Most states enforce anticoncurrent causation provisions, as we have described in our summary of such provisions. Recently, the Court of Appeals of the State of Oregon determined that a policy was ambiguous despite the fact that the insureds stipulated that collapse caused the damage, and the policy excluded loss caused by collapse with anticoncurrent preamble language. Chou, et al. v. Farmers Ins. Exch., 2012 Ore. App. LEXIS 1345 (Nov. 21, 2012). In Chou, the insureds’ home was damaged when a neighbor’s home and cars slid down an embankment and collided with the insureds’ home. Plaintiffs stipulated that “a collapse caused physical injury between their home and the neighbor’s vehicle.” It is unclear from the opinion whether the insureds’ house collapsed as a result of the neighbor’s property colliding with it, or whether the neighbor’s house collapsed and then slid down the embankment.
The policy excluded loss caused by collapse, which exclusion was preceded by anticoncurrent causation language:
We do not insure loss or damage directly or indirectly caused by, arising out of or resulting from collapse . . . [s]uch loss or damage is not covered regardless of other covered events in sequence with the excluded loss or damage.
Plaintiffs insureds claimed that the loss was covered regardless of the collapse exclusion based on an exception to an exclusion for damage caused by a vehicle, which stated as follows:
Aircraft or vehicles.
We do not insure loss or damage directly or indirectly caused by, arising out of or resulting from aircraft or vehicles unless such loss or damage is caused by or results from direct, actual physical contact by an aircraft, or any refuse from an aircraft, or a vehicle with covered property or with a building or other structure containing the covered property.
The trial court determined that the policy was ambiguous, and should be construed against Farmers. On appeal, despite the fact that Plaintiffs stipulated that collapse caused the damages, the Court of Appeals stated that this stipulation does not resolve the issue.
With little analysis, the Court of Appeals stated that there were two reasonable interpretations, rendering the policy ambiguous, and therefore agreed with the trial court that the policy should be construed against Farmers:
the parties demonstrate that there are two reasonable interpretations of the policy: (1) that the losses are covered if they are directly caused by physical contact with the neighbor’s vehicle and (2) [*8] that the losses are not covered because it resulted from collapse. We have considered and reject Farmers’ contention that the “concurrent cause” provision of the policy unambiguously resolves that conflict. The trial court concluded that the insurance policy is ambiguous. We agree: the policy is ambiguous and we construe it against the drafter, Farmers.
Id. at *7-8.
Research indicates that this is the first time that an Oregon court has issued a published decision regarding anticoncurrent causation language. The Court of Appeals appeared to ignore that courts have generally held that exclusions must be read seriatim, and exclusions (and exceptions therein) cannot create coverage where coverage otherwise does not exist. Given the weight of national authority enforcing anticoncurrent causation provisions, the decision may be appealed to the Oregon Supreme Court.