Jack I. GARVEY and Rita A. Garvey, Plaintiffs and Respondents, v. STATE FARM FIRE AND CASUALTY COMPANY, Defendant and Appellant.
Defendant State Farm Fire and Casualty Company appeals from a directed verdict and a jury verdict in favor of its insureds, plaintiffs Jack and Rita Garvey. We reverse.
I. Facts and Procedure
Plaintiffs bought their house in the mid-1970s. A few years later they noticed that a house addition which had been built in the early 1960s had begun to pull away from the main structure. There ensued numerous phone calls, letters, meetings and investigations as plaintiffs tried to determine from defendant whether the damage was covered by their homeowner's property insurance policy. After many months of investigation defendant told plaintiffs they were not covered because the policy specifically excluded coverage for earth movement.
Plaintiffs sued, claiming that although their policy excluded coverage for damage caused by earth movement, it provided coverage for damage caused by negligence. They asserted their loss was caused mainly (or at least proximately) by negligent construction of the house addition and hence the loss was covered. They also claimed that defendant had decided to deny their claim before adequately investigating, that subsequent “investigations” were undertaken merely to confirm the original denial, and that, therefore, denial constituted, inter alia, breach of the implied covenant of good faith and fair dealing. Plaintiffs sought as relief (i) policy benefits, (ii) general damages for economic detriment and emotional distress, and (iii) punitive damages.
After defendant rested on the twelfth day of trial the court granted a directed verdict for plaintiffs on the coverage issue. The court informed the parties it was following the Supreme Court's decision in State Farm Mut. Auto. Ins. Co. v. Partridge (1973) 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123, and that plaintiffs were covered under their policy because negligent construction, a covered risk, was a concurrent proximate cause of the damage. The jury subsequently found defendant liable for $47,000 in policy benefits and general damages, and one million dollars in punitive damages. The court denied defendant's motions for judgment notwithstanding the verdict and for a new trial, and declined to issue a remittitur with respect to the punitive damages award. This appeal followed.
This case presents a not uncommon question of coverage under a so-called “all risk” insurance policy: when one cause of a loss is an excluded risk, and another cause of the same loss is a covered risk, how does a court determine whether the policy provides coverage? Defendant contends that under our facts both Insurance Code section 532 and case law require that we determine there was no coverage. Defendant is wrong on each contention.1 We conclude, however, that the trial court incorrectly directed the verdict on the coverage issue.
A. The Two Tests: Sabella's “Moving Cause” and Partridge's “Concurrent Proximate Cause”
In Sabella v. Wisler, supra, 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889, our Supreme Court considered how to determine coverage under a property insurance policy when both an excluded risk and a covered risk allegedly join together to cause a loss. A building contractor had constructed a house on uncompacted fill and negligently installed a sewer line (a risk covered by the homeowner's policy) that eventually ruptured, either because of the surrounding settling earth or because of improperly connected joints in the line. In any event, the rupture caused water to flow into the ground surrounding the plaintiffs' house; consequently the earth settled (an excluded risk), causing damage: severe cracks in the home's foundation. Sabella established that in determining coverage in such a case a court should isolate the single cause that set in motion any other “causes” or “forces” or “chain of events” that led directly to the damage. If this cause—variously termed the “moving,” “efficient,” “proximate,” “prime,” or “efficient proximate” cause (hereafter “moving cause”)—is a covered risk, Sabella mandates policy coverage; if, on the other hand, the moving cause is an excluded risk, Sabella provides there shall be no coverage. Applying this test, the Sabella court concluded the broken pipe was the moving cause and hence the policy covered the loss. (Id., at pp. 31–32, 27 Cal.Rptr. 689, 377 P.2d 889.)
The Supreme Court eventually found that not all fact situations are amenable to Sabella's single moving cause analysis because in some cases it is impossible to isolate the moving cause of the damage. This is well illustrated in State Farm Mut. Aut. Ins. Co. v. Partridge, supra, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123, in which the court was forced to determine coverage under a homeowner's liability insurance policy that excluded coverage for injury arising out of the use of a motor vehicle. In Partridge the insured filed the trigger of his .357 magnum pistol to produce a “hair trigger action.” This modification was itself a negligent act (a risk covered under the homeowner's policy) that created an exceptionally dangerous weapon. Later, while engaged in the manly sport of rabbit hunting at night in his four-wheel drive Ford Bronco, the insured brandished his gun in one hand as he drove from a paved road onto rough terrain in order to chase an escaping rabbit caught in the Bronco's headlights. This second negligent act, driving a vehicle over rough terrain with a pistol in hand 2 (an excluded risk because a vehicle was involved), operated concurrently with the former negligent act (a covered risk) to produce injury: the gun discharged, severely injuring the insured's passenger. The passenger sued the insured, whose insurance company promptly sought declaratory judgment to determine, inter alia, whether the loss was covered by the homeowner's liability policy.
The Supreme Court agreed with the trial court that the two negligent acts were “independent, concurrent proximate causes” of the passenger's injuries (10 Cal.3d at p. 99, 109 Cal.Rptr. 811, 514 P.2d 123) and quoted the court's findings in this regard: “There were two separate, distinct and different acts of negligence committed by [the insured], one of which was entirely disconnected with the use of a motor vehicle [i.e., the excluded risk].” (Id., at p. 100, 109 Cal.Rptr. 811, 514 P.2d 123.)
