Opinion
No. 96 C 0275
August 22, 2000
MEMORANDUM OPINION AND ORDER
Before the Court are cross-motions for summary judgment in the above-captioned insurance dispute. Plaintiff insuree maintains that damage to several of its schools' roofs on January 18, 1994 is covered under the all-risk insurance policy issued by the Defendant. Defendant insurer contends that the damage to the roofs was not a fortuitous loss and therefore, is not covered by the policy at issue. For the following reasons, the Court GRANTS Plaintiff's motion for summary judgment and DENIES Defendant's motion for summary judgment.
I. FACTS
The following facts are taken from the parties' statements under former Local Rule 12 and from the exhibits submitted in support of the parties' briefs. Except as noted, the facts in this case are not in dispute.
A. Shatter of the District's roofs
On January 18, 1994, seven schools in Crete-Monee School District ("the District") suffered major damage when large portions of their roofs were destroyed in sub-zero temperatures by a phenomenon known as "shatter." The roofs were all installed in 1980 or 1981 and were all constructed with unreinforced single-ply polychloride vinyl membrane, or "PVC" membrane. Def.'s 12(M) ¶¶ 1(b),1(c). PVC membrane contains a certain amount of plasticizer, which makes a PVC roof slightly elastic. DuPuis Aff. ¶ 2. This elasticity allows the membrane to safely expand and contract in response to temperature changes. See id. ¶ 4.
The seven schools in question are Crete High School, Deer Creek Junior High School, Balmoral Elementary School, Crete Elementary School, Hickory Elementary School, Monee Elementary School, and Talala Elementary School. In its briefs, Defendant Indiana Insurance Company ("Indiana") states that six roofs shattered on January 18, 1994 and that the seventh roof shattered a month later, on February 15, 1994. However, Defendant cites no evidence to support the later shatter of the seventh roof; and the District maintains with support in the record that all seven shatters occurred on January 18, 1994. See Def.'s 12(M) ¶¶ 1(1), 1(m); Pl.'s 12(N) ¶¶ 1(1), 1(m); Pl.'s Resp. App. 5, Kruse Aff. ¶ 2; Pl.'s Motion for Summary Judgment App. 4, Kruse Aff. ¶ 2. The Court accepts Plaintiff's single-date version of events in resolving the present motions for summary judgment.
Unfortunately, plasticizer tends to leak out of a PVC membrane, making a PVC roof thinner, lighter, and gradually more brittle over time. Id. ¶ 3. Eventually, a PVC roof loses so much plasticizer that in a sudden drop of temperature, the membrane may crack uncontrollably in a tree-like pattern. See id. ¶¶ 4-5. This cracking phenomenon, called "shatter," destroyed large segments of roof on the seven schools in this case when the aging roofs were subjected to a temperature of 20° Fahrenheit, See Pl's 12(M) ¶ 1(f); Pl.'s Resp. App. 4.
B. Maintenance history of the District's roofs
At the time the roofs were installed and throughout the events described herein, Gustav Kruse ("Kruse") was the District's Director of Buildings and Grounds. Kruse Dep. at 115; Pl.'s Resp. App. 5, Kruse Aff. ¶ 3. Six of the roofs were manufactured under the name Trocal, and the remaining roof was manufactured under the name Braas. Def.'s 12(M) ¶ 1(b); DuPuis Mf. ¶ 2. So far as the record reflects, the same contractor installed all seven roofs. The roofs carried ten-year manufacturer's warranties that expired in 1990 or 1991. Def.'s 12(M) 6 1(d). However, Trocal told Kruse that the PVC roofs had serviceable lives of 15-20 years. Kruse Dep. at 114; Pl.'s Response App. 5, Kruse Aff. ¶ 5.
