{"id":887925,"date":"2016-03-29T16:20:53","date_gmt":"2016-03-29T22:20:53","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=887925"},"modified":"2016-03-29T16:20:53","modified_gmt":"2016-03-29T22:20:53","slug":"second-circuit-holds-ambiguity-of-phrase-caused-only-by-permits-coverage-where-uncovered-perils-contribute-to-property-damage","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/second-circuit-holds-ambiguity-of-phrase-caused-only-by-permits-coverage-where-uncovered-perils-contribute-to-property-damage\/","title":{"rendered":"Second Circuit Holds Ambiguity of Phrase \u201cCaused Only By\u201d Permits Coverage Where Uncovered Perils Contribute to Property Damage"},"content":{"rendered":"<p>Darren S. Teshima, Harry J. Moren and Alison K. Roffi | March 23, 2016<\/p>\n<p>Imprecise usage of the word \u201conly\u201d in policy language may create ambiguities favorable to policyholders. The Second Circuit recently agreed with policyholders that their homeowners\u2019 policy, which insured for <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/making-sure-the-property-damage-check-is-for-100-of-the-loss\/\" target=\"_blank\">property damage<\/a> involving the collapse of a part of a building \u201c<strong>caused only by<\/strong> one or more of the following\u201d specifically named perils, provided coverage so long as a collapse was caused by one of the enumerated perils, regardless of whether a non-enumerated peril also contributed to the collapse. In an unpublished opinion, the Court rejected the insurer\u2019s interpretation, which the district court had accepted, that coverage was limited to <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/ohio-supreme-court-claims-for-property-damage-to-insureds-own-work-caused-by-defective-workmanship-not-covered-under-cgl-insurance-policies\/\" target=\"_blank\">collapses<\/a> exclusively caused by one of the enumerated perils.<\/p>\n<p>The Court found not only that both interpretations of the plain language were reasonable, which should lead to a resolution of the ambiguity in the policyholder\u2019s favor, but further determined that several considerations supported the homeowners\u2019 interpretation. First, the Court explained that under settled New York case law on insurance contracts, the word \u201ccaused\u201d implicates the concepts of proximate causation: if a <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/what-is-direct-physical-loss-that-results-from-a-covered-peril\/\" target=\"_blank\">covered peril<\/a> is the predominant cause of the loss, the concurrent operation of a non-covered peril will not defeat coverage. (See our recent coverage of the Fifth Circuit\u2019s application of the concurrent-cause doctrine under Texas law.) The policy did not indicate any intent to override this established rule by drafting reasonably clear language. Moreover, the Court pointed out that the insurer obviously knew how to draft language to that effect because another provision in the same policy included a so-called \u201canti-concurrent cause\u201d claims, which excluded certain perils from coverage \u201cregardless of any other cause or event contributing concurrently.\u201d Additionally, the Court observed that it would be reasonable for a homeowner whose home collapsed predominantly due to a listed peril to expect coverage.<\/p>\n<p>The Court also dismissed the insurer\u2019s contention that the charge from the district court to the jury was proper because the jury instructions used the same \u201ccaused only by\u201d language as the policy. Rather, the Court found that the actual use of that phrase in the jury instructions either improperly altered the phase\u2019s context from that in the policy or else preserved the ambiguity and impermissibly relegated the task of contract interpretation to the jury.<\/p>\n<p>This decision reinforces&#8230;<\/p>\n<p><a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=6db82dc5-22fe-4ae7-859a-a500fae5ac69&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2016-03-28&amp;utm_term=\" target=\"_blank\">To finish reading this article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Darren S. Teshima, Harry J. Moren and Alison K. Roffi | March 23, 2016 Imprecise usage of the word \u201conly\u201d in policy language may create ambiguities favorable to policyholders. The Second Circuit recently agreed with policyholders that their homeowners\u2019 policy, which insured for property damage involving the collapse of a part of a building \u201ccaused&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/second-circuit-holds-ambiguity-of-phrase-caused-only-by-permits-coverage-where-uncovered-perils-contribute-to-property-damage\/\">Continue reading <span class=\"screen-reader-text\">Second Circuit Holds Ambiguity of Phrase \u201cCaused Only By\u201d Permits Coverage Where Uncovered Perils Contribute to Property Damage<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[3],"tags":[23,56],"class_list":["post-887925","post","type-post","status-publish","format-standard","hentry","category-insurance-claims","tag-insurance-coverage","tag-property-damage","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Second Circuit Holds Ambiguity of Phrase \u201cCaused Only By\u201d Permits Coverage Where Uncovered Perils Contribute to Property Damage - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"description\" content=\"their homeowners\u2019 policy, insured for property damage involving the collapse of a part of a building \u201ccaused only by one or more of the following\u201d\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/second-circuit-holds-ambiguity-of-phrase-caused-only-by-permits-coverage-where-uncovered-perils-contribute-to-property-damage\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Second Circuit Holds Ambiguity of Phrase \u201cCaused Only By\u201d Permits Coverage Where Uncovered Perils Contribute to Property Damage - Advise &amp; Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"their homeowners\u2019 policy, insured for property damage involving the collapse of a part of a building \u201ccaused only by one or more of the following\u201d\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/second-circuit-holds-ambiguity-of-phrase-caused-only-by-permits-coverage-where-uncovered-perils-contribute-to-property-damage\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise &amp; 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