homeowner’s
policies, for example, once the insured establishes basic coverage, the insurer bears
the burden of proving the loss was caused by an excluded peril. In contrast, for
“named perils” policies (for example, fire insurance) the insured bears the burden of
proving the loss was caused by the specified peril. (See Strubble v. United Services
Automobile Assn. (1973) 35 Cal.App.3d 498, 504 [110 Cal.Rptr. 828].)
Sources and Authority
• Remote Cause of Loss. Insurance Code section 530.
• Excluded Peril: But-For Causation. Insurance Code section 532.
• “[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
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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.”
(Sabella v. Wisler (1963) 59 Cal.2d 21, 31-32 [27 Cal.Rptr. 689, 377 P.2d 889],
internal quotation marks and citation omitted.)
• “Sabella defined ‘efficient proximate cause’ alternatively as the ‘one that sets
others in motion,’ and as ‘the predominating or moving efficient cause.’ We use
the term ‘efficient proximate cause’ (meaning predominating cause) when
referring to the Sabella analysis because we believe the phrase ‘moving cause’
can be misconstrued to deny coverage erroneously, particularly when it is
understood literally to mean the ‘triggering’ cause.” (Garvey v. State Farm Fire
& Casualty Co. (1989) 48 Cal.3d 395, 403 [257 Cal.Rptr. 292, 770 P.2d 704],
internal citations omitted.)
• “The efficient proximate cause referred to in Sabella has also been called the
predominant cause or the most important cause of the loss. ‘By focusing the
causal inquiry on the most important cause of a loss, the efficient proximate
cause doctrine creates a “workable rule of coverage that provides a fair result
within the reasonable expectations of both the insured and the insurer.” ’ ”
(Vardanyan v. AMCO Ins. Co. (2015) 243 Cal.App.4th 779, 787 [197 Cal.Rptr.3d
195], internal citation omitted.)
• “[T]he ‘cause’ of loss in the context of a property insurance contract is totally
different from that in a liability policy. This distinction is critical to the
resolution of losses involving multiple causes. Frequently property losses occur
which involve more than one peril that might be considered legally
significant. . . . ‘The task becomes one of identifying the most important cause
of the loss and attributing the loss to that cause.’ [¶] On the other hand, the right
to coverage in the third party liability insurance context draws on traditional tort
concepts of fault, proximate cause and duty.” (Garvey, supra, 48 Cal.3d at pp.
406-407, internal quotation marks, italics, and citations omitted.)
• “[I]n an action upon an all-risks policy (unlike a specific peril policy), the
insured does not have to prove that the peril proximately causing his loss was
covered by the policy. This is because the policy covers all risks save for those
risks specifically excluded by the policy. The insurer, though, since it is denying
liability upon the policy, must prove the policy’s noncoverage of the insured’s
loss - that is, that the insured’s loss was proximately caused by a peril
specifically excluded from the coverage of the policy.” (Vardanyan, supra, 243
Cal.App.4th at pp. 796−797, original italics.)
• “A policy cannot extend coverage for a specified peril, then exclude coverage for
a loss caused by a combination of the covered peril and an excluded peril,
without regard to whether the covered peril was the predominant or efficient
proximate cause of the loss. Other Coverage 9 identifies the perils that are
covered when the loss involves collapse. If any other peril contributes to the
loss, whether the loss is covered or excluded depends upon which peril is the
predominant cause of the loss. To the extent the term ‘caused only by one or
more’ of the listed perils can be construed to mean the contribution of any
CACI No. 2306 INSURANCE LITIGATION
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unlisted peril, in any way and to any degree, would result in the loss being
excluded from coverage, the provision is an unenforceable attempt to contract
around the efficient proximate cause doctrine. Accordingly, CACI No. 2306
. . . was the correct instruction to give to the jury.” Vardanyan, supra, 243
Cal.App.4th at p. 796.)
• “[T]he scope of coverage under an all-risk homeowner’s policy includes all risks
except those specifically excluded by the policy. When a loss is caused by a
combination of a covered and specifically excluded risks, the loss is covered if
the covered risk was the efficient proximate cause of the loss. . . . [T]he
question of what caused the loss is generally a question of fact, and the loss is
not covered if the covered risk was only a remote cause of the loss, or the
excluded risk was the efficient proximate, or predominate, cause.” (State Farm
Fire & Casualty Co. v. Von Der Lieth (1991) 54 Cal.3d 1123, 1131-1132 [2
Cal.Rptr.2d 183, 820 P.2d 285], internal citation omitted.)
• “[A]n insurer is not absolutely prohibited from drafting and enforcing policy
provisions that provide or leave intact coverage for some, but not all,
manifestations of a particular peril. This is, in fact, an everyday practice that
normally raises no questions regarding section 530 or the efficient proximate
cause doctrine.” (Julian v. Hartford Underwriters Ins. Co. (2005) 35 Cal.4th 747,
759 [27 Cal.Rptr.3d 648, 110 P.3d 903].)
Secondary Sources
Croskey et al., California Practice Guide: Insurance Litigation, Ch. 6A-E, First
Party Coverages - Causation Principles, ¶¶ 6:134-6:143, 6:253 (The Rutter Group)
1 California Liability Insurance Practice: Claims & Litigation (Cont.Ed.Bar)
Analyzing Coverage: Reading and Interpreting Insurance Policies, § 3.42
3 California Insurance Law & Practice, Ch. 9, Homeowners and Related Policies,
§ 36.42 (Matthew Bender)
26 California Forms of Pleading and Practice, Ch. 308, Insurance, § 308.113
(Matthew Bender)
12 California Points and Authorities, Ch. 120, Insurance, § 120.50 (Matthew
Bender)
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