After the roofs were installed, Kruse's subordinates inspected them regularly. Def.'s 12(M) ¶ 1(e); Kruse Dep. at 32-33. Kruse hired roofing contractors to make patches and minor repairs as needed. Pl.'s Resp. App. 5, Kruse Aff. ¶ 4. At some point after 1990 or 1991, when the roofs' warranties expired, Kruse noticed signs of deterioration in the roofs. Specifically, Kruse observed some small tears in the PVC membranes, some shrinkage of the membranes, and some places where the membranes appeared taut. Def.'s 12(M) ¶ 1(f); Pl.'s 12(N) ¶ 1(f). In addition, in November 1991, a contractor hired to repair one of the roofs refused to walk on the roof during the cold weather because he said that he was afraid of damaging the roof. Def.'s Motion for Summary Judgment, Ex, 9. Although no contractor ever warned Kruse that the District's roofs were in danger of shattering, Kruse was nevertheless concerned about the age and condition of the roofs, especially because their warranties had expired. Kruse Dep. at 114, 117-18, 123, 207; Pl.s Resp. App. 5, Kruse Aff. ¶ 4. Accordingly, Kruse requested and received permission from the District to hire Professional Service Industries, Inc. ("PSI") to conduct a survey of the District's roofs. Def.'s 12(M) ¶ 1(h); see also Kruse Dep. at 111-12. The PSI survey was conducted between May 13 and 17, 1993 and was summarized in a three-volume report ("the PSI report" or "the report") dated July 14, 1993. Def.'s Resp. App. B; Pl.'s Motion for Summary Judgment App. 2, Ex. D.
It appears that Kruse was completely unfamiliar with the shatter phenomenon until sometime in the Fall of 1993, and it is unclear how Kruse first learned of it. See Pl.'s 12(N) ¶¶ 1(f), 1(j); Kruse Dep. at 139-40; Pl.'s Resp. App. 5, Kruse Aff. ¶ 4. At no other time in Kruse's 18 years of District employment did a PVC roof shatter. Pl.s Resp. App. 5, Kruse Aff. ¶ 4.
The PSI report did not indicate that the District's roofs were in danger of shattering. Pl.'s Motion for Summary Judgment App. 2, Ex. D, PSI Report secs. 1-2; Pl.'s Resp. App. 5, Kruse Aff. ¶ 7. However, every section of roof that was destroyed on January 18, 1994 was rated as "poor" or as "fair-poor" in the report. Def.'s 12(M) ¶ 1(i). These ratings were supplemented by numerical ratings between one ("failed" roof in need of "immediate" replacement) and ten (new roof with "no observed deficiencies"). Pl.'s Motion for Summary Judgment App. 2, Ex. D, PSI Report sec. 2. The roof sections destroyed on January 18, 1994 ranged numerically in their "overall" conditions from 2 (Crete-Monee High School roof section E) to 5 (Hickory Elementary School roof section B).Id. The PSI report recommended that the nine sections at issue be replaced over a span of several years, starting with Crete-Monee High School roof section E (replacement recommended within six to twelve months) and ending with Hickory Elementary School roof sections A and B (replacement recommended within five to seven years). Id.
Nine roof sections shattered on the seven buildings. The parties refer to the shattered sections as follows: Balmoral Elementary School roof section B, Crete Elementary School roof section D, Crete-Monee High School roof sections A and B, Deer Creek Junior High School roof section A, Hickory Elementary School roof sections A and B, Monee Elementary School roof section C, and Talala Elementary School roof section G.
Notably, many of the 48 roof sections in the District that were not harmed on January 18, 1994 were rated in worse condition in the PSI report than the nine roof sections that shattered. See id. In a ranking of repair priority of the 57 roof sections surveyed, the nine shattered sections were ranked as follows:
Roof section Priority (1-57)
Talala Elementary School roof section G 1 Crete-Monee High School roof section E 8 Balmoral Elementary School roof section B 14 Deer Creek Junior High School roof section A 20 Hickory Elementary School roof section A 25 Hickory Elementary School roof section B 33 Monee Elementary School roof section C 35 Crete Elementary School roof section D 42 Crete-Monee High School roof section A 45
Id. Similarly, when compared to other undamaged roof sections on the same building, the nine shattered sections were not necessarily in the worst condition. In other words, the weakest portion of each roof did not necessarily shatter. For example, the PSI report recommended that Balmoral Elementary School roof section A be replaced in six to twelve months (with a District-wide priority of 7), yet section B of that roof shattered. Section B was slated for replacement in two years (with a District-wide priority of 14). With respect to Crete Elementary School, the PSI report recommended that sections G, H, I, and J be replaced in six to twelve months (with District-wide priorities of 2, 3,9, and 10), yet none of these sections shattered. Instead, section D shattered, which was slated for replacement in three to five years (with a District-wide priority of 42). Id., PSI Report secs. 1-2.
