Title: Julian v. Hartford Underwriters

State: california

Issuer: California Supreme Court

Document:

1
Filed 5/5/05; reposted to correct file date; no change to opn. text 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
FRANK JULIAN et al., 
) 
 
 
) 
 
Plaintiffs and Appellants, 
) 
 
 
) 
S109735 
 
v. 
) 
 
 
) 
Ct.App. 2/7  B149088 
HARTFORD UNDERWRITERS  
) 
INSURANCE COMPANY, 
) 
Los Angeles County 
 
) 
Super. Ct. No. LC047845 
 
Defendant and Respondent. 
) 
 
___________________________________ ) 
 
California Insurance Code section 5301 provides that “[a]n insurer is liable 
for a loss of which a peril insured against was the proximate cause, although a 
peril not contemplated by the contract may have been a remote cause of the loss; 
but he is not liable for a loss of which the peril insured against was only a remote 
cause.”  We have construed section 530 as incorporating into California law the 
efficient proximate cause doctrine, an interpretive rule for first party insurance.  
(Sabella v. Wisler (1963) 59 Cal.2d 21, 31-33 (Sabella).)  Pursuant to the efficient 
proximate cause doctrine, “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,” but “the loss is not covered if the covered 
risk was only a remote cause of the loss, or the excluded risk was the efficient 
                                              
1  
All subsequent statutory references are to the Insurance Code unless 
otherwise indicated. 
 
2
proximate, or predominate cause.”  (State Farm Fire & Casualty Co. v. Von Der 
Leith (1991) 54 Cal.3d 1123, 1131-1132.)   
 
This case calls on us to decide whether an insurer may, consistent with 
section 530 and the efficient proximate cause doctrine, deny coverage for a loss 
resulting from a rain-induced landslide by invoking, among other exclusions 
within a form policy, a provision that excludes coverage for losses caused by 
weather conditions that “contribute in any way with” an excluded cause or event 
such as a landslide.  It is undisputed that losses proximately caused by weather 
conditions that do not “contribute in any way with” another excluded cause or 
event are covered under the policy.   
Plaintiffs contend that section 530 and the efficient proximate cause 
doctrine prohibit their insurer from invoking this exclusion where the weather 
condition of rain causes a landslide.  We reject this argument as an improper 
conflation of the covered peril of weather conditions alone with the distinct, 
excluded peril of a weather condition (rain) that induces a landslide, and hold that 
the insurer may, consistent with section 530 and the efficient proximate cause 
doctrine, rely on the exclusion to deny coverage for losses proximately caused by 
the latter peril.  Accordingly, we affirm the judgment in favor of the insurer.  
FACTUAL AND PROCEDURAL BACKGROUND 
 
On February 13, 1998, following heavy rains, a slope failed above the West 
Hills, California home of Frank and Carole Julian.  The slope failure led to a 
landslide.  This landslide caused a tree to crash into the Julians’ house.  Soon 
thereafter, the Julians presented a claim for the resulting damage to their insurer, 
Hartford Underwriters Insurance Company (Hartford).  The Julians had a standard 
 
3
form homeowners insurance policy with Hartford.  This “open peril” policy2 
provided in relevant part, “We [Hartford] insure against risks of direct physical 
loss to property described in Coverage A [dwelling] and B [other structures] 
unless the loss is: [¶] 1. excluded under Section I – Exclusions; or [¶] 2. caused 
by” one of several specifically named perils.  The policy also stated, “any ensuing 
loss to property . . . not excluded or excepted in this policy is covered.”  The 
exclusions relevant to this appeal provided as follows:  
 “SECTION I – EXCLUSIONS 
 
“1. 
We do not insure against loss caused directly or indirectly by any of 
the following.  Such loss is excluded regardless of any other cause or event 
contributing concurrently or in any sequence to the loss: . . . . 
 
“b.  Earth Movement, meaning earthquake including land shock 
waves or tremors before, during or after a volcanic eruption; landslide; mudflow; 
earth sinking, rising or shifting . . . .  
 
“c.  Water Damage . . . . 
 
“2. 
We do not insure against loss to property described in Coverages A 
and B caused by any of the following.  However, any ensuing loss to property 
described in Coverages A and B not excluded or excepted in this policy is 
covered. 
 
“a.  
Weather conditions.  However, this exclusion only applies if 
weather conditions contribute in any way with a cause or event excluded in 
paragraph 1. above to produce the loss . . . .” 
                                              
2  
An “open peril” policy is analogous to an “all risk” policy, in that it 
provides coverage for all losses not expressly excluded by the policy.  (See Garvey 
v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 406 (Garvey); Abraham, 
Peril and Fortuity in Property and Liability Insurance (2001) 36 Tort Ins. L.J. 
777, 783-784.)   
 
4
 
We will refer to the last clause excerpted above as the “weather conditions 
clause.”  Other provisions within the Julians’ policy and its amendatory 
endorsement excluded coverage for losses caused by, among other perils, certain 
types of freezing, wear and tear, neglect, and acts, errors or omissions in design or 
construction. 
 
