Opinion ID: 1135155
Heading Depth: 1
Heading Rank: 5

Heading: Multiple Cause Analysis

Text: [T]he liability of the insurer depends upon whether the damages sustained were a result of a risk or hazard against which the insured was covered by the policy. Couch on Insurance, supra, § 101:41. A covered cause and an excluded cause are at issue in this garnishment action. Couch describes the independent concurrent cause rule as being potentially applicable in such circumstances. Id. § 101:50. When an insured sustains a loss which is partly due to a covered cause and partly to one which is not covered, and it is possible to allocate to each the amount of loss caused thereby, it is apparent that the insurer is only liable for that part of the total loss which is shown to have been the result of the covered cause. Id.; see also Jane D., 32 Cal.App.4th 643, 38 Cal.Rptr.2d at 136 (1995) (An allegation of sexual misconduct does not preclude coverage if there are other allegations of conduct that is covered.). [5] Couch identifies other rules that may potentially apply to multiple cause cases. Bohrer invokes them here. She argues that DeHart's counseling activities caused his sexual misconduct and the policy should answer for the entire compensatory award. Although this theory finds some support in both the efficient proximate cause and the concurrent cause rules, See Couch on Insurance, supra, § 101:57, we reject application of either in favor of allocating Bohrer's compensatory damage award between the coverage and the exclusion, utilizing the independent concurrent cause rule. The efficient proximate cause rule can result in recovery for the entire loss when the covered risk in comparison with non-covered risks set the other causes in motion which, in an unbroken sequence, produced the result for which recovery is sought. Id. § 101:57. The concurrent cause rule can result in full recovery when two or more causes appreciably contribute to the loss, and at least one of the causes is an included risk under the policy. Id. Our court of appeals adopted yet another approach. It held that the exclusion prevails in light of the sexual misconduct charge. See Bohrer, No. 95CA1692, slip op. at 4 (relying on Houg, 509 N.W.2d at 593). This approach vindicates the public policy against insuring intentional or willful wrongful acts but renders the innocent third-party victim without recourse to insurance proceeds for covered acts that also occurred. We apply the independent concurrent cause rule in light of the contract language and the facts of this case. Church Mutual covered the risk of DeHart's counseling activities but excepted actual conduct of a sexual nature. Bohrer was the third-party victim of both types of activity by DeHart. The victim is a third-party beneficiary of the insurance policy whose interest is to be protected in insurance cases. See Couch on Insurance, supra, § 101:58. At the same time, to apply a rule that entirely defeats the exclusion would effectively recompense DeHart for damages owed on account of his intentional, willful wrong. We reject this alternative as contrary to the terms of the contract and public policy. In Kane v. Royal Insurance Co. of America, 768 P.2d 678, 684-85 (Colo.1989), we held that the efficient proximate cause rule must yield to the language of the insurance policy in question. We conclude that allocation of the jury's compensatory award between coverage and exclusion best implements the plain intent of the parties to the insurance contract and Colorado public policy. Here, the counseling relationship predated and continued for a period of time prior to the excluded sexual conduct; thus, the causes are separable.