Based on the PSI report and with the ongoing advice of PSI, Kruse created a five-year plan for repair and replacement of the District's roofs. Kruse Dep. at 207; Pl.'s Resp. App. 5, Kruse Aff. ¶ 5. The plan was scheduled to begin in the Summer of 1994 with the replacement of five roof sections, only one of which shattered on January 18, 1994. See Pl.'s Resp. App. 5, Kruse Aff. ¶ 5, Ex. 1. Kruse presented his plan to the Board of Education on January 3, 1994, just two weeks before the roofs shattered, but it is unclear whether the Board officially adopted the plan at that time. Kruse Dep. at 221-22. There is no transcript of the January 1994 Board meeting in evidence, but the local newspaper reported after the meeting that the District's roofs were in immediate need of repair. See Def.'s Resp. App. E. The paper warned that the roofs were 17 years old (they were actually 12-13 years old at the time the article was printed) and quoted Kruse as saying that the roofs might shatter. Id. Kruse does not appear to have any reliable recollection of what he said at the meeting. Kruse Dep. at 123, 138-41, 222-28. In any event, Kruse's five-year plan was abandoned before it was actually implemented, when the roofs shattered and required immediate attention.
In a letter dated November 8, 1993, PSI roof consultant Mark A. Breitner recommended that the following roof sections be replaced in the first year of Kruse's five-year plan: Crete-Monee High School section F (undamaged by shatter; ranked #4 in District-wide priority); Crete-Monee High School section P (undamaged by shatter, ranked #6 in District-wide priority); Crete-Monee High School section E (shattered, ranked #8 in District-wide priority); Balmoral Elementary School section A (undamaged by shatter, ranked #7 in District-wide priority); and Crete Elementary School section J (undamaged by shatter, ranked #10 in District-wide priority). Pl.'s Motion for Summary Judgment App. 2, Ex. D, PSI Report sec. 2; Pl.'s Motion for Summary Judgment App. 4, Kruse Aff. ¶ 6; Pl.'s Resp. App. 5, Ex. 1.
The newspaper reports are inadmissible hearsay as to the actual condition of the roofs. It appears that Indiana submits them as evidence of what Kruse, and through Kruse the District, knew about the condition of the roofs shortly before the January 18 shatters. See Def.'s 12(M) ¶¶ 1(j), 1(k). However, Kruse's deposition and affidavits do not support the newspaper's reports in that regard. See Pl.'s 12(N) ¶¶ 1(j), 1(k); Kruse Dep. at 139-40; Pl.'s Resp. App. 5, Kruse Aff. ¶ 4.
C. Denial of the District's insurance claims
Indiana issued an all-risk business insurance policy to the District effective September 1, 1993. See Pl.'s Resp. App. 2. The District filed claims under this policy for the losses it incurred when the roofs shattered. Indiana hired Rene DuPuis ("DuPuis"), of Structural Roofing, Inc., to investigate the cause or causes of the District's losses. DuPuis Aff. ¶ 1. DuPuis tested PVC roofing materials from the shattered roofs and concluded that the roofs had outlived their serviceable lives. Id.; DuPuis Dep. at 194; Def.'s Motion for Summary Judgment Ex. 8. DuPuis admits that the cold temperature caused stress on the roofs on the day the roofs shattered but maintains that the "primary"cause of the shatters was the deteriorated condition of the roofs. DuPuis Dep. at 204,209,285,288, 290-91, 294; DuPuis Aff. ¶ 6. According to DuPuis, in a "non-deteriorated condition," PVC membrane should withstand temperatures below -20° Fahrenheit. DuPuis Aff. ¶ 7; see also DuPuis Dep. at 285. On the other hand, as the Court understands DuPuis' opinion, even an old, deteriorated roof will not shatter in warm temperatures. See DuPuis Dep. at 204, 294.