Hartford investigated the Julians’ claim.  An engineer retained by Hartford 
concluded that a landslide, triggered by heavy rainfall, brought about the damage 
to the Julians’ house.  The engineer surmised that “[w]ater is always the catalyst 
that causes these types of [slope] failures.”  Hartford also allowed for the 
possibility that third party negligence may have played a part in the Julians’ loss.  
Hartford denied coverage for all but a minor part of the damage suffered by the 
Julians, pointing to the exclusions in the Julians’ policy for acts, errors or 
omissions in design and construction, earth movement, and weather conditions 
that “contribute in any way with” another excluded cause or event, in this case a 
landslide, to produce a loss.  Regarding the weather conditions clause, the letter 
Hartford sent to the Julians advising them that coverage had been denied stated, 
“If it were determined that the damage to your house was caused mainly by 
prolonged heavy rains – that is, the ‘cumulative effect of the recent storms’ cited 
in the engineer’s report – the ‘weather conditions’ exclusion would apply . . . .”   
 
The Julians brought suit against Hartford, charging the insurer with breach 
of contract, breach of the covenant of good faith and fair dealing, and intentional 
infliction of emotional distress.  The Julians alleged that the efficient proximate 
cause of their loss had been third party negligence, weather conditions alone 
“consisting of sustained rainfall,” or collapse not due to flood, and that the policy 
did not effectively exclude any of these risks.  Hartford subsequently moved for 
summary judgment on the ground that the Julians’ policy excluded each of the 
perils that Hartford identified as the possible efficient proximate causes of the loss 
 
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– earth movement, third party negligence, and weather conditions that “contribute 
in any way with” another excluded cause or event, in this case a landslide.  In 
support of its motion for summary judgment, Hartford supplied a declaration from 
its engineer opining that “the proximate cause of the damage to the Julians’ 
residence and property was a landslide, brought on by heavy rainfall associated 
with El Nino [sic] conditions.  The total water necessary for the failure to occur 
was a result of the cumulative effects of the storms generated by El Nino [sic].”  In 
opposing Hartford’s motion, the Julians pointed to the engineer’s opinion that rain 
had induced the landslide, and proffered a declaration from a geologist who 
opined that negligent lot design and construction, a risk that the Julians claimed 
was not properly excluded under the policy, had “contributed to” the Julians’ loss.  
The Julians offered no evidence that weather conditions had caused their loss in 
any way apart from rain’s role in triggering the landslide that caused the tree to 
fall onto their home.   
 
The trial court agreed with Hartford that the policy excluded each of the 
possible efficient proximate causes of the loss, and granted Hartford summary 
judgment.  Upon the Julians’ appeal, the Court of Appeal affirmed.  In addition to 
rejecting the Julians’ argument that the policy did not properly exclude the peril of 
third party negligence, an issue we do not address, the Court of Appeal determined 
that the weather conditions clause did not violate section 530 or the efficient 
proximate cause doctrine because, in the Court of Appeal’s view, the clause 
plainly excluded weather conditions, and the limited grant of coverage for losses 
caused by weather conditions that did not “contribute in any way with” another 
excluded cause or event did not render the clause invalid or turn it into a coverage 
provision for all losses caused by weather conditions.  In so holding, the Court of 
Appeal parted ways with another division of the same appellate district, which a 
year earlier in Palub v. Hartford Underwriters Ins. Co. (2001) 92 Cal.App.4th 
 
6
645, 648 (Palub)3 had determined that the weather conditions clause violated 
section 530 and the efficient proximate cause doctrine.  We granted review to 
resolve this dispute over the validity of the weather conditions clause. 
DISCUSSION 
 
The efficient proximate cause doctrine “is neither a California invention nor 
novel.”  (Wuerfel & Koop, “Efficient Proximate Causation” in the Context of 
Property Insurance Claims (1998) 65 Def. Couns. J. 400, 401.)  In Sabella, supra, 
59 Cal.2d 21, we held that section 530 incorporated the doctrine into California 
law as the preferred method for resolving first party insurance disputes involving 
losses caused by multiple risks or perils, at least one of which is covered by 
insurance and one of which is not.  (59 Cal.2d at pp. 31-33.)  The plaintiffs in 
Sabella had procured an “all-risk” homeowners policy endorsement that excluded 
coverage for loss by settling, cracking, or shrinkage of the foundation.  (Id. at 
p. 26.)  A sewer pipe located above inadequately compacted fill material broke 
and leaked, causing the plaintiffs’ house to settle unevenly and the foundation and 
walls to crack.  (Ibid.)  The insurer claimed that the exclusion for settling applied 
to defeat coverage.  (Id. at p. 31.)  Reversing a judgment in favor of the insurer, we 
accepted the rule that “ ‘[i]n determining whether a loss is within an exception in a 
policy, where there is a concurrence of different causes, the efficient cause . . . is 
the cause to which the loss is to be attributed . . . .’ ”  (Sabella, supra, 59 Cal.2d at 
p. 31.)   
                                              
3  
The Julians have requested that we take judicial notice of a November 2001 
letter submitted to this court by the Attorney General on behalf of the Department 
of Insurance in connection with the Palub proceedings.  We grant this request to 
notice material found in court files.  (Evid. Code, § 452, subd. (d).) 
 