Faced with such independent concurrent causes (id., at p. 103), the court recognized that the Sabella approach—under which the court would attempt to isolate the moving cause of the loss, i.e., the one which caused the other—simply would not work (id., at p. 104, fn. 10, 109 Cal.Rptr. 811, 514 P.2d 123): Because the two causes of the loss were independent of each other, it was impossible to determine which came first or set in motion the other.3 Under these circumstances, the court held, “coverage under a liability insurance policy is equally available to an insured whenever an insured risk constitutes simply a concurrent proximate cause of the injuries.” (Id., at pp. 104–105, 109 Cal.Rptr. 811, 514 P.2d 123; emphasis in original.)
Both parties seize on this and similar language in Partridge to advance their respective views. Defendant suggests that because the court repeatedly mentioned it was construing liability insurance coverage, its rule—i.e., the independent concurrent proximate cause analysis—should apply only to such “third party” policies, and not to “first party” property insurance coverage cases. Plaintiffs, on the other hand, suggest that coverage will be found under the Partridge rule whenever, as Partridge itself stated, a covered risk “constitutes simply a concurrent proximate cause” of the damage. Both positions are wrong.
1. Applicability of Partridge to Property Insurance Cases
Contrary to defendant's position, nothing in Partridge suggests the analysis in that decision is or should be confined to third party liability insurance cases. Partridge referred specifically to liability insurance because that was the type of policy under consideration there. As plaintiffs observe, Partridge itself cited first party accident and property insurance cases to support its holding. (10 Cal.3d at pp. 103–105, 109 Cal.Rptr. 811, 514 P.2d 123, relying on the following first party cases: Brooks v. Metropolitan Life Ins. Co. (1945) 27 Cal.2d 305, 163 P.2d 689; Sabella v. Wisler, supra, 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889; Hughes v. Potomac Ins. Co. (1962) 199 Cal.App.2d 239, 18 Cal.Rptr. 650; Zimmerman v. Continental Life Ins. Co. (1929) 99 Cal.App. 723, 279 P. 464.) If anything emerges from the interchangeable citations in Partridge to first and third party cases, it is that there is no distinction between them as to coverage analysis. In any event—and despite defendant's lengthy and rather disjointed argument to the contrary—we perceive no logical reason why coverage analysis should differ merely because of the nature of the policy under consideration.4
2. Partridge's “Independence” Requirement
Plaintiffs' suggestion that Partridge authorizes concurrent proximate cause analysis whenever an insured risk is simply a concurrent proximate cause of damage finds specific support in the Partridge opinion. (See 10 Cal.3d at pp. 102, 104–105, 109 Cal.Rptr. 811, 514 P.2d 123.) Plaintiffs also note that in Premier Ins. Co. v. Welch (1983) 140 Cal.App.3d 720, 189 Cal.Rptr. 657, we suggested a similar construction of Partridge. (Id., 10 Cal.3d at p. 727, 189 Cal.Rptr. 657.)
As amicus curiae for defendant observes, however, it would be erroneous to rely on such isolated readings. Viewing Partridge as a whole, that opinion clearly requires as a threshold matter that the covered risk be independent of the excluded risk before a court may forsake Sabella's moving cause analysis in favor of concurrent proximate cause analysis.5 Nor, as we shall explain below, should Premier support plaintiffs' view. In Premier we failed to clearly articulate the need to establish the insured risk's independence of the excluded risk. (See post, pp. 218–219.) We therefore hold, as has every other court that has faced the question, that the covered risk must exist independently of the excluded risk before policy coverage may be found under Partridge's concurrent proximate cause analysis.6
There are several basic fact patterns which need to be considered to fully understand the problem before us. There are fact patterns like Partridge in which two independent risks, acts or conditions “concurrently cause” the loss. In such a case, we begin by assuming that the loss would have or could have occurred even if only one of the two risks was present because these risks are defined as “independent.” Partridge teaches that there will always be coverage in such circumstances. However, it is critical to understand that the reason coverage exists is because it is nonsensical to say that only one of the two risks was the “primary cause” or set the other cause in motion. By definition, each would have or could have caused the loss in the absence of the other and coverage is afforded in recognition of that circumstance. This is why there is the independence requirement in Partridge- type cases.7
By contrast, if examination reveals that the two risks are “dependent concurrent causes” of the loss, the two risks must have joined together to cause the loss. Thus, one would expect that in the event one of the causes was missing, no loss could have occurred. This is the Sabella fact pattern. According to Sabella, when confronted with such a situation, the trier of fact must select one of the two risks as the “efficient proximate cause,” the “predominating or moving efficient cause” or the “prime or moving cause” of the loss. (Sabella, 59 Cal.2d at pp. 31–32, 27 Cal.Rptr. 689, 37 P.2d 889.) By the definition, the other “cause” is denominated as a “remote” cause of the loss. If the prime or moving efficient cause of the loss is an included risk, the policyholder has coverage; if it is an excluded risk, there is no coverage. Thus, the trier of fact looks to determine which of the “risks” or “causes” set the other cause in motion to ultimately cause the loss.
There is another relevant fact pattern which is not directly addressed by either Partridge or Sabella, the situation in which one of the two alleged “causes” of the loss is not a cause at all. This is the issue of “cause in fact” as opposed to “proximate cause.” Before an act or occurrence can be denominated as the “proximate cause” of a loss, it must in fact have been part of the causal chain of events. (See 4 Witkin, Summary of Cal. Law (8th Ed.1974) Torts, § 622, pp. 2903–2904.) Thus, rather than starting the analysis of these insurance coverage cases by determining if the two “risks” or “causes” are independent or dependent, one must first determine whether or not both alleged “causes” were, in reality, causes in fact.
