Opinion ID: 1534985
Heading Depth: 3
Heading Rank: 2

Heading: Efficient Proximate Cause

Text: Chase asks us to apply the socalled efficient proximate cause doctrine, which is utilized in many jurisdictions to settle whether there is insurance coverage when a covered and a noncovered peril contribute to a loss. The doctrine holds that unless the insurance policy provides otherwise, [i]f a covered peril is found to be the efficient proximate cause, then the loss is covered; if a noncovered peril is found to be the efficient proximate cause, then the loss is not covered. Pioneer Chlor Alkali Co. v. National Union Fire Ins., 863 F.Supp. 1226, 1230 (D.Nev.1994). [8] Our own case law, which simply focuses on the proximate cause of the loss, follows the same principle. See Unkelsbee v. Homestead Fire Ins. Co., 41 A.2d 168, 171 (D.C.1945) (whether appearing in a clause creating or in one excepting from liability, unless qualifying words appear, such as `direct,' `direct or indirect,' `sole,' etc., the usual rule attributing a result to the proximate and not to the remote cause has been applied). See also Quadrangle Dev. Corp. v. Hartford Ins. Co., 645 A.2d 1074, 1076-77 (D.C.1994) (citing Unkelsbee and describing proximate cause in the insurance context as the efficient cause, the one that necessarily sets the other causes in operation, and as the dominant cause, distinguishing it from merely incidental causes). [9] Chase contends that the efficient proximate cause of her loss was a covered perilthe rupture of her water pipe rather than the uncovered peril of the earth movement that resulted from that rupture. We need not decide whether Chase is correct on this point. The efficient proximate cause doctrine is a default rule which gives way to the language of the contract. Pioneer Chlor Alkali, 863 F.Supp. at 1232 (citations omitted). The State Farm policy unambiguously dictates that proximate causation rules are not to be followed in connection with the earth movement exclusion. The lead-in paragraph to that exclusion addresses the issue explicitly. That paragraph excludes from coverage any loss which would not have occurred in the absence of earth movement. The exclusion applies 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. . . . In other words, if earth movement was a contributing cause of the loss of Chase's property, the policy does not cover that losseven if earth movement was not the (efficient) proximate cause and there were more dominant causes involving covered risks. The causation language in the introduction to the earth movement exclusion is clearly intended to supplant the efficient proximate cause doctrine. Cf. Quadrangle, 645 A.2d at 1076 (noting that where insurance policy denies coverage if excluded event is merely an indirect cause of the loss, [t]he broad sweep of the ... exclusion reaches damages not proximately caused by the excluded risk). This is a permissible outcome in the District of Columbia, as there is no statute or public policy requiring otherwise. Generally, parties are free to enter into whatever contractual agreements they wish. That freedom is curtailed by the courts only when such contracts, or contractual provisions, run contrary to public policy. Smalls, 678 A.2d at 36.