Court Opinion

ID: 9784469
Source: CourtListenerOpinion
Date Created: 2023-08-30 20:45:38.915544+00
Date Added: 2024-06-11T07:35:54.973588
License: Public Domain

*762BROWN, J.,
Concurring.—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. 760.) The majority states: “[Ajpplication 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 p. 760) 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. 760.) 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 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 [2 Cal.Rptr.2d 183, 820 P.2d 285] [“[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. 760.) 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.)
*763Unlike the majority, I do not believe United Policyholders’ argument raises “troubling questions” (maj. opn., ante, at p. 760) 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. 760.) 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 [257 Cal.Rptr. 292, 770 P.2d 704] [“[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 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.] . . . [f] 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.]”
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 *764a 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) 129 Wn.2d 368, 380 [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 [112 Cal.Rptr.2d 270].
Baxter, J., concurred.