As an illustrative example, assume a case in which the all-risk homeowners policy in question excludes damage caused by rainfall. Also assume that a sewer pipe under a hillside house covered by the policy was broken by someone working under the house permitting water to infiltrate the soil. Next assume that there is a once in a 100-year storm which causes large amounts of rainfall runoff in the area of the house. Finally, assume the house is damaged when it slides down the hill after the rainstorm and the policyholder makes a claim. In such a case, the trier of fact would have to determine whether the house slide loss was: (1) the result of the break in the sewer pipe alone (rainfall not a “cause in fact”—coverage afforded), (2) the result of the rainfall alone (sewer pipe not a “cause in fact”—coverage denied), (3) the result of both the sewer pipe and the rainfall, but each could have caused the slide by itself (“independent concurring proximate causes”—coverage afforded), or (4) the result of the break in the sewer pipe necessarily combined with the runoff water from the rainfall (dependent “concurring” causes—coverage generally denied only if the rainfall was the “moving cause” of the loss (but see post, page 23, footnote 10, last paragraph).)
Thus, whether the covered risk and excluded risk are causes in fact should be a court's threshold inquiry in cases such as this. If (i) they both are causes in fact and if the two risks are independent of each other, Partridge analysis is triggered: the insured is covered if the covered risk was a concurring proximate cause of the loss. If (ii) the two risks are dependent on each other, Sabella analysis is triggered: the insured is covered only if the covered risk was the moving cause of the loss. A review of the cases will shed light on how a court should determine whether risks are independent of each other.
3. Determining Independence of Risks
We begin with Partridge. As explained above, the insured's passenger was injured when the insured's gun discharged after he began to drive on rough terrain. The court found the filing of the trigger (a risk covered under the homeowner's liability policy) was itself a negligent act. The driving with gun in hand (an excluded risk) was also a negligent act. Because each act could have caused the loss regardless of the existence of the other act (10 Cal.3d at pp. 103, 104, fn. 10, 109 Cal.Rptr. 811, 514 P.2d 123), they were independent of each other. In other words, the Partridge court would not have found the covered risk to be “independent” if that risk (negligence) existed only in relation to an excluded risk.
Decisions applying Partridge have generally followed this reasoning in determining independence of risks. In Glens Falls Ins. Co. v. Rich (1975) 49 Cal.App.3d 390, 122 Cal.Rptr. 696, the insured's passenger was injured when the insured reached for a shotgun under the seat of his truck and the gun discharged. The court held the insured's negligent placement of a shotgun under the seat (a risk covered under the homeowner's liability policy) was a negligent act irrespective of his use of the truck (an excluded risk). (Id., at pp. 395–398, 122 Cal.Rptr. 696.) Had the insured handled the gun as he did in any place other than his truck, a similar accident might have occurred: Therefore, in the language of Partridge, the insured's negligent act was independent of the excluded risk.
In State Farm Fire & Cas. Co. v. Camara, supra, 63 Cal.App.3d 48, 133 Cal.Rptr. 600, the insured negligently redesigned and rebuilt a Volkswagen into a dune buggy. While hunting he negligently drove down a very steep hill and overturned, injuring his passenger. The court found the insured's negligent conversion of the vehicle (a risk covered under his homeowner's liability policy) did not exist independently of “operation or use” of his vehicle (an excluded risk). The court reasoned that negligent conversion of the vehicle was a negligent act only in relation to the operation and use of the vehicle, and was thus dependent on the excluded risk within the meaning of Partridge. (Id., at pp. 54–55, 133 Cal.Rptr. 600.)
In State Farm Fire & Cas. Co. v. Kohl, supra, 131 Cal.App.3d 1031, 182 Cal.Rptr. 720, an insured struck a motorcyclist while driving a truck. He left his vehicle and proceeded to negligently drag the motorcyclist from the street, subjecting the victim to additional injuries. The court found coverage for the insured under his homeowner's liability policy. The court held the covered risk (the insured's act of negligently dragging an injured accident victim) was an act of negligence irrespective of the excluded risk (use of the insured's vehicle, which had itself been in the accident). In other words, the additional injuries caused by negligently moving the victim were independent of the excluded risk within the meaning of Partridge. (Id., at p. 1039, 182 Cal.Rptr. 720.)8
In Allstate Ins. Co. v. Jones, supra, 139 Cal.App.3d 271, 188 Cal.Rptr. 557, a driver was killed when the insured's truck struck and ejected steel reinforcing rods (rebar) into his car. The court held the insured's negligent failure to properly load the rebar on his truck (a risk covered under his general liability policy) negligent only in relation to use of his truck (an excluded risk). The court reasoned, “[the insured's] failure to inspect, etc. would not have been negligent were it not for his use of the truck․ [¶ ] ․ [T]he improperly loaded rebar depended on the truck's movement and velocity to become a hazard.” (Id., at p. 277, 188 Cal.Rptr. 557.) Because the insured's act was negligent only in relation to his use of his truck, it was dependent on an excluded risk within the meaning of Partridge.
In Safeco Ins. Co. v. Gilstrap, supra, 141 Cal.App.3d 524, 190 Cal.Rptr. 425, the insureds' minor son crashed a motorcycle, injuring his passenger. The court held the insureds' negligent failure to properly supervise their son (a risk covered under their homeowner's liability policy) was a negligent act only in relation to use of the motorcycle (an excluded risk). The court reasoned, “the concept of negligent entrustment ‘is not exclusive of, but, rather, is derived from the more general concepts of ownership, operation, and use of a motor vehicle․ [I]t would be illogical to conclude that the exclusionary clause pertaining generally to the ‘ownership ․ operation, [or] use ․ of’ a ․ motor vehicle does not apply specifically to the negligent entrustment of the vehicle․' ” (Id., at p. 532, 190 Cal.Rptr. 425, quoting Barnstable County Mut. Fire Ins. Co. v. Lally (1978) 374 Mass. 602, 606, 373 N.E.2d 966.) The court concluded that the covered risk depended on the excluded risk within the meaning of Partridge.
