Appeal from Superior Court, King (92-2-02787-9) County; Honorable Ann Schindler, Judge. Judgment Date: 9-8-93.
Guy, J., Durham, C.j., Dolliver, Smith, Madsen, Alexander, Sanders, J.j., concurring. Talmadge, J. (dissenting by separate opinion), Johnson, J., dissenting.
This case involves a dispute regarding coverage under a homeowners insurance policy. The policyholders, Mary and Duncan Findlay, own a summer cabin which is at the base of a steep slope on a beach in Snohomish County. In early 1991, the slope behind the cabin failed, sliding into the rear of the cabin and causing structural damage. The landslide was caused by rain and wind. The parties agree that heavy rainstorms provided the initial source of water penetration into the steep slope. Then high winds, generated by severe storms, caused large tree roots to loosen the soils on the slope. Subsequent rains penetrated the loose soils and the landslide occurred.
The Findlays had an all-risk homeowners insurance policy with United Pacific Insurance Company. In the "Perils Insured Against" section, the policy states:
We insure for risk of direct physical loss to the property described in Coverages A, B and C EXCEPT:
Coverage A, which is now at issue, provides insurance for
the dwelling. The "Exclusions" section of the policy states in relevant part:
WE DO NOT COVER LOSS RESULTING DIRECTLY OR INDIRECTLY FROM:
B. EARTH MOVEMENT TO PROPERTY DESCRIBED IN COVERAGES A . . . . DIRECT LOSS CAUSED BY, RESULTING FROM, CONTRIBUTED TO OR AGGRAVATED BY:
1. EARTHQUAKE, LANDSLIDE, MUDFLOW, EARTH SINKING, RISING OR SHIFTING[.]
WE DO NOT INSURE FOR LOSS TO PROPERTY DESCRIBED IN COVERAGES A . . . CAUSED BY ANY OF THE FOLLOWING. HOWEVER, ANY ENSUING LOSS NOT EXCLUDED OR EXCEPTED IN THIS POLICY IS COVERED.
1. WEATHER CONDITIONS, HOWEVER, THIS EXCLUSION ONLY APPLIES IF WEATHER CONDITIONS CONTRIBUTE IN ANY WAY WITH ANY EVENT EXCLUDED IN ITEMS A. THROUGH H. ABOVE TO PRODUCE THE LOSS[.]
The Findlays submitted a claim for the damage to the cabin to United Pacific. The insurer denied coverage on the basis that the weather conditions of rain and wind triggered earth movement to cause the damage and that such a loss was not covered due to the "earth movement" and "weather conditions" exclusions. The Findlays filed an action for a declaratory judgment arguing that these exclusions violated the "efficient proximate cause" rule and should not be enforced.
The parties agreed there was no issue of fact and filed cross motions for summary judgment. The parties agreed that the "efficient proximate cause" of the loss was the
rain and wind. The trial court granted the insurer's motion and dismissed the Findlays' action.*fn1
Division One of the Court of Appeals affirmed the trial court's summary judgment. Findlay v. United P. Ins. Co., 78 Wash. App. 17, 895 P.2d 32, review granted, 127 Wash. 2d 1021 (1995). We accepted review and now affirm the Court of Appeals' decision.
Does the efficient proximate cause rule apply to mandate coverage when an insurance policy excludes coverage for the peril which was the proximate cause of the loss?
In 1983, this Court adopted the "efficient proximate cause" rule. Graham v. Public Employees Mut. Ins. Co., 98 Wash. 2d 533, 538, 656 P.2d 1077 (1983). This rule addresses the issue of whether an all-risk insurance policy covers a loss caused by two or more perils when one of the perils is excluded and the other peril is covered. Graham explained that:
Where a peril specifically insured against sets other causes in motion which, in an unbroken sequence and connection between the act and final loss, produce the result for which recovery is sought, the insured peril is regarded as the "proximate cause" of the entire loss.
It is the efficient or predominant cause which sets into motion the chain of events producing the loss which is regarded as the proximate cause, not necessarily the last act in a chain of events.
Graham, 98 Wash. 2d at 538 (citations omitted). See also 5 John A. Appleman & Jean Appleman, Insurance Law
and Practice § 3083, at 309 (1970); 18 Ronald A. Anderson, Couch on Insurance § 74:709, at 1019 (2d rev. ed. 1983). The identification of a certain event as the efficient proximate cause of a loss is usually a question of fact. Graham, 98 Wash. 2d at 539. However, in the present case, the Findlays and United Pacific agree that the efficient proximate cause of the loss was the weather conditions of rain and wind.
In the cases since Graham, we have consistently adhered to the proximate cause rule. Villella v. Public Employees Mut. Ins. Co., 106 Wash. 2d 806, 815, 725 P.2d 957 (1986); Safeco Ins. Co. v. Hirschmann, 112 Wash. 2d 621, 625, 773 P.2d 413 (1989); McDonald v. State Farm Fire & Casualty Co., 119 Wash. 2d 724, 731, 837 P.2d 1000 ...