              NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
                     MOTION AND, IF FILED, DETERMINED


                                            IN THE DISTRICT COURT OF APPEAL

                                            OF FLORIDA

                                            SECOND DISTRICT


WILLIAM R. PEEK and STACEY PEEK,            )
                                            )
             Appellants,                    )
                                            )
v.                                          )   Case No. 2D14-780
                                            )
AMERICAN INTEGRITY INSURANCE                )
COMPANY OF FLORIDA,                         )
                                            )
             Appellee.                      )
                                            )

Opinion filed September 25, 2015.

Appeal from the Circuit Court for
Hillsborough County; Paul L. Huey, Judge.

Ernest P. Wagner of McGinnis Wutscher
Beiramee LLP; Michael Childress of
Childress Duffy Ltd., Chicago; and Steven
L. Brannock of Brannock & Humphries,
Tampa, for Appellants.

Andrew P. Rock and Wesley W. Levins
of Rock Law Group, P.A., Maitland, for
Appellee.


SLEET, Judge.

             William and Stacey Peek challenge the final judgment entered against

them in favor of American Integrity Insurance Company in the Peeks' breach of contract

action against American Integrity. The action stemmed from American Integrity's denial
of the Peeks' claim for loss and damage to their home after Chinese drywall was used in

its construction. The trial court's final judgment is based on its order granting American

Integrity's motion for directed verdict. Because the Peeks failed to establish below that

their loss was caused by a peril covered by their American Integrity insurance policy, we

affirm.

              The relevant facts of this case are undisputed. Chinese drywall was used

in the construction of the Peeks' new home in Tampa. The Peeks had an all-risk

insurance policy with American Integrity effective November 21, 2008. Immediately

after they moved into the home in January 2009, the Peeks began to smell a sulfur

odor. In August 2009, the odor worsened and the Peeks reported a claim to American

Integrity indicating that they suffered a loss due to Chinese drywall. Specifically, the

Peeks claimed that there was a noxious sulfur odor in the residence that caused them

to vacate the home. Furthermore, the Peeks claimed that there was corrosion and

deterioration of copper coils in their air conditioning system and other electrical

components in the house.

              American Integrity concluded that the Peeks' all-risk policy did not afford

coverage for the claimed losses associated with the Chinese drywall. American

Integrity cited policy exclusions for latent defects, corrosion, pollutants, and faulty,

inadequate, or defective construction materials and contended that the Chinese drywall

fit the definitions of all of these exclusions. In response to the denial of coverage, the

Peeks sued American Integrity for breach of the insurance contract.

              The parties acknowledge that they conducted discovery, pretrial

proceedings, and the actual trial with the understanding that the Peeks' burden was to




                                             -2-
prove the cause of their loss pursuant to the "concurrent cause" rule set forth in Wallach

v. Rosenberg, 527 So. 2d 1386, 1387 (Fla. 3d DCA 1988). "Under that doctrine, when

multiple perils act in concert to cause a loss, and at least one of the perils is insured and

is a concurrent cause of the loss, even if not the prime or the efficient cause, the loss is

covered." Am. Home Assurance Co. v. Sebo, 141 So. 3d 195, 197 (Fla. 2d DCA 2013)

(citing Wallach, 527 So. 2d at 1387-88). As such, both the Peeks and American

Integrity presented their cases with the understanding that in order to be entitled to

damages, the Peeks had to prove that a covered peril at least contributed to the cause

of the loss.

               At trial, the Peeks established through their own testimony and that of a

representative of American Integrity that they suffered a loss to their property within the

insurance policy period. The Peeks, however, did not present any expert testimony or

other evidence as to the cause of the loss. During its case-in-chief, American Integrity

presented expert testimony from Dr. Ralph Moon, a botanist with extensive experience

in testing and analyzing building materials, as well as the investigation of building

failure, mold, air quality, material failure, and water damages. Dr. Moon testified that

Chinese drywall contains elemental sulfur, which when exposed to the atmosphere

immediately emits corrosive and noxious gases. According to Dr. Moon, it is not

temperature sensitive and the destructive effects of the sulfur gases progress without

requiring any energy. He opined that the Chinese drywall used in the construction of

the Peeks' home was emitting destructive gases at the moment of manufacture, prior to

its installation in the Peeks' home. He therefore concluded that it was a faulty,

inadequate, or defective construction material. He also testified that the gases emitted




                                            -3-
from the drywall caused corrosion in the metal components of the appliances and air

conditioning system in the Peeks' home. Finally, he opined that the Chinese drywall

itself was a pollutant due to its emission of noxious and destructive gases.