In Hartford Fire Ins. Co. v. Superior Court, supra, 142 Cal.App.3d 406, 142 Cal.App.3d 406, 191 Cal.Rptr. 37, the insured's husband prepared for and planned an aircraft flight and thereafter attempted to fly an airplane while he was intoxicated; shortly after takeoff the craft crashed killing two passengers. The court found the husband's preflight negligent conduct 9 (a risk covered under the homeowner's policy) to have been negligent only in respect to use of the airplane (an excluded risk): Neither the preflight planning nor the consumption of alcohol could have caused the loss without the later use of the aircraft. Hence, the included risks were dependent on the excluded risk within the meaning of Partridge.
In Ohio Casualty Ins. Co. v. Hartford Accident & Indemnity Co., supra, 148 Cal.App.3d 641, 196 Cal.Rptr. 164, the insured allowed a minor swimmer to dive from his stationary boat into a lake. When the swimmer surfaced, she was run over by another boat and severely injured. The court held the insured's negligent supervision (a risk covered under his homeowner's liability policy) constituted a negligent act irrespective of the fact that the swimmer dove from a boat (use of a boat was an excluded risk). The court reasoned that the boat was in essence a floating platform and, thus, the negligent supervision “did not in itself constitute a use of the boat.” (Id., at p. 647, 196 Cal.Rptr. 164.) The key to understanding the court's conclusion is found in one sentence of the opinion: “The trap into which both Hartford and the trial court fell is that the mere fact Daly's negligent act is connected to the use of the boat does not mean it is dependent on the use of the boat.” (Ibid., emphasis in original.) Noting the insured would have been equally negligent had the victim dove in his presence under similar circumstances from a pier or the shore, the court found the insured's negligent act independent of the excluded risk within the meaning of Partridge.
Finally, in Daggs v. Foremost Ins. Co., supra, 148 Cal.App.3d 726, 196 Cal.Rptr. 193, a motorcycle race participant collided with a chain link fence maintained by the insured, a racing park operator. The court found the insured's negligent design and construction of the fence (a risk covered under the general liability policy in question) to be a negligent act only in relation to use of the race track for organized competition (an excluded risk): “The only reasonable interpretation ․ of plaintiff's ․ complaint is that [the insured] failed to make the motorcycle course safe for the organized racing event in which plaintiff was participating ․ and this cause of the injuries is not independent of the policy exclusion” within the meaning of Partridge. (Id., at p. 730, 196 Cal.Rptr. 193.)
Despite these California Courts of Appeal cases construing independence of risk, plaintiffs insist we should be guided by two other opinions: the Ninth Circuit's interpretation of California law in Safeco Ins. Co. of America v. Guyton, supra, 692 F.2d 551, and our own decision in Premier Ins. Co. v. Welch, supra, 140 Cal.App.3d 720, 189 Cal.Rptr. 657.
Guyton does not assist plaintiffs. In that case the insurance company sought declaratory relief against numerous insureds after severe flooding (a risk excluded from coverage under the homeowner's policies) damaged their homes. The trial court rejected the policyholders' claim that the water district's negligence in failing to provide adequate flood control facilities (a covered risk) caused their loss, and held under Sabella there was no coverage because the excluded risk—flooding—was the moving cause of the loss. (Safeco Ins. Co. of America v. Guyton (C.D.1979) 471 F.Supp. 1126, 1131.)
The Ninth Circuit reversed on the basis that the insureds should be allowed to elect to seek coverage under Partridge's “concurrent cause” analysis (692 F.2d 551, 554), and remanded for that purpose. The court recognized that in order for Partridge to apply the covered risk must have existed independently of the excluded risk. But the court reasoned the requirement was met because “two independently created conditions interacted to cause [the] loss.” (Id., at p. 555.)
In so construing California law the Guyton court ignored previously decided cases: Camara, supra, 63 Cal.App.3d 48, 133 Cal.Rptr. 600, National Indemnity Co., supra, 95 Cal.App.3d 102, 157 Cal.Rptr. 98, and Kohl, supra, 131 Cal.App.3d 1031, 182 Cal.Rptr. 720—all of which made clear that the Partridge “independence” element can be met only if the covered risk (i.e., negligence) is independent of the excluded risk. Properly construed, the dependence of Guyton's covered risk (negligent failure to provide proper flood control facilities) on the excluded risk (flooding) is patent: The water district was negligent because it provided flood control facilities inadequately designed to control flood water. If the threat of flood could have been taken away, the water district would not have been negligent. Guyton's analysis of Partridge's “independence” element, we conclude, misconstrues and misapplies California law.
Nor, as we have previously stated, should our decision in Premier Ins. Co. v. Welch, supra, 140 Cal.App.3d 720, 189 Cal.Rptr. 657 support plaintiffs. Premier concerned a house that slid from its foundation during heavy rain. The homeowner's property damage policy excluded coverage for water damage, but included coverage for negligence—in that case, a subdrain (designed to release subsurface waters) that had been damaged by someone installing a sewer nearby. Relying on Sabella, the trial court determined the moving cause of loss was rainfall—an excluded risk. We reversed, holding that under Sabella the moving cause of the loss was the negligently damaged subdrain. (140 Cal.App.3d at p. 725, 189 Cal.Rptr. 657.)
