Opinion ID: 3171786
Heading Depth: 2
Heading Rank: 1

Heading: Appellee’s Burden of Showing Fortuity

Text: We affirm the district court’s ruling that Appellee carried its “light” burden of establishing a fortuitous loss. Appellee established that the Kan-do sank because of water intrusion after the bilge-pump system failed and that the bilgepump system failed because of a blown fuse. No one knows what caused the fuse to blow. Appellee also presented evidence that the Kan-Do was well-maintained, and Great Lakes does not assert in this appeal that the losses were caused by wear and tear or lack of maintenance. Under these circumstances, the blown fuse is consistent with an unexplained event that, “so far as the parties are aware, is dependent on chance.” Morrison Grain Co., Inc., 632 F.2d at 431 (citation omitted). Great Lakes contends that without any “evidence showing what fortuitous event caused the fuse to fail” or evidence that the bilge-pump system failed prematurely, the insured did not meet its burden of showing fortuity because a court cannot distinguish whether the loss was caused by a fortuitous event or a non-fortuitous event. We disagree. We have long held that requiring insurance claimants to prove the “precise cause” of loss or damage in order to recover under an “all-risk” insurance policy is “inconsistent with the broad protective purposes of ‘all risks’ insurance.” 7 Case: 15-11939 Date Filed: 01/25/2016 Page: 8 of 13 Morrison Grain Co., 632 F.2d at 430. Under the circumstances here, where Great Lakes does not contend that the losses were caused by wear and tear or lack of maintenance, there was no need for Appellee to present evidence on the cause of the fuse’s failure. It was enough to show that the bilge-pump system’s failure was caused by a blown fuse. Nor did Appellee have to present evidence indicating that the bilge-pump system failed prematurely. Evidence of a premature mechanical failure may, in some instances, be persuasive to rebut an insurer’s claim that the loss or damage at issue was occasioned by normal wear and tear or the lack of appropriate maintenance rather than by chance. But Great Lakes has withdrawn any reliance on the policy exclusions for wear and tear or lack of maintenance. In sum, we conclude that the district court properly determined that Appellee met its initial, light burden of establishing a fortuitous loss within the policy period. Consequently, the burden shifted to the insurer, Great Lakes, to show that the loss was otherwise excluded under the policy.