7
 
In Garvey, supra, 48 Cal.3d 395, we explained that in adopting this 
principle Sabella “impliedly recognized that coverage would not exist if the 
covered risk was simply a remote cause of the loss, or if an excluded risk was the 
efficient proximate (meaning predominant) cause of the loss.  On the other hand, 
the fact that an excluded risk contributed to the loss would not preclude coverage 
if such a risk was a remote cause of the loss.”  (Id. at pp. 402-403.)  Garvey 
clarified that the “efficient proximate cause” of a loss is the predominant, or most 
important cause of a loss.  (Id. at p. 403.)  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.”  (Id. at p. 404.)   
 
Policy exclusions are unenforceable to the extent that they conflict with 
section 530 and the efficient proximate cause doctrine.  (See Civ. Code, § 1667, 
subd. (2); Howell v. State Farm Fire & Casualty Co. (1990) 218 Cal.App.3d 1446, 
1452, 1454 (Howell); Gillis v. Sun Ins. Office, Ltd. (1965) 238 Cal.App.2d 408, 
423; Sauer v. General Ins. Co. (1964) 225 Cal.App.2d 275, 279-280.)  In Garvey, 
supra, 48 Cal.3d 395, we reaffirmed that an insurer may not preclude application 
of efficient proximate cause analysis through inconsistent policy language.  
Garvey addressed an all-risk homeowners insurance policy that purported to 
exclude losses “ ‘caused by, resulting from, contributed to or aggravated by any 
earth movement . . . .’ ”  (Id. at p. 399.)  Application of this language would have 
defeated coverage if earth movement made even a minor contribution to a loss.  
An addition to the house owned by the Garvey plaintiffs pulled away from the 
main structure.  (Id. at p. 400.)  Pointing to the earth movement exclusion, the 
insurer denied coverage for the loss.  (Ibid.)  The plaintiffs countered that the 
efficient proximate cause was third party negligence, implicitly a covered peril 
because it was not specifically excluded in their all-risk policy.  (Ibid.)  After 
 
8
addressing the inapplicability of certain third party insurance principles to the first 
party insurance context and the resulting need to remand the action for further 
proceedings (id. at pp. 410-412), Garvey held that notwithstanding the insurer’s 
attempt to defeat coverage whenever earth movement played any part in a loss, on 
remand application of efficient proximate cause analysis would determine 
whether the policy provided coverage for the loss (id. at pp. 412-413).  Garvey 
stated, “If the earth movement was the efficient proximate cause of the loss, then 
coverage would be denied under Sabella [citation].  On the other hand, if 
negligence was the efficient proximate cause of the loss, then coverage exists 
under Sabella.”  (Ibid.)  We would not have given these instructions, which 
referred exclusively to the possible efficient proximate causes of the loss, had we 
deferred to the insurer’s attempt to exclude losses that may have been caused 
efficiently by negligence, but which were contributed to or aggravated by earth 
movement.  
 
Howell, supra, 218 Cal.App.3d 1446, also rejected an insurer’s attempt to 
contract around the efficient proximate cause doctrine.  In Howell, as here, the 
plaintiff suffered property damage following a landslide and sought to recover 
under her “all-risk” homeowners insurance policy.  (Id. at p. 1449.)  The landslide 
came after heavy rains had weakened a slope already denuded by fire.  (Ibid.)  
The policy provided, “ ‘We do not insure under any coverage for loss (including 
collapse of an insured building or part of a building) which would not have 
occurred in the absence of one or more of the following excluded events.  We do 
not insure for such loss regardless of:  a) the cause of the excluded event; or b) 
other causes of the loss; or c) whether other causes acted concurrently or in any 
sequence with the excluded event to produce the loss . . . .’  The policy then listed 
‘Earth Movement’ and ‘Water Damage’ as specific perils excluded under this 
section.”  (Id. at pp. 1449-1450.)  Relying on this language, the insurer moved for 
 
9
and received summary judgment (id. at p. 1451) even though the plaintiff 
presented a declaration from a geotechnical expert attesting that if the fire had not 
occurred, the slope probably would not have failed (id. at p. 1459).  
 
The Court of Appeal reversed.  (Howell, supra, 218 Cal.App.3d at p. 1461.)  
The majority opinion framed and resolved the issue as follows:  “Stated simply, 
the important question presented by this case is whether a property insurer may 
contractually exclude coverage when a covered peril is the efficient proximate 
cause of the loss, but an excluded peril has contributed to or was necessary to the 
loss.  We conclude that a property insurer may not limit its liability in this manner, 
since the statutory and judicial law of this state make the insurer liable whenever a 
covered peril is the ‘efficient proximate cause’ of the loss, regardless of other 
contributing causes.  Consequently, the policy exclusions at issue in this case are 
not enforceable to the extent they conflict with California law.”  (Id. at p. 1452 
(maj. opn. of White, P.J.), fn. omitted.)  Howell reasoned that “if we were to give 
full effect to the . . . policy language excluding coverage whenever an excluded 
peril is a contributing or aggravating factor in the loss, we would be giving 
insurance companies carte blanche to deny coverage in nearly all cases. . . . [¶] . . . 
Since, in most instances, an insurer can point to some arguably excluded 
contributing factor, this rule would effectively transform an ‘all-risk’ policy into a 
‘no-risk’ policy.”  (Id. at pp. 1456-1457, fn. 6.)   
In a concurring opinion in Howell, Justice Barry-Deal concluded that “the 
rule in Sabella is based on the related ideas that, first, a reasonable insured expects 
that a loss will be covered if it is proximately caused by a covered peril, even 
though other remote and excluded causes may concur in producing the loss, and 
second, to construe the policy to defeat that expectation would be contrary to the 
purpose of the insurance itself, i.e., provision against economic loss from certain 
classes of perils.”  (Howell, supra, 218 Cal.App.3d at p. 1466.)  The concurring 
 