Despite having reached this conclusion, we continued our discussion, explaining that the insured would be covered in any event under Partridge because “the damaged subdrain was, at the very least, a concurrent proximate cause of the property loss․” (Id., at 727, 189 Cal.Rptr. 657.) However, we neglected to point out that such analysis was conditioned on the covered risk being independent of the excluded risk. In point of fact, the damaged subdrain was dependent upon the existence of the rainfall and resulting subsurface water in order for the loss to occur. This is clear because the stipulated facts established that the slide would not have occurred even in spite of the rainfall if the drain had not been damaged. (Id., at p. 723, 189 Cal.Rptr. 657.) Hence, we incorrectly indicated that there was coverage under Partridge because the included risk was a concurrent proximate cause of the loss. Premier was simply a Sabella situation. Having now conducted an extensive analysis of the independence issue, something we did not do in Premier, we now disapprove Premier to the degree it can be read to omit the independence requirement.
B. Application of Partridge and Sabella
The above discussion shows that, assuming causation in fact, the cases fall into three categories. In the first, courts have found coverage when the covered risk was independent of the excluded risk and was a concurrent proximate cause of the loss. (State Farm Mut. Auto. Ins. Co. v. Partridge, supra, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123; Glens Falls Ins. Co. v. Rich, supra, 49 Cal.App.3d 390, 122 Cal.Rptr. 696; State Farm Fire & Cas. Co. v. Kohl, supra, 131 Cal.App.3d 1031, 182 Cal.Rptr. 720; Ohio Casualty Ins. Co. v. Hartford Accident & Indemnity Co., supra, 148 Cal.App.3d 641, 196 Cal.Rptr. 164.) In the second category, involving dependent causation, courts have found coverage when the covered risk was the moving cause of the loss. (E.g., Sabella v. Wisler, supra, 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889; Sauer v. General Ins. Co. (1964) 225 Cal.App.2d 275, 37 Cal.Rptr. 303; Strubble v. United Services Auto. Assn. (1973) 35 Cal.App.3d 498, 110 Cal.Rptr. 828.) Finally, in the third category, also involving dependent causation, courts have denied coverage when the excluded risk was the moving cause of the loss.10 (State Farm Fire & Ins. Co. v. Camara, supra, 63 Cal.App.3d 48, 133 Cal.Rptr. 600; Allstate Ins. Co. v. Jones, supra, 139 Cal.App.3d 271, 188 Cal.Rptr. 557; Safeco Ins. Co. v. Gilstrap, supra, 141 Cal.App.3d 524, 190 Cal.Rptr. 425; Hartford Fire Ins. Co. v. Superior Court, supra, 142 Cal.App.3d 406, 191 Cal.Rptr. 37.)
Bearing in mind the facts here, we conclude the question of which category the present case falls into was a matter for the jury to decide. It may be that the loss was due to the fact that the covered risk (negligent construction of the house addition) was dependent on the excluded risk (earth movement). In other words, if the negligently constructed house addition was the agency through which the earth movement caused the loss, then coverage would be denied under Sabella. On the other hand, if the house addition was negligently constructed such that the addition is what caused the earth to move with the resulting loss, then coverage exists. Finally, if the earth was caused to move independent of the house addition and the addition was tearing away from the house independent of the earth movement, with the two happening to join together to cause the loss, then coverage exists. All of these issues were jury questions because sufficient evidence was introduced to support all three possibilities.
Accordingly, the entire judgment must be reversed (see Johansen v. California State Auto. Assn. Inter-Ins. Bureau (1975) 15 Cal.3d 9, 19, 190 Cal.Rptr. 425 [if there is no coverage, defendant cannot be liable for damages flowing from refusal to settle a claim] ). Because the matter will be retried, we need not consider the remaining issues raised by appellant.
I respectfully dissent because I find the majority opinion to be in conflict with the holding of our Supreme Court in State Farm Mut.Auto.Ins.Co. v. Partridge (1973) 10 Cal.3d 94, 104–105, 109 Cal.Rptr. 811, 514 P.2d 123. Not only do I find the tortuous analysis which the majority would impose on the fact finder to be without basis in the law, but it will, I believe, prove unworkable in practice.
In Partridge Justice Tobriner writing for the majority held that there will be coverage under a liability insurance policy “whenever an insured risk constitutes simply a concurrent proximate cause of the injuries.” (Id., at pp. 104–105, 109 Cal.Rptr. 811, 514 P.2d 123, emphasis in original, fn. omitted.) Issues of causation must inevitably turn on the facts offered in a given case. Some fact patterns lend themselves to a “chain” of events analogy where the injury causing agent is literally set in motion, like the first toppled domino, by a single cause. Such fact patterns lend themselves to the “moving” or “efficient” cause analysis set out in Sabella v. Wisler (1963) 59 Cal.2d 21, 31–32, 27 Cal.Rptr. 689, 377 P.2d 889. Not every injury conforms to this model, however. In response to the analytical limitations of the Sabella “chain” of events language, Justice Tobriner took pains in Partridge to set out an alternative terminology of concurrent causes.
In the case at hand the majority would apply Partridge only where concurrent proximate causes of a loss are wholly independent of one another. This newly discovered independence requirement is neither mandated by, nor is it consistent with, the decision in Partridge.
