Readers of this blog may note that we have previously discussed the topic of anti-concurrent causation clauses in various jurisdictions around the country (see here, here, and here). As a quick reminder, an anti-concurrent causation clause is that prefatory language that precedes a list of excluded perils, and that generally provides that the policy “does not insure loss or damage directly or indirectly caused by, arising out of or resulting from” those enumerated perils, “regardless of any other cause or event contributing concurrently or in any sequence to the loss.”
In the wake of Hurricane Sandy, we highlighted an effort by a consumer group to block application of anti-concurrent causation clauses for Sandy losses on the grounds that “flooding” is typically an excluded peril, and that, were the clause to be applied, a large portion of the damage that occurred as a result of Sandy would not be covered under a typical first-party property policy. Now, more than three-and-a-half years after Sandy, more and more cases brought by homeowners against insurers are winding their way through the court system, and courts in those areas impacted by Sandy are being presented with important questions of policy interpretation on a host of issues, including the potential application of anti-concurrent causation language.
Such was the case in a recently decided federal lawsuit in New Jersey. In Keelen v. QBE Ins. Corp., 2016 U.S. Dist. LEXIS 55895 (D.N.J. Apr. 27, 2016), Plaintiffs owned a residential beach property located in Ortley Beach, New Jersey. The insured property suffered significant damage during Sandy that was at least partially caused when the house was knocked off of its foundation. Plaintiffs’ claim for wind damage was denied because the damage attributable to wind fell below the wind deductible, and because the insurer determined that the vast majority of the damage was not covered due to the policy’s exclusion for “water,” which included “flood,” “surface water,” “storm surge,” and “waterborne materials,” and which was preceded by an anti-concurrent causation clause.
Plaintiffs brought suit, and the defendant insurer moved for summary judgment. During the briefing of that motion, the parties appear to have agreed that a substantial portion of the damage to the insured property occurred when it was impacted by a neighbor’s house that had apparently escaped from its foundation and been pushed by the rising water onto Plaintiffs’ property. In granting the insurer’s motion for summary judgment, the Court noted that pre-Sandy New Jersey courts (at both the state and federal level) had upheld application of anti-concurrent causation clauses. The Court found that “Plaintiffs have not offered any evidence showing that storm surge did not, at least indirectly, cause the losses at issue,” and therefore concluded that the claim was not covered under the policy.
The Keelen decision is an important recognition of the continued applicability and enforceability of anti-concurrent causation language in New Jersey.