10
opinion also concluded that “an insurer may not defeat coverage by discovering a 
remote and excluded cause somewhere in the chain of causation, even where the 
policy contains clear language that would support the insurer’s interpretation.  
That finding is based on two related principles applicable to all insurance 
contracts:  first, that ‘the policy or its endorsements cannot be so interpreted as to 
become meaningless, or to withhold coverage which the [layperson] would 
normally expect from it . . . ,’ and second, that ‘ “. . . [t]he courts will not sanction 
a construction of the insurer’s language that will defeat the very purpose or object 
of the insurance.  [Citations.] . . . .” ’  [Citation.]”  (Id. at pp. 1467-1468.)  “At 
bottom, the rule applied . . . is a recognition that an exclusion based on remote 
causation, if given routine effect, could render a policy valueless almost at 
random.”  (Id. at p. 1475 (conc. opn. of Barry-Deal, J.).)  
Garvey, supra, 48 Cal.3d 395 and Howell, supra, 218 Cal.App.3d 1446 
thus rejected insurers’ attempts to contract around the proximate cause doctrine 
through sweeping language that would have rendered the policies’ coverage terms 
virtually illusory.  In both cases, enforcement of the broad prefatory language 
introducing the excluded peril of earth movement would have allowed the insurer 
to deny coverage for a loss proximately caused by a covered peril.  Consistent 
with prior case law and section 530, Garvey implicitly and Howell explicitly held 
that section 530 and the efficient proximate cause doctrine announce a rule that 
reasonable insureds consider themselves insured against losses proximately caused 
by perils covered under a first party insurance policy, regardless of contrary 
language employed in connection with excluded perils.  (Garvey, supra, 48 Cal.3d 
at pp. 412-413; Howell, supra, 218 Cal.App.3d 1452, 1454, 1459.)   
Although Garvey and Howell declined to give effect to the overbroad terms 
in the exclusions before them, both enforced the exclusions to the extent that they 
applied to losses proximately caused by the peril explicitly named therein, earth 
 
11
movement.  (Garvey, supra, 48 Cal.3d at pp. 412-413; Howell, supra, 218 
Cal.App.3d at pp. 1452, 1458, 1459.)  By enforcing the exclusions to the extent 
that the specifically identified peril of earth movement was the proximate cause of 
the plaintiffs’ losses, Garvey and Howell brought about “a fair result within the 
reasonable expectations of both the insured and the insurer” (Garvey, supra, 48 
Cal.3d at p. 404) consistent with our statutory mandate to interpret contracts in 
such a manner as will make them “lawful, operative, definite, reasonable, and 
capable of being carried into effect, if it can be done without violating the 
intention of the parties” (Civ. Code, § 1643) and to “give effect to every part” of a 
contract (id., § 1641; Sutton v. Farmers Ins. Exchange (1995) 35 Cal.App.4th 
1800, 1804; Barrett v. Farmers Ins. Group (1985) 174 Cal.App.3d 747, 750-751).   
Returning to the weather conditions clause, we note that this is not the first 
time insurers and insureds have disputed whether the clause is consistent with the 
efficient proximate cause rule.  In Findlay v. United Pacific Ins. Co. (1996) 129 
Wn.2d 368 [917 P.2d 116] (Findlay) the Washington Supreme Court determined 
that the weather conditions clause did not violate the doctrine.  Washington, like 
California, has adopted the efficient proximate cause rule for first party insurance 
and applied the doctrine to override contrary policy language.  (See Safeco Ins. 
Co. of Amer. v. Hirschmann (1989) 112 Wn.2d 621, 625-629 [773 P.2d 413]; 
Villella v. Public Employees Mut. Ins. Co. (1986) 106 Wn.2d 806, 814-819 [725 
P.2d 957]; Graham v. Public Employees Mut. Ins. Co. (1983) 98 Wn.2d 533, 538 
[656 P.2d 1077].)  Findlay, like this case, involved a landslide caused by weather.  
(Findlay, supra, 129 Wn.2d at p. 370.)  The insurer denied coverage, invoking a 
weather conditions clause substantively identical to the one involved here.  (Id. at 
p. 371.)  Findlay affirmed the trial court’s grant of summary judgment in favor of 
the insurer.  (Id. at p. 372.)  Findlay distinguished earlier decisions finding 
overbroad policy language to be inconsistent with the efficient proximate cause 
 
12
doctrine, holding, “This is not a case where the efficient proximate cause rule is 
being circumvented by disallowing coverage any time an excluded event occurs in 
the chain of causation, even when the triggering cause of the loss is a covered risk.  
In this case, the proximate cause of the loss was a named, excluded peril.  Weather 
conditions are specifically excluded whenever they combine with earth movement 
to cause a loss.  The policy is unambiguous as to what was covered and what was 
excluded from coverage.”  (Id. at pp. 375-376.) 
 