Careful reading of the Partridge decision reveals that the requirement my colleagues find of “independent cause” could not have been a part of its holding. Partridge cites as one of two leading California cases on point, Hughes v. Potomac Ins. Co. (1962) 199 Cal.App.2d 239, 18 Cal.Rptr. 650. Partridge describes Hughes as follows: “․ In Hughes the trial court found that a landslide was caused by ground water from rainfall, a covered risk, rather than by overflow from a river, an excluded risk. The Court of Appeal affirmed, declaring that even if the trial court had erred in finding the ground water to be the sole source of the landslide, the insurer would still be liable․” (State Farm Mut.Auto.Ins.Co. v. Partridge, supra, 10 Cal.3d at p. 105, 109 Cal.Rptr. 811, 514 P.2d 123.) After outlining those facts, the Partridge court specifically focused on the following language from Hughes which explained why “ ‘ “[i]t has been held that when two causes join in causing an injury, one of which is insured against, the insured is covered by the policy․” [Citation.]’ ( [Hughes v. Potomac Ins. Co., supra, ] 199 Cal.App.2d at p. 244, 18 Cal.Rptr. 650.) [Citations.]” (State Farm Mut.Auto.Ins.Co. v. Partridge, supra, 10 Cal.3d at p. 105, 109 Cal.Rptr. 811, 514 P.2d 123.) Neither Hughes, nor Partridge in relying upon it, makes any attempt to distinguish ground water as a cause wholly independent of flood water. Instead, by quoting the broad language of Hughes, Partridge sanctions that language and the causation analysis it embodies.
My colleagues focus entirely on footnote 10 in Partridge which uses once the language “independent.” I submit that they misconstrue what the court was doing. Footnote 10 was an explanation of the first clause of this important sentence in the Partridge text: “Although there may be some question whether either of the two causes in the instant case can be properly characterized as the ‘prime,’ ‘moving’ or ‘efficient’ cause of the accident we believe that coverage under a liability insurance policy is equally available to an insured whenever an insured risk constitutes simply a concurrent proximate cause of the injuries.” (Emphasis in original, fn. omitted.) Prescinding momentarily from analysis of footnote 10, what must be emphasized is Justice Tobriner's addition of italicized emphasis to the article “a” and to his characteristically careful use of language. If he meant to tell us that coverage attached only when an insured risk constitutes an independent cause of the injuries he picked an unusually clumsy way of saying so by using the language whenever an insured risk constitutes simply a concurrent proximate cause of the injuries. Thus on the basis of the carefully crafted text itself I judge that Justice Tobriner said precisely what he meant.
Nor does perusal of footnote 10 alter my reading—it merely reinforces it. The footnote was directed to the semantic problem of fitting efficient cause terminology (e.g., “the one that sets others in motion”) to a situation where one cause obviously did no such thing but merely coincided with the other cause or causes. In such a situation—and that is what the Supreme Court had before it in Partridge— Justice Tobriner called the efficient cause language “not very helpful” where both causes “were independent of each other.” But, he explained, the result would not change because “In traditional tort jargon, both are concurrent proximate causes of the accident, the negligent driving constituting an intervening, but non-superseding, cause of the accident. [Citation.] If committed by separate individuals, both actors would be joint tortfeasors fully liable for the resulting injuries. Moreover, the fact that both acts were committed by a single person does not alter their nature as concurrent proximate causes. [Citation.]” (At p. 104, fn. 10, 109 Cal.Rptr. 811, 514 P.2d 123.)
The language and reasoning of Partridge are clear: where one of the concurrent proximate causes of a loss is a covered risk the policy provides coverage. To also require that the covered cause be “independent” of other causes rewrites Partridge, an exercise beyond this court's power.
In order to comply with its new independent cause requirement the majority returns this case for retrial, directing the jury to follow what can only be characterized as a maze-like analytical pattern which may yield an answer as to coverage or then again may not. (See majority opn., ante, fn. 10, final par., p. 219.) While this analysis has a certain pleasing intellectual symmetry to it I suspect its utility is limited, to say the least. A clever jury will decide on the appropriate result and then, if it is lucky, successfully work backward answering the appropriate questions “yes” or “no” so as to yield that result. A less clever, or more conscientious, panel may attempt to follow the analysis in the order in which it is set out. Assuming they can do so, and assuming the fact pattern doesn't lead them into the boggy trough of “two dependent causes simultaneously contribut[ing] to creating [a] loss” (see majority opn., ante, fn. 10, p. 219), then they may reach a result which defines coverage in the largely conclusory legal jargon of independent concurrent causation or dependent concurrent causation.
None of these results will, I suspect, further the cause of creating greater predictability in coverage cases or in limiting coverage to risks against which the parties sought to insure. Indeed, under the rule set out by the majority the writing of policy exclusions will become the most arcane of art forms. The policies so produced will only puzzle the insureds and engender more bad faith litigation. These problems need not arise, however, if we read Partridge to mean what it holds, namely that there is coverage when an insured risk is a “concurrent proximate cause” of injury. (At p. 105, 109 Cal.Rptr. 811, 514 P.2d 123.)
For these reasons, I would affirm the judgment.
1. Section 532 provides: “If a peril is specially excepted in a contract of insurance and there is a loss which would not have occurred but for such peril, such loss is thereby excepted even though the immediate cause of the loss was a peril which was not excepted.” Defendant's first contention is plainly contrary to the Supreme Court's interpretation of section 532 in Sabella v. Wisler (1963) 59 Cal.2d 21, 33–34, 27 Cal.Rptr. 689, 377 P.2d 889, and State Farm Mut. Auto. Ins. Co. v. Partridge, supra, 10 Cal.3d 94, 105, 109 Cal.Rptr. 811, 514 P.2d 123, footnote 11.
