Court Opinion

ID: 9400127
Source: CourtListenerOpinion
Date Created: 2023-06-07 16:01:26.855485+00
Date Added: 2024-06-11T17:19:42.156980
License: Public Domain

USCA11 Case: 22-13489   Document: 31-1     Date Filed: 06/07/2023   Page: 1 of 6

                                                 [DO NOT PUBLISH]
                                  In the
                United States Court of Appeals
                        For the Eleventh Circuit

                         ____________________

                               No. 22-13489
                         Non-Argument Calendar
                         ____________________

       ALLIED WORLD ASSURANCE COMPANY, INC.,
       as subrogee and assignee of Garney/Wharton
       Smith joint venture committed to serving the NW
       communities,
                                                    Plaintiﬀ-Appellant,
       versus
       TRAVELERS PROPERTY CASUALTY COMPANY OF
       AMERICA,
       a Connecticut corporation,

                                                  Defendant-Appellee.

                         ____________________
USCA11 Case: 22-13489     Document: 31-1     Date Filed: 06/07/2023    Page: 2 of 6

       2                     Opinion of the Court                22-13489

                 Appeal from the United States District Court
                     for the Southern District of Florida
                    D.C. Docket No. 1:20-cv-24470-KMW
                          ____________________

       Before ROSENBAUM, JILL PRYOR, and ANDERSON, Circuit Judges.
       PER CURIAM:
               Allied World Assurance Co. (“Allied”) appeals the district
       court’s grant of Travelers Property Casualty Company of Amer-
       ica’s (“Travelers”) motion for summary judgment in this insurance
       coverage case. On appeal Allied argues that the district court erred
       by erroneously applying Florida’s concurrent cause doctrine.
              The facts in this case are undisputed. Allied and Travelers
       both provided insurance policies to Garney/Wharton Smith
       (“GWS”), a construction company. GWS contracted with Hills-
       borough County, Florida, to design and build an expansion of its
       water reclamation facility. To that end, GWS designed and con-
       structed concrete basins that were intended to hold water during
       the treatment process. As part of that project, GWS was required
       to perform leak tests (“Leak Test”) on the basins and when it did,
       the water pressure damaged some of the basin’s wall panels and
       waterstops. The parties concede that the basins were defectively
       designed or constructed.
              GWS sought coverage ﬁrst from Travelers under its builders
       risk insurance policy but Travelers denied the claim because the
       policy excluded coverage for defective design or construction. By
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       22-13489               Opinion of the Court                         3

       contrast, GWS’s claim with Allied on its professional and pollution
       liability insurance policy was not rejected. Allied then, acting as
       GWS’s subrogee, ﬁled a declaratory judgment action, arguing that
       the Leak Test was a covered cause of loss. Allied argued in the dis-
       trict court, and argues on appeal, that there were two concurrent
       causes of the loss—the excluded and undisputed design/construc-
       tion defects and the Leak Test, which contributed to the damage
       due to the water pressure. Thus, Allied argues the Leak Test is a
       covered cause, which combined with the excluded cause, and, un-
       der Florida’s concurrent cause doctrine, the district court should
       have found coverage. The district court rejected Allied’s argu-
       ments. The district court granted Traveler’s motion for summary
       judgment, reasoning that the Leak Test was not independent from
       defective design or construction and thus there was no coverage
       under the concurrent cause doctrine.
              Under the concurrent cause doctrine, “coverage may exist
       where an insured risk constitutes a concurrent cause of the loss
       even when it is not the prime or eﬃcient cause.” Sebo v. Am. Home
       Assurance Co., 208 So. 3d 694, 698 (Fla. 2016). It is available when
       “neither peril could have created the loss alone but instead com-
       bined to create the loss” so that one “could not identify the prime,
       moving, or eﬃcient cause in order to determine coverage.” Id. The
       court concluded that “when independent perils converge and no
       single cause can be considered the sole or proximate cause, it is ap-
       propriate to apply the concurring cause doctrine.” Id. at 697. Flor-
       ida cases have applied the doctrine in cases where covered causes
       included storm damage (Sebo), sinkholes (Citizens Prop. Ins., Corp. v.
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       4                       Opinion of the Court                   22-13489

       Salkey, 260 So. 3d 371 (Fla. Dist. Ct. App. 2018)), hailstorm (Jones v.
       Federated Nat'l Ins. Co., 235 So. 3d 936 (Fla. Dist. Ct. App. 2018)), and
       failure to maintain property (Wallach v. Rosenberg, 527 So. 2d 1386
       (Fla. 3d Dist. Ct. App. 1988)).
               For several reasons, the district court did not err in rejecting
       Allied’s reliance on the concurrent cause doctrine. First, as a matter
       of common sense, the Leak Test cannot be considered a peril or a
       risk that might have caused the loss; rather, it was a mere test (cal-
       culated to imitate the normal expected use of the product) to de-
       termine if the product met design speciﬁcations. In other words,
       it cannot be deemed a cause of the loss: rather it merely was part
       of the project’s implementation which was designed to, and did,
       establish that there was in fact a design/construction defect. Stat-
       ing this common sense proposition in the language of the Florida
       Supreme Court, the concurrent cause doctrine is available when
       “neither peril could have created the loss alone but instead com-
       bined to create the loss.” Sebo, 208 So. 3d at 698. In the case before
       us, it is obvious that the excluded risk or cause (design/construc-
       tion defect) would have caused the loss by itself. That is, without
       any Leak Test, it is obvious that the loss would have occurred in the
       course of the normal use of the basin (i.e. ﬁlling with water to “its
       normal level line,” see Allied’s Brief at 5). Similarly, Sebo says the
       concurrent cause doctrine is appropriate when “when independent
       perils converge and no single cause can be considered the sole or
       proximate cause.” Id. at 697. In this case, the Leak test is not even
       a peril, and, in any event, is not independent of the
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       22-13489                  Opinion of the Court                                5

       design/construction defect. 1 The Leak Test was clearly intimately
       related to and dependent upon the design/construction defect be-
       cause the basin was designed to be ﬁlled with water and not leak.
       The Leak Test was necessary to test the design and construction.
       The Leak Test was part and parcel of the contractual obligation of
       GWS to design and construct a basin free of design/construction
       defects. The test was merely a contractual obligation to demon-
       strate that GWS was delivering to the County a basin free of de-
       sign/construction defects.
              If the Leak Test here could serve to nullify the exclusion of
       coverage for design/construction defects, the eﬀect would be to
       nullify all exclusions for design/construction defects. That is, if the
       normal expected use of a product—when it reveals a design/con-
       struction defect—were considered to be a concurring cause oper-
       ating in combination with the excluded defect so as to nullify the
       exclusion, every conceivable design/construction exclusion would
       simply be nulliﬁed.
              For the foregoing reasons, the judgment of the district court
       is

       1 Florida law applies the concurrent cause doctrine only when the two asserted

       causes (one covered and one excluded) are independent. See Hrynkiw v. Allstate
       Floridian Ins. Co., 844 So. 2d 739, 745 (Fla. Dist. Ct. App. 2003) (holding that
       the Florida concurrent cause doctrine “only applies when the causes are not
       related and dependent, but rather involve separate and distinct risks.”);
       Transamerica Ins. Co. v. Snell, 627 So. 2d 1275, 1276 (Fla. Dist. Ct. App.
       1993)(concurrent cause doctrine “is applicable only when the multiple causes
       are not related and dependent, and involve a separate and distinct risk.”).
USCA11 Case: 22-13489   Document: 31-1   Date Filed: 06/07/2023   Page: 6 of 6

       6                  Opinion of the Court              22-13489

       AFFIRMED.