Palub, supra, 92 Cal.App.4th 645, disagreed with Findlay, criticizing that 
decision as having elevated “form over substance.” (Id. at p. 651.)  Palub also 
involved damage resulting from a landslide.  The insurer denied coverage, citing 
the weather conditions clause.  (Id. at p. 648.)  The trial court agreed that the 
policy excluded each of the relevant perils.  (Ibid.)  The Court of Appeal in Palub 
reversed, finding that “the policy covers loss caused by weather conditions and 
that the policy provision which seeks to exclude loss caused by weather in 
combination with an uncovered cause of loss violates Insurance Code section 
530.”  (Ibid.)  Palub held: “On a careful reading of this clause, it is apparent that 
despite the title of the section, weather conditions are not an excluded cause of 
loss.  To the contrary, under the terms of the purported exclusion, loss caused by 
weather conditions is covered, so that Hartford would be clearly obligated to pay if 
appellants’ house had been damaged by rain or wind.  What the ‘exclusion’ seeks 
to do is to exclude loss caused by a combination of weather conditions and an 
excluded cause of loss such as earth movement.  To the extent that the ‘exclusion’ 
would exclude loss proximately caused by weather conditions, it violates 
Insurance Code section 530 and the long-standing principle that a property insurer 
is liable whenever a covered risk is the proximate cause of a loss, and is 
unenforceable.”  (92 Cal.App.4th at p. 650.)  
 
13
 
Finally, the Court of Appeal below took issue with Palub’s reasoning and 
result.  The Court of Appeal perceived the weather conditions clause as an 
exclusion (for all loses caused by weather conditions) containing an exception 
(restoring coverage for losses caused by weather conditions as to which a cross-
referenced peril did not “contribute in any way”).  The Court of Appeal held that 
“[t]he fact that the exclusion contained an exception did not transform it into a 
coverage provision” for all losses caused by weather conditions.  It continued, 
“We believe Palub gives insufficient weight to the rule that a provision in the 
exclusions section of a policy does not create coverage, and an exception to an 
exclusion merely restores coverage where it would otherwise not exist.  
[Citations.]  Moreover, characterizing the weather conditions provision as an 
exclusion does not provide an insurer the means to deny a claim because some 
excluded peril contributed to a loss in a small way, the problem the efficient 
proximate cause doctrine is designed to forestall.  [Citation.]” 
 
The Julians and supporting amici curiae argue that the weather conditions 
clause has exactly the effect disclaimed by the Court of Appeal.  Specifically, they 
observe that because this is an “open peril” policy, all perils not expressly 
excluded by the policy are covered.  (See Garvey, supra, 48 Cal.3d at p. 406; 
Travelers Casualty & Surety Co. v. Superior Court (1998) 63 Cal.App.4th 1440, 
1454; Strubble v. United Services Auto. Assn. (1973) 35 Cal.App.3d 498, 504.)  
The policy purports to exclude losses caused by weather conditions, but only 
where weather conditions “contribute in any way with” earth movement (e.g., 
landslide), water damage (e.g., flood), or another cross-referenced, excluded peril.  
Under the plain terms of the policy, losses caused by weather conditions that do 
not “contribute in any way with” earth movement, water damage, etc. are covered.  
Thus the coverage inquiry turns on whether earth movement, water damage, or the 
like “contribute[d] in any way with” weather conditions to create a loss.  This 
 
14
“contribute[s] in any way” language, they posit, has the same sweeping and 
pernicious effect as the policy terms involved in Howell and Garvey had, in that it 
allows the insurer to defeat coverage for a loss proximately caused by weather 
conditions merely by finding a remote peril somewhere – no matter how distant, 
minor, or independent from the weather conditions – in the causal background.  
Hartford, meanwhile, argues that the weather conditions clause properly excludes 
a specific peril, and that neither section 530 nor the efficient proximate cause 
doctrine prohibits it from defining excluded perils as it chooses.   
The threshold question, as we see it, is whether section 530 and the 
efficient proximate cause doctrine inflexibly prohibit an insurer from insuring 
against some manifestations of weather conditions, but not others.  The Julians 
argue that Hartford cannot draft policy provisions having such an effect.  They 
contend, and Palub agreed, that because the Julians’ policy provides coverage for 
losses caused by weather conditions under some conditions, it must cover losses 
caused by weather conditions under all circumstances or else run afoul of the 
efficient proximate cause doctrine.  We disagree.   
“[A]n insurance company can limit the coverage of a policy issued by it as 
long as such limitation conforms to the law and is not contrary to public policy.”  
(Lumberman’s Mut. Cas. Co. v. Wyman (1976) 64 Cal.App.3d 252, 259.)  “An 
insurance policy may exclude coverage for particular injuries or damages in 
certain specified circumstances while providing coverage in other circumstances.”  
(Frank and Freedus v. Allstate Ins. Co. (1996) 45 Cal.App.4th 461, 471.)  It 
follows that an 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.  For example, a policy might exclude losses caused by freezing to 
 