2. Although some subsequent decisions have referenced this act as simply negligent or reckless driving, it is hard to see how merely driving a four-wheel drive vehicle like a Bronco off a road is, in and of itself, negligent or reckless.
3. As the court observed, “both causes were independent of each other: the filing of the trigger did not ‘cause’ the careless driving, nor vice versa. Both, however, caused the injury.” (10 Cal.3d at p. 104, fn. 10, 109 Cal.Rptr. 811, 514 P.2d 123.)
4. We also reject defendant's unsupported contention that negligence is not a covered peril under a first party property insurance policy. Sabella v. Wisler, supra, 59 Cal.2d 21, 31, 27 Cal.Rptr. 689, 377 P.2d 889, is clearly to the contrary.
5. Only after the Partridge court was satisfied the two risks were independent of each other did it announce that coverage existed so long as the insured risk was a concurrent proximate cause of the damage. In addition to the court's quotation of the trial court's findings stressing the independent character of the two risks, the court held the homeowner's automobile exclusion “does not preclude coverage when an accident results from the concurrence of a non-auto-related cause and an auto-related cause.” (10 Cal.3d at p. 97, 109 Cal.Rptr. 811, 541 P.2d 123.) The court framed the question before it as “whether a liability insurance policy provides coverage for an accident caused jointly by an insured risk (the negligent filing of the trigger mechanism) and by an excluded risk (the negligent driving). Defendants correctly contend that when two such risks [i.e., two independent risks] constitute concurrent proximate causes of an accident, the insurer is liable so long as one of the causes is covered by the policy.” (Id., at p. 102, 109 Cal.Rptr. 811, 541 P.2d 123.) The court observed, “[u]nder these facts ․ inasmuch as the liability of the insured arises from his non-auto-related conduct, and exists independently of any ‘use’ of his car, we believe the homeowner's policy covers that liability.” (Id., at p. 103, 109 Cal.Rptr. 811, 541 P.2d 123.) Finally, the court explained that Sabella's moving cause analysis was not “helpful” in Partridge because, unlike Sabella, “here both causes were independent of each other․” (Id., at p. 104, fn. 10, 109 Cal.Rptr. 811, 541 P.2d 123.)
6. (State Farm Fire & Cas. Co. v. Camara (1976) 63 Cal.App.3d 48, 54–55, 133 Cal.Rptr. 600 [“As Partridge held, the nonvehicle-related cause [the covered risk] must be independent of the vehicle-related cause [the excluded risk] in order for the liability to be covered by the homeowner's policy.”]; National Indemnity Co. v. Farmers Home Mutual Ins. Co. (1979) 95 Cal.App.3d 102, 108, 157 Cal.Rptr. 98 [“Negligence, to be covered by the homeowner's policy, must exist independently of the [excluded risk].”]; State Farm & Cas. Co. v. Kohl (1982) 131 Cal.App.3d 1031, 1036, 182 Cal.Rptr. 720 [“the question [is] ․ whether the postaccident conduct of [the insured] ․ was independent [of the excluded risk]”; Allstate Ins. Co. v. Jones (1983) 139 Cal.App.3d 271, 277, 188 Cal.Rptr. 557 [“only if the ‘liability of the insured arises from his [covered risk] conduct, and exists independently of [his excluded risk conduct]’ ․ will a general liability policy apply” (emphasis in original) ]; Safeco Ins. Co. v. Gilstrap (1983) 141 Cal.App.3d 524, 527, 190 Cal.Rptr. 425 [“the dispositive issue is whether the events giving rise to the insured's liability were exclusively related to the [excluded risk]”]; Hartford Fire Ins. Co. v. Superior Court (1983) 142 Cal.App.3d 406, 415, 191 Cal.Rptr. 37 [the covered risk must exist independently of the excluded risk “in order for liability to attach under a homeowner's policy”]; Underwriters Ins. Co. v. Purdie (1983) 145 Cal.App.3d 57, 68, 193 Cal.Rptr. 248 [quoting Partridge, supra, and Kohl, supra ]; Atlas Assurance Co. v. McCombs Corp. (1983) 146 Cal.App.3d 135, 147, 194 Cal.Rptr. 66 [“the crucial factor in Partridge was that the two causes of the injury were separate and independent of one another” (emphasis in original) ]; Ohio Casualty Ins. Co. v. Hartford Accident & Indemnity Co. (1983) 148 Cal.App.3d 641, 645, 196 Cal.Rptr. 164 [“Where two ․ separate and independent risks constitute concurrent proximate causes of an accident, the insurer is liable so long as one of the causes is covered by the policy”]; Daggs v. Foremost Ins. Co. (1983) 148 Cal.App.3d 726, 730, 196 Cal.Rptr. 193 [“in order for partridge to apply, there must be two negligent acts or omissions of the insured, one of which, independently of the excluded cause, renders the insured liable for the resulting injuries”]; Bader, California Liability Insurer's Duty to Defend: How Far Does it Extend? (1985) 52 Ins. Counsel J. 252, 253.)We recognize that a recent decision by division three of this court may be read to suggest “independence” is not a prerequisite to Partridge's concurrent proximate cause analysis. (Farmers Insurance Exchange v. Adams (1985) 170 Cal.App.3d 712, 216 Cal.Rptr. 287.) Initially, we note this aspect of Farmers appears to be dicta: A substantive discussion of the requirements of Partridge analysis is unnecessary to support the court's primary holding, namely, that Sabella analysis is not the exclusive test of coverage under a homeowner's insurance policy. Moreover, Farmers fails to recognize the contrary holdings of the above-cited cases, relying instead in large part on our decision in Premier and the Ninth Circuit's decision in Safeco Ins. Company of America v. Guyton (1982) 692 F.2d 551. Neither of these decisions, however, support Farmers' dicta: Premier authorized Partridge analysis without clearly requiring independence to be shown (post, at pp. 218–219); Guyton, on the other hand, does recognize independence is required, but misconstrues California law in its application (post, at pp. 217–218). Accordingly, we respectfully disagree with suggestions in Farmers that homeowner's insurance coverage will be found so long as a covered risk is simply a concurrent proximate cause of damage.