There are several references in the record to inappropriate claim forms being submitted by the District to Indiana. However, neither party suggests that, for the court's purposes here, there are any such procedural issues that need to be resolved.
The prior deterioration of the shattered roofs is important because Indiana's policy excludes from coverage any losses caused by deterioration. Indian's policy provides in relevant part:
B. EXCLUSIONS
* * *
2. We will not pay for loss or damage caused by or resulting from any of the following:
* * * d. (1) Wear and tear;
(2) Rust, corrosion, fungus, decay, deterioration, hidden or latent defect or any quality in property that causes it to damage or destroy itself;
(3) Smog;
(4) Settling, cracking, shrinking or expansion;
* * *
("§ B(2)(d)"). Pl.'s 12(M) ¶ 1(c); Pl.'s Resp. App. 2 (emphasis added).
The extremely cold temperature on the day of the shatters is important because Indiana's policy does not, on its face, exclude from coverage those losses caused concurrently by weather conditions and deterioration. The policy does, however, expressly exclude from coverage certain other losses where weather is a concurrent cause of the loss:
B. EXCLUSIONS
* * *
3. We will not pay for loss or damage caused by or resulting from any of the following.
a. Weather conditions. But this exclusion only applies if weather conditions contribute in any way with a cause or event excluded in paragraph 1 above [excluding losses caused by ordinance of law, earth movement, governmental action, nuclear hazard, off-premises services, war and military action, and water] to produce the loss or damage.
* * *
("§ B(3)(a)"). Pl.'s 12(M) ¶ 1(c); Pl.'s Resp. App. 2 (emphasis added).
Finally, the policy indicates that "paragraph one" exclusions (ordinance of law, earth movement, governmental action, nuclear hazard, off-premises services, war and military action, and water) apply "regardless of any other cause or event that contributes concurrently or in any sequence to the loss." Pl.'s 12(M) ¶ 1(c); Pl.'s Resp. App. 2. This language is not included in connection with § B(2)(d).
DuPuis' findings led Indiana to deny the District's claims for the losses it incurred in repairing and replacing its shattered roofs, Indiana did pay for damages to the interiors of the buildings, but argues that the $709,000.00 spent by the District to repair the roofs was an inevitable loss that was not intended to be covered by the policy. Because all-risk insurance policies cover only fortuitous losses as a matter of law, Indiana argues, the Court need not interpret the policy's language in order to resolve the coverage issue in Indiana's favor. The District sues Indiana to recover its repair and replacement costs, arguing that the weather was a concurrent contributory cause of the January 1994 shatters and that such a cause brings its losses within the ambit of the all-risk policy regardless of the policy's exclusion of deterioration losses.
II ANALYSIS
Federal Rule of Civil Procedure 56 mandates the entry of summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact exists for trial when, in viewing the record and all reasonable inferences drawn from it in a light most favorable to the non-moving party, a reasonable jury could return a verdict for the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "[A] party opposing a properly supported motion for summary judgment may not rest upon mere allegation or denials of his pleading, but must set forth specific facts showing that there is a genuine issue for trial." Id. at 256.
A. Fortuity
The Court first addresses the basis of Indiana's motion for summary judgment. Indiana argues that the District's loss in this case was not fortuitous and thus, not an insurable risk. The question of fortuity is a legal question properly addressed by the court. Mattis v. State Farm Fire Cas. Co.,454 N.E.2d 1156, 1163 (Ill.Ct.App. 1983); Board of Educ. of Maine Township High Sch. Dist. 207 v. International Ins. Co., 684 N.E.2d 978, 981 (Ill.Ct.App. 1997)
The parties agree that Illinois law governs the parties' dispute.