15
plumbing, but provide coverage for other types of freezing, or vice versa.  The fact 
that the exclusion does not apply to all types of freezing does not, by itself, render 
it invalid.  Likewise, an insurance policy can provide coverage for weather 
conditions generally, but exclude coverage for specific weather conditions such as 
hail, wind, or rain.  The fact that hail, wind, and rain are types of weather 
conditions does not bind the insurer to insure against all weather conditions, or 
none at all.  A reasonable insured would readily understand from the policy 
language which perils are covered and which are not.  Similar logic applies where 
the limitations of our language require an insurer to describe a specific peril in 
terms of a relationship between two otherwise distinct perils (e.g., rain and 
landslide) in order to plainly and precisely communicate an excluded risk.  In such 
a case, the fact that a policy provides coverage for some, but not all, 
manifestations of each constituent peril does not necessarily render the clause 
naming and excluding the “combined” peril invalid pursuant to section 530 and 
the efficient proximate cause doctrine.    
The Julians and supporting amici curiae nevertheless contend that the 
weather conditions clause is invalid because the existence of the excluded “peril” 
identified in the clause, and therefore application of the exclusion, turns on even 
the most minor contribution of a remote, excluded peril such as earth movement.  
Amicus curiae United Policyholders argues that as written, the weather conditions 
clause allows Hartford to deny coverage when a loss is caused 99 percent by 
weather conditions and 1 percent by earth movement.  For example, coverage for a 
loss by all appearances caused by a windstorm could be denied where the damage 
also could be linked in some manner to modest earth movement or water damage 
that occurred long before the storm.   
We agree with United Policyholders that application of the policy language 
in situations like the one described above would raise troubling questions 
 
16
regarding the clause’s consistency with the efficient proximate cause doctrine.  
Denial of coverage for such a loss would suggest the provision of illusory 
insurance against weather conditions, raising concerns similar to those implicated 
in Howell.  (Howell, supra, 218 Cal.App.3d at pp. 1467-1468, 1475 (conc. opn. of 
Barry-Deal, J.).)  Indeed, the phrase “contribute in any way with” that links 
weather conditions with earth movement in the present cause seems particularly 
designed to circumvent the efficient proximate cause doctrine.  For like reasons, 
we disagree with Hartford’s implicit argument that an insurer’s ability to combine 
otherwise separate perils into a single peril will invariably render section 530 and 
the efficient proximate cause doctrine irrelevant.  This mechanistic approach 
toward avoiding efficient proximate cause analysis would have us endorse 
excluded “perils” regardless of how they mingle or concatenate distinct risks, and 
whether or not they provide “a fair result within the reasonable expectations of 
both the insured and the insurer.”  (Garvey, supra, 48 Cal.3d at p. 404.)  
Here, however, we address only the application of the weather conditions 
clause to a loss occasioned by a rain-induced landslide.  The peril of rain inducing 
a landslide is a genuine one, not a mere drafting fiction.  Rain inducing a landslide 
is a commonly understood risk of loss and the frequent and direct causal 
relationship between rain and landslide is widely and easily understood.  
The Hartford engineer’s report attested that the type of slope failure involved in 
this case was “always” caused by water.  The landslide here was not an 
independent causal agent in the Julians’ loss; by all accounts it was dependent on 
the weather condition of heavy rains.  And a reasonable insured would readily 
grasp the difference between a loss caused by weather conditions alone and a loss 
caused by weather conditions that induce a landslide, undermining the threat of 
illusory insurance.  Accordingly, to the extent the weather conditions clause 
 
17
excludes the specific peril of rain inducing a landslide, there is no violation of 
section 530 or the efficient proximate cause doctrine.   
The remaining task is to determine whether the weather conditions clause 
does, in fact, exclude the peril of rain inducing a landslide.  If it does, we will 
enforce the exclusion to the extent that this peril is the efficient proximate cause of 
the loss.  (See Garvey, supra, 48 Cal.3d at pp. 412-413; Howell, supra, 218 
Cal.App.3d at pp. 1452, 1458, 1459.)  Upon review of the weather conditions 
clause in the context of the policy as a whole, we agree with Findlay, supra, 129 
Wn.2d at pages 375-376 that the policy excludes this peril.  The weather 
conditions clause purports to exclude coverage for a loss caused by weather 
conditions that “contribute[d] in any way with” earth movement, including a 
landslide.  Particularly given the direct and well-known relationship between rain 
and landslide, a reasonable insured would understand that the words “contribute in 
any way with” connote an intention to exclude rain that induces a landslide.  
Significantly, the Julians have never supplied an alternative interpretation of the 
clause.4  Applying the exclusion to the facts of this case, therefore, brings about “a 
                                              