7. We acknowledge that in Partridge the Supreme Court cited language in Hughes v. Potomac Ins. Co., supra, 199 Cal.App.2d 239, 18 Cal.Rptr. 650 which does not explicitly reference the independence requirement. (Partridge, 10 Cal.3d at p. 105, 109 Cal.Rptr. 811, 514 P.2d 123.) However, when one reviews Hughes in light of the principles set forth in Partridge, it is apparent that independence was involved in the former case. In other words, the two alleged causes in that case were independent of each other, both in the sense that they had independent origins and in the sense that each alone could have been a proximate cause of the loss.In Hughes, a landslide left the insureds' house hanging over a thirty-foot cliff. It had been raining steadily for several weeks and the creek bordering the property had been rising dramatically up its banks, although it had not yet overflowed. The insured's policy excluded coverage from all losses caused by “surface waters, flood waters, ․ high water, or overflow of streams or bodies of water, all whether driven by wind or not.” (Id., 199 Cal.App.2d at p. 242, 18 Cal.Rptr. 650.) Conflicting expert testimony was offered regarding the issue of whether the landslide was caused by ground water pressure, caused either by the rain alone or by rain and by infiltration from the stream. The trial court found that the loss was caused by ground water pressure resulting from the rainfall alone, perhaps because the rule before Sabella was thought to be that any contribution at all by an excluded cause would prevent recovery. Three characteristics stand out. First, the high water and the ground water pressure were each independent of the other in that they each originated independently: although they were each caused by the same thing—rainfall—neither one caused or substantially contributed to the existence or strength of the other. Second, they were independent in that each by itself could have been a proximate cause of the loss: while they could have interacted in fact to cause the loss, neither alleged cause necessarily required the other to produce the loss. Finally, the two could have acted together simultaneously to cause the loss, just as the two independent concurrent proximate causes did in Partridge. Neither one can be said to have necessarily acted upon a condition created by the other, or to have propelled the other, or to have brought to fruition the potential for damage inherent in the other.To say this is nothing more than to say that the two alleged causes in Hughes were “independent” and could have been “concurrent,” “proximate” causes, as those terms might be used in the context of negligence. This is exactly the standard that Partridge later established, based on principles adopted from tort law. Critically viewed, Hughes was simply a case which involved a factual pattern of apparently interacting independent concurrent proximate causes. It was decided long before the Supreme Court confronted a similar situation in Partridge, thus explaining the trial court's strained factual determination.
8. The same court had previously found dependence on analogous facts. In National Indemnity Co. v. Farmers Home Mutual Ins. Co., supra, 95 Cal.App.3d 102, 157 Cal.Rptr. 98, the policyholder, while babysitting a five-year-old, allowed the child to abruptly exit her car and run into the street where he was killed by a passing automobile. The court properly recognized that independence is a prerequisite to Partridge analysis. In its application of the facts, however, the court concluded that the insured's negligent failure to supervise and control the child (a risk covered under her homeowner's liability policy) did not exist independently of “use” of the vehicle (an excluded risk). (Id., at pp. 108–109, 157 Cal.Rptr. 98.) In light of Kohl, supra, and subsequent cases, the way in which National Indemnity applied the independence test appears subject to question because the child could have just as easily run into the street and been killed in the accident without ever having been in the insured's vehicle.
9. The precise nature of the negligence is not set forth in the decision.
10. The following question sequence can be used to apply the foregoing analysis.C1-2ALL-RISK POLICY CAUSATION ANALYSIS C1-C2- C1AllegedC2AllegedC1CAUSE AC2CAUSE BC1Covered RiskC2Excluded Risk C1-C2- C1-2CAUSE IN FACT DETERMINATION 1. Are CAUSE A and CAUSE B both causes inIf yes, go to question 2. fact?If no, answer question 1A. 1A. Is CAUSE B a cause in fact?If no, COVERAGE EXISTS.If yes, COVERAGE IS DENIED. C1-2INDEPENDENT CONCURRING CAUSATION 2. Are CAUSE A and CAUSE B independentIf yes, COVERAGE EXISTS. causes (in other words, is there any wayIf no, go to question 3. the same loss could have occurred without both causes interacting)? C1-2DEPENDENT CONCURRING CAUSATIONC1-2(One Prime Efficient Moving Cause) 3. Did CAUSE A set CAUSE B in motion?If yes, COVERAGE EXISTS.If no, go to question 3A. 3A. Did CAUSE B set CAUSE A in motion?If yes, COVERAGE IS DENIED.Finally, we note that there may be some circumstances in which examination through question 3A still does not resolve the coverage issue, such as when two dependent causes simultaneously contribute to creating a loss, even though neither set the other in motion. We leave determination of that issue for a future case which presents such a situation. (See Gillis v. Sun Ins. Office, Ltd. (1965) 238 Cal.App.2d 408, 424, 47 Cal.Rptr. 868.)
SABRAW, Associate Justice.
ANDERSON, P.J., concurs.