A loss is fortuitous when it happens "by chance or accident, occurring unexpectedly or without known cause; [or when it is] accidental and undesigned." Mattis, 454 N.E.2d at 1163 (citing Black's Law Dictionary (Rev. 4th ed. 1968)); see also Board of Educ., 684 N.E.2d at 981 (citing Black's Law Dictionary 654 (6th ed. 1990)). Indiana correctly points out that the all-risk policy in this case, like any other all-risk policy, covers only those losses that were actually risked by the parties.Mattis, 454 N.E.2d at 1163. A loss that was, so far as the parties knew, an inevitable certainty at the time of contracting is not fortuitous and will not be covered by the resulting contract. Id. Accordingly, the Court must look to what the parties knew at the time of contracting to determine whether or not a loss was fortuitous — hindsight does not "provide an adequate basis to remove the loss from the ambit of fortuity as contemplated by the all risk policy." Id. at 1164 (citingEssex House v. St. Paul Fire Marine Ins. Co., 404 F. Supp. 978 (S.D. Ohio 1975)).
Applying these principles, courts have found the fortuity requirement satisfied where corrosion damage was caused by the improper use of a reactor five years after its owners were warned that the reactor's serviceable life was nearing an end, Arkwright-Boston Mfr. Mut. Ins. Co. v. Wausau Paper Mills Co., 818 F.2d 591, 593 (7th Cir. 1987); where the collapse of brick facing was caused by a number of observable and unobservable defects in the building's design and construction, and where the collapse was inevitable but the timing of the collapse was unforesceable, Essex House, 404 F. Supp. at 991-92; and where design defects caused an unavoidable structural failure at a mining facility, but where the failure surprised the facility's engineers because of their miscalculations, Compagnie des Bauxites de Guinee v. Insurance Co. of N. Am., 724 F.2d 369,372 (3d Cir. 1983). In Mattis v. State Farm Fire Cas. Co., the court determined that the failure of a basement wall was fortuitous because neither the insured nor the insurer, at the time the policy was issued, suspected that a design defect and earth movement would together cause the failure. 454 N.E.2d at 1164. The court considered the concurrent nature of causes as part of its analysis:
We cannot say . . . that the loss . . . was inevitable or certain to occur . . . other homes were built with concrete block foundations without foundation failure. . . . It is possible to conclude that but for [an] interaction and contribution of causes the event may never have occurred. But it is not possible to conclude that absent one cause the other cause would have by itself brought about the loss.Id. (citing Vormelker v. Oleksinski, 199 N.W.2d 287 (Mich.Ct.App. 1972)).
Like the failed concrete block foundation in Mattis, there is nothing inherently defective in a PVC roof such that failure is inevitable. Two buildings in the District had PVC roofs that did not shatter. Even if the Court considers factors such as age and level of deterioration, there is no reliable pattern of shatter in this case which indicates that, given a certain amount of deterioration, a PVC roof will inevitably shatter. Indiana's expert states that deterioration was the primary cause of the shatters but does not state that the shatters were certain to occur because of the deterioration. Furthermore, if the Court considers temperature — and assumes as Indiana insists that a mild winter is unheard of in Chicago — there is still no reliable pattern of shatter in this case which establishes, that given a certain degree of cold, deteriorated PVC roofs are certain to shatter.
The facts of this case show that shatter is caused by the combination of deterioration and cold temperature and, to some degree, pure chance. Nine sections of roof in the District all failed on the same cold day, as one would expect if temperature is a cause of shatter. All of the shattered roofs were 12-13 years old and were deteriorated to some degree, as one would expect if deterioration is a cause of shatter. But the facts also demonstrate that some deteriorated roofs did not shatter and that some severely deteriorated sections of roof survived while stronger sections failed. One would expect such "random selection" only in an event that happens "by chance or accident, occurring unexpectedly or without known cause." The Court does not have the benefit of any wider statistics on the likelihood of aged PVC roofs shattering and has no expert opinion indicating that the shatters were destined to occur. The Court declines to reach such a conclusion based on the current record.