4  
The Julians did not contend in their opening brief that the weather 
conditions clause was ambiguous as applied here.  (See E.M.M.I., Inc. v. Zurich 
American Ins. Co. (2004) 32 Cal.4th 465, 471 [to be enforced, an exclusion must 
unambiguously apply to a particular loss and be conspicuous, plain and clear].)  
Although they cursorily suggested an ambiguity in their reply brief, they never 
offered a reasonable alternative interpretation of the policy language.  (Id. at p. 
470 [to be ambiguous, a policy provision must be susceptible to at least two 
reasonable constructions].)  We decline to advance an argument that the Julians 
neither timely nor fully made.  (See Shade Foods, Inc. v. Innovative Products 
Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 895, fn. 10 [“ ‘ “points raised 
in the reply brief for the first time will not be considered, unless good reason is 
shown for failure to present them before. . . .” ’ [Citations.]”) 
 
18
fair result within the reasonable expectations of both the insured and the insurer.”  
(Garvey, supra, 48 Cal.3d at p. 404.)   
We hold, in sum, that the weather conditions clause excludes the peril of 
rain inducing a landslide and that as applied here the clause does not violate 
section 530 or the efficient proximate cause doctrine.  Because the policy 
effectively excludes the perils of earth movement, third party negligence, and rain 
inducing a landslide, and the Julians produced no evidence that a different peril 
was the efficient proximate cause of their loss, we agree with the Court of Appeal 
that the trial court did not err in granting Hartford summary judgment.   
 
DISPOSITION 
 
The judgment of the Court of Appeal is affirmed.   
MORENO, J. 
 
WE CONCUR: GEORGE, C. J. 
 
KENNARD, J. 
 
WERDEGAR, J. 
 
CHIN, J. 
 
 
 
 
 
1
 
 
 
 
 
 
 
 
 
CONCURRING OPINION BY BROWN, J. 
 
I concur with the majority’s judgment affirming the Court of Appeal.  
However, I write separately because I agree with that court’s determination that 
the efficient proximate cause doctrine, codified in Insurance Code section 530, is 
not implicated. 
The majority parrots the argument set forth by amicus curiae United 
Policyholders that the weather conditions clause at issue allows the insurer to deny 
coverage when the loss is caused by 1 percent earth movement and 99 percent 
weather conditions.  (Maj. opn., ante, at p. 15.)  The majority states:  
“[A]pplication of the policy language in situations like the one described above 
would raise troubling questions regarding the clause’s consistency with the 
efficient proximate cause doctrine” and denying coverage for a loss such as that 
described above suggests “the provision of illusory insurance against weather 
conditions . . . .  [Citation.]”  (Id. at pp. 15-16.)  The focus of the majority’s 
concern is the phrase “contribute in any way.”  These words, according to the 
majority, seem “particularly designed to circumvent the efficient proximate cause 
doctrine.”  (Id. at p. 16.)  Of course, that is true only if the efficient proximate 
cause doctrine was designed to nullify policy language and force insurers to pay 
for a loss when an excluded risk is the efficient proximate or predominant cause.  
As a general rule, however, the insurer owes policy benefits to the insured if the 
efficient proximate cause of the loss is a covered peril, even when other 
specifically excluded perils contribute to the loss; but the insurer does not owe 
 
 
2
benefits when an excluded peril is the efficient proximate cause of the loss.  (State 
Farm Fire & Casualty Co. v. Von Der Lieth (1991) 54 Cal.3d 1123, 1131-1132 
[“[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 . . . covered and specifically excluded risks, the loss is covered if 
the covered risk was the efficient proximate cause of the loss.  [Citation.]  [T]he 
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”].)  Thus, the 
description in a policy of an unambiguous excluded peril does not circumvent the 
efficient proximate cause doctrine.  If the loss is proximately caused by an 
excluded peril, the doctrine is not applicable.  The majority nevertheless rejects 
“Hartford’s implicit argument that an insurer’s ability to combine otherwise 
separate perils into a single peril will invariably render section 530 and the 
efficient proximate cause doctrine irrelevant.”  (Maj. opn., ante, at p. 16.)  The 
majority describes this approach as “mechanistic” and believes it is an end run 
around the efficient proximate cause doctrine that would provide results outside 
“ ‘the reasonable expectations of both the insured and the insurer.’  [Citation.]”  
(Ibid.)   
Unlike the majority, I do not believe United Policyholders’ argument raises 
“troubling questions” (maj. opn., ante, at p. 15) with respect to the efficient 
proximate cause doctrine.  First, Hartford’s approach does not go against the 
“ ‘reasonable expectations of both the insured and the insurer.’ ”  (Id. at p. 16.)  
The reasonable expectations of the parties are found in the clear terms of the 
insurance contract—terms the Julians do not claim are ambiguous and that this 
state’s Department of Insurance approved.  (Garvey v. State Farm Fire & Casualty 
Co. (1989) 48 Cal.3d 395, 408 [“[T]he reasonable expectations of the insurer and 
the insured . . .—as manifested in the distribution of risks, the proportionate 
premiums charged and the coverage for all risks except those specifically 
excluded—cannot reasonably include an expectation of coverage in property loss 
 