Another compelling reason exists to reject Indiana's argument that the shatters were not fortuitous. Even if the Court could say in hindsight that the deteriorated roofs were certain to shatter, there is no reason to believe that the parties expected the shatters at the time the policy was issued on September 1, 1993. It is not clear that Kruse understood what the term "shatter" meant at that time, and even if he was familiar with the term, there is no evidence that he believed the District's roofs were certain to shatter due to their conditions. There is no mention of shatter in the PSI report, which was guiding the District's roof repair and replacement decisions. That report, in fact, indicated that several of the shattered sections had years of serviceable life remaining, and there is no evidence in the record indicating that Kruse believed otherwise in September 1993. There is similarly no evidence that Indiana viewed the shatter of PVC roofs as an uninsurable certainty and no mention of the supposedly "inevitable" phenomenon in the policy itself.
The fact that the roofs eventually would have failed from deterioration unless replaced by the District is a red herring in the fortuity analysis — all roofs of course must be replaced in time. It was in one sense stroke of good luck for the District that the shatters occurred when many of the roofs were nearing the end of their serviceable lives. As explained below, Indiana accepted this risk by failing to expressly exclude it in the insurance policy issued to the District.
For the foregoing reasons, the Court holds that the January 18, 1994 shatters were fortuitous incidents which were unforeseen by the parties at the time they entered into the insurance contract. Accordingly, the shatters are covered by the all-risk policy unless they are expressly excluded by its terms, as discussed below.
B. Construction of the policy
The construction of an insurance policy is a legal matter properly considered by the court. Board of Educ. of Maine Township High Sch. Dist. 207 v. International Ins. Co., 684 N.E.2d 978, 981 (Ill.Ct.App. 1997) (citing Lapham-Hickey Steel Corp. v. Protection Mut. Ins. Co., 655 N.E.2d 842 (Ill. 1995)). "To determine the meaning of the policy's words and the intent of the parties, the court must construe the policy as a whole, with due regard to the risk undertaken, the subject matter that is insured and the purposes of the entire contract." Id. The language of the policy should be given its "common and ordinary meaning," and if the language is clear and unambiguous, the court must give it effect. Id.; Arkwright-Boston, 818 F.2d at 593-94. In the case of an all-risk policy, "recovery . . . will, as a rule, be allowed for all fortuitous losses not resulting from misconduct or fraud, unless the policy contains a specific provision expressly excluding the loss from coverage." Board of Educ., 684 N.E.2d at 981; Sentinel Management Co. v. New Hampshire Ins. Co., 563 N.W.2d 296, 299 (Minn.Ct.App. 1997).
The construction of the present insurance policy is straightforward, and Indiana has not objected to the District's construction. While deterioration damage is excluded by § B(2)(d), the policy appears to cover weather conditions when they act concurrently with deterioration to cause a loss. Unlike the paragraph one exclusions, the paragraph two exclusions (including § B(2)(d)) are not excluded "regardless of any other cause or event that contributes concurrently or in any sequence to the loss." As the District points out,
[b]ecause there is no specific reference to exclusion of concurrent or contributory causes of loss in Paragraph 2, as there is in Paragraph 1, reading the two paragraphs together creates the inescapable implication that, as to the enumerated causes of loss in Paragraph 2, a contributory cause of loss that occurs concurrently and is not otherwise excluded, is a covered loss.
Plaintiff's Motion for Summary Judgment, Memorandum at 6.
The term "weather conditions" is commonly understood to include changes in temperature. Because weather conditions are excluded "only if [they) contribute in any way with a cause or event excluded in paragraph 1 above" and none of the causes or events in listed in paragraph 1 occurred, the Court finds that temperature is covered when it is a concurrent cause of loss with deterioration. The same result was reached with nearly identical provisions in Pace Properties. Inc. v. American Mfrs. Mut. Ins. Co., 918 S.W.2d 883 (Mo.Ct.App. 1996).
C. Causation
Both parties agree that two forces acted on the District's roofs to cause the shatter. First, the roofs were deteriorating and losing plasticizer. Second, the extreme cold on January 18, 1994 made the PVC membranes contract. The parties differ, however, on the proper application of Indiana's insurance policy to these facts. The District argues that the presence of a covered cause (weather) creates coverage as a matter of law even in the presence of an excluded cause (deterioration). Indiana argues that either the court or a jury must determine which cause was the "efficient" or dominant cause and then determine coverage with reference to that cause alone (in Indiana's opinion, deterioration was the dominant cause in this case and hence the loss is excluded).
In its brief responding to the District's motion for summary judgment, Indiana argues that the temperature was a "circumstance" rather than a cause of the shatter, but the distinction collapses when Indiana's own expert states otherwise:
Q. Assuming that the material is the primary cause as far as you're concerned —
A. Yes.
Q. — in a shatter —
A. Yes.
Q. The low temperature is a contributing cause, is it not?
A. Yes.
DuPuis Dep. at 204.
Illinois law supports the District's approach, which is the approach adopted by the Court today. In Mattis v. State Farm Fire Cas. Co., the Illinois Appellate Court stated: "Where a policy expressly insured against loss caused by one risk but excludes loss caused by another risk, coverage is extended to a loss caused by the insured risk even though the excluded risk is a contributory cause." 454 N.E.2d 1156, 1161 (Ill.Ct.App. 1983) (quoting Kraemer Bros. Inc. v. United States Fire Ins. Co., 278 N.W.2d 857, 863-64 (Wis. 1979)). See also Arkwright-Boston Mfrs. Mut. Ins. Co. v. Wausau Paper Mills Co., 818 F.2d 591, 595 (7th Cir. 1987) (applying Wisconsin law and quoting Kraemer, 278 N.W.2d at 864). In Mattis, a failed basement wall was attributed to both poor design, which was covered by plaintiffs' all-risk policy, and earth movement, which was expressly excluded by the policy. The court attributed the loss to "a combination of natural and human failure" where neither cause by itself was sufficient to bring about plaintiffs' damages. 454 N.E.2d at 1164. Because poor design was covered by the policy, the court found the loss to be covered despite the contributory cause of earth movement.
Similarly, deterioration and temperature worked together here to cause the District's roofs to shatter, and neither one of these causes could have independently caused the shatters. Because cold temperature was not expressly excluded in the policy, the loss is a covered loss despite the contribution of deterioration.
Indiana relies on the popular doctrine of "efficient proximate cause," which is applied in many states to determine coverage in "chain of causation" fact patterns. As indicated above, Illinois does not appear to use this doctrine. Even if Illinois would decide to adopt the efficient-proximate-cause approach, however, the Court does not believe it is applicable to the present case. The doctrine attempts to strike a balance between, on the one hand, the temptation to convert an all-risk policy into an "all-loss" policy by allowing recovery anytime an insured can point to a covered circumstance that contributed to the loss and, on the other hand, the temptation to convert an all-risk policy into a "no-risk" policy by excluding coverage anytime an insurer can point to an excluded risk as a contributing factor in the chain of causation. Murray v. State Farm Fire Cas. Co., 509 S.E.2d 1, 14 (W.Va. 1998) (discussingGarvey v. State Farm Fire Cas. Co., 770 P.2d 704, 711 (Cal. 1989)). TheMurray court in West Virginia recently explained the application of the efficient proximate cause doctrine:
[W]hen examining whether coverage exists for a loss under a first-party insurance policy when the loss is caused by a combination of covered and specifically excluded risks, the loss is covered if the covered risk was the efficient proximate cause of the loss. . . . The efficient proximate cause is the risk that sets others in motion. . . . The efficient proximate cause is the predominating cause of the loss.Murray, 509 S.E.2d at 12. The Murray court reversed a summary judgment in favor of the plaintiffs, who argued that negligent construction of a rock wall adjacent to their properties was a covered cause of a rock fall that damaged their homes. Because rock falls were excluded under a landslide exclusion in the insurance policies, the court remanded the case for a jury finding of the efficient proximate cause of the loss, i.e., whether the loss was predominantly caused by negligent construction or by a landslide.