 
3
cases in which the efficient proximate cause of the loss is an activity expressly 
excluded under the policy”].) 
I find the Court of Appeal’s well-reasoned opinion in this case expresses 
the better view:  “According to Hartford, it is free to exclude a category of peril 
from its policy and then restore coverage in certain circumstances without 
transforming an exclusion into a coverage provision.  We agree with Hartford.  [¶]  
A property insurer may exclude a category of peril from coverage under its policy.  
‘In the property insurance context, the insurer and the insured can tailor the policy 
according to the selection of insured and excluded risks and, in the process, 
determine the corresponding premium to meet the economic needs of the insured.’  
[Citation.] . . .  [¶]  Moreover, an insurer can exclude a specific category of peril 
and then restore a certain amount of coverage through an exception to the 
exclusion.  [Citation.]  In such circumstances the exclusion does not operate as a 
grant of coverage.  The exception to the exclusion merely ‘serves to “reinstate 
coverage” where it would not otherwise exist.’  [Citations.]  [¶]  Based on these 
principles, the weather conditions provision in the Julians’ policy is properly 
characterized as an exclusion, not as a coverage provision.  Hartford was free to 
deem weather conditions a category of peril excluded by the policy.  It made its 
decision to do so clear and unambiguous by listing weather conditions as an 
excluded peril in the exclusions section of its policy.  Indeed, the Julians do not 
suggest Hartford is precluded from writing its insurance policy to exclude weather 
conditions under all circumstances.  Hartford also was free to restore a certain 
amount of coverage to the insured when the circumstances under the exception to 
the weather conditions exclusion were satisfied.  The fact that the exclusion 
contained an exception did not transform it into a coverage provision.  As an 
exclusion, the weather conditions provision cannot serve as a grant of coverage 
permitting the Julians to recover on their claim under the efficient proximate cause 
doctrine.  [Citation.]” 
 
 
4
Like the Court of Appeal, I believe an insured and insurer “can tailor [a] 
policy according to the selection of insured and excluded risks” and—absent a 
violation of a fundamental public policy—courts should be loathe to step in and 
rewrite their terms.  As the Supreme Court in Washington stated when reviewing a 
virtually identical weather conditions provision, “If the efficient proximate cause 
. . . is a specifically named, unambiguous excluded peril in the policy, we will not 
mandate coverage.  We will not, under the guise of public policy, rewrite a clear 
contract between the parties.”  (Findlay v. United Pacific Ins. Co. (Wash. 1996) 
917 P.2d 116, 122.)  Although holding that the efficient proximate cause doctrine 
is not applicable in this case, I believe the majority’s approach leaves the door 
open for courts to step in and rewrite insurance contracts, in derogation of the 
parties’ reasonable expectations as set forth in the contracts.   
For the reasons stated above, I would affirm the Court of Appeal and 
overrule Palub v. Hartford Underwriters Ins. Co. (2001) 92 Cal.App.4th 645.   
 
 
 
 
 
 
 
BROWN, J. 
I CONCUR: 
 
BAXTER, J. 
 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Julian v. Hartford Underwriters Insurance Company 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 100 Cal.App.4th 811 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S109735 
Date Filed: May 5, 2005 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Stephen D. Petersen 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
The Law Offices of Kim H. Pearman, Pearman Law Corporation, Kim H. Pearman, Robert L. Pearman and 
Kenneth R. Nahigian for Plaintiffs and Appellants. 
 
Chipman Miles & Associates, Chipman Miles, Brian B. Miles, Joel M. Westbrook; and Amy Bach for 
United Policyholders as Amicus Curiae on behalf of Plaintiffs and Appellants. 
 
Gary M. Cohen, Jerry L. Whitfield and Risa Salat-Kolm for California Department of Insurance as Amicus 
Curiae on behalf of Plaintiffs and Appellants. 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
Ropers, Majeski, Kohn & Bentley, Todd A. Roberts, Kevin G. McCurdy and Crystal N. Thomas for 
Defendant and Respondent. 
 
Willoughby, Stuart & Bening, Ronald J. Cook and Bruce M. MacLeod for California State Automobile 
Association Inter-Insurance Bureau as Amicus Curiae on behalf of Defendant and Respondent. 
 
Capman, Popik & White and Susan M. Popik for Personal Insurance Federation of California as Amicus 
Curiae on behalf of Defendant and Respondent. 
 
 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Kim H. Pearman 
Pearman Law Corporation 
14550 Friar Street 
Van Nuys, CA  91411 
(818) 787-6500 
 
Chipman Miles 
Chipman Miles & Associates 
1407 Oakland Blvd., Suite 107 
Walnut Creek, CA  94596 
(925) 938-4500 
 
Risa Salat-Kolm 
California Department of Insurance 
45 Fremont Street 
San Francisco, CA  94105 
(415) 538-4127 
 
Todd A. Roberts 
Ropers, Majeski, Kohn & Bentley 
1001 Marshall Street, Third Floor 
Redwood City, CA  94063 
(650) 364-8200