The Murray opinion notes two West Virginia cases from 1950 and 1971 which applied the efficient-proximate-cause doctrine to deny coverage on the basis that an excluded cause was factually dominant over a covered cause (where the evidence did not warrant jury findings of fact). Murray 509 S.E.2d at 10-11 (explainingLaBris v. Western Nat'l Ins. Co., 59 S.E.2d 236 (W.Va. 1950) (no coverage because roof collapse caused by water (excluded) rather than windstorm (covered)); Lewis v. St. Paul Fire Marine Ins. Co., 182 S.E.2d 44 (W.Va. 1971) (no coverage because insured failed to prove that windstorm was dominant cause of building damage)). However, the court notes that the efficient-proximate-cause doctrine seems to work in favor of the insured in the vast majority of cases. See, e.g., Pioneer Chlor Alkali Co. Inc. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 863 F. Supp. 1226 (D. Nev. 1994) (rag negligently left in pipe (covered) predominates over pipe erosion (excluded)); Brian Chuchua's Jeep, Inc. v. Farmers Ins. Group, 10 Cal.App.4th 1579. 13 Cal.Rptr.2d 444 (1992) (earthquake (covered) predominates over soil contamination (excluded)); Frontis v. Milwaukee Ins. Co., 242 A.2d 749 (Conn. 1968) (fire (covered) predominates over demolition of adjoining building (excluded));State Farm Fire Cas. Co. v. Von Der Lieth, 820 P.2d 285 (Cal. 1991) (negligent construction by third party (covered) predominates over landslide (excluded)); Wallach v. Rosenberg, 527 So.2d 1386 (Fla.Dist.Ct.App. 1988) (neighbor negligence (covered) predominates over earth movement and water damage (excluded)); Vormelker v. Oleksinski, 199 N.W.2d 287 (Mich.Ct.App. 1972) (contractor negligence (covered) predominates over earth movement (excluded)).
The efficient-proximate-cause doctrine does not apply to a case involving more than one cause where none of the causes is sufficient by itself to cause the loss. The doctrine applies to instances where several causes relate to one another in a chain of causation but where, individually, each cause would have been sufficient to cause the damage in question. See Pieper v. Commercial Underwriters Ins. Co., 59 Cal.App.4th 1008, 1020 (1997) ("For the efficient cause theory to apply, . . . there must be two separate or distinct perils which could each, under some circumstances, have occurred independently of the other and caused the damage." (quotation omitted)). For this reason, the Court finds that, even if Illinois courts were to adopt the efficient-proximate-cause doctrine in general, the doctrine is inapplicable to the present case because the shatters were caused by a combination of forces, each of which was insufficient by itself to cause the damage. In this case, it is unnecessary to search for a "dominating" cause because the Mattis approach controls. Accordingly, the District's losses are covered despite the policy's exclusion of deterioration losses.
Often, the predominating cause in efficient-proximate-cause cases is the cause that began a chain of causes leading to a loss, even though the first cause may appear the most remote from the eventual damage. E.g., Pioneer Chlor Alkali Co., 863 F. Supp. 1226 (rag negligently left in pipe predominates by causing pipe erosion which in turn causes damage); Brian Chuchua's Jeep, 10 Cal.App.4th 1579, 13 Cal.Rptr.2d 444 (earthquake predominates by causing gas tank to crack, which in turn causes soil contamination); Frontis, 242 A.2d 749 (fire predominates by causing demolition of adjoining building which in turn causes insured to alter his own building for lack of adjacent support);Von Der Lieth, 820 P.2d 285 (negligent construction by third party predominates by causing landslide which in turn causes damage); Wallach, 527 So.2d 1386 (neighbor negligence predominates by causing earth movement and water damage which in turn cause collapse of sea wall); Vormelker, 199 N.W.2d 287 (contractor negligence predominates by causing earth movement which in turn causes damage).
III. CONCLUSION
For the foregoing reasons, the Court GRANTS Plaintiff's Motion for Summary Judgment and DENIES Defendant's Motion for Summary Judgment. This case is set for a status hearing on September 6, 2000 at 10:00 a.m.