              On cross-examination of Dr. Moon, counsel for the Peeks attempted to

prove that Florida's high humidity was a concurrent cause that acted in concert with the

sulfur gases to cause the loss to their home. And Dr. Moon did concede that humidity

could accelerate the emission of the sulfur gases. However, he qualified that statement

by adding that it was based upon an assumption that the Peeks did not regularly air

condition their home during times of higher humidity. He noted that there was no

evidence that the Peeks failed to run their air conditioning system regularly during the

spring and summer when they first detected the sulfur odor. He concluded that the

Chinese drywall emitted the destructive gases despite geography and climate.

Ultimately, he disagreed that humidity was a driving factor behind the Peeks' loss,

characterizing it as merely a "component" of the chemical equation. Finally, Dr. Moon

testified that there was no empirical evidence that humidity increased the amount of

noxious gases produced by the Chinese drywall installed in the Peeks' home.

              At the conclusion of Dr. Moon's testimony, both parties rested their

respective cases. The Peeks did not present any rebuttal evidence to prove any

exceptions to the exclusions raised by American Integrity, nor did they present any

evidence of any ensuing losses. Thereafter, both parties moved for directed verdicts.

The Peeks conceded that their home was improperly designed and had construction

defects, but they argued that humidity was a concurrent covered cause of the loss.

American Integrity responded that the defective Chinese drywall was the sole cause of




                                           -4-
the loss. The trial court reserved ruling on the motions for directed verdict and

conducted a charge conference to finalize jury instructions based upon the concurrent

cause doctrine.

              On the following morning, American Integrity presented the trial court with

this court's then newly-released opinion in Sebo, 141 So. 3d 195, as support for its

renewed motion for directed verdict. In Sebo, this court "disagree[d] with Wallach's

determination that the concurrent causation doctrine should be applied in a case

involving multiple perils and a first-party insurance policy." 141 So. 3d at 198. Instead,

this court held that "[t]he coverage analysis in first-party claims . . . should be decided

on the basis of the contract: if the efficient proximate cause of the loss is a covered

peril, the losses are covered; if it is an excluded peril, the losses are not covered." Id. at

201. Under this rule, "the finder of fact, usually the jury, determines which peril was the

most substantial or responsible factor in the loss. If the policy insures against that peril,

coverage is provided. If the policy excludes that peril, there is no coverage." Id. at 198.

              In response to American Integrity's renewed motion for directed verdict,

the Peeks did not request to reopen their case to address this new causation doctrine,

nor did they move for a mistrial based upon the fact that trial was conducted with a

different measure of causation in mind. Instead, the Peeks asked the court to decide

the motions for directed verdict based upon the efficient proximate cause doctrine in

Sebo. The Peeks acknowledged that Sebo changed their burden of proof from showing

that humidity was but one cause of their loss to showing that it was the efficient

proximate cause of the loss, but they maintained that they had met that burden. The

trial court disagreed and ruled that the Chinese drywall was the proximate efficient




                                             -5-
cause of the Peeks' loss and that "there were no ensuing losses because all of the

losses occurred as a direct and continuous result of the corrosive Chinese drywall."

The trial court therefore granted American Integrity's motion for directed verdict and

entered final judgment for American Integrity on the Peeks' breach of insurance contract

action. It is this final judgment that the Peeks now challenge.

              On appeal, the Peeks argue that the trial court erred in granting American

Integrity's motion for directed verdict because (1) the evidence established that their

loss was caused by both the Chinese drywall and the humidity of Florida; (2) humidity is

covered by the insurance policy as a "weather event"; and (3) the question of whether

the Chinese drywall or the humidity of Florida was the efficient proximate cause of the

loss was a question that should have been determined by the jury.1 We disagree.

              "[T]he general rule of evidence is that a plaintiff seeking to recover under

an 'all-risks' policy has the burden of proving that, while the policy was in force, a loss

occurred to the insured's property." Hudson v. Prudential Prop. & Cas. Ins. Co., 450

So. 2d 565, 568 (Fla. 2d DCA 1984). Under the efficient proximate cause rule, the

plaintiff must also prove that the covered loss was the "most substantial or responsible"

cause of the loss. Sebo, 141 So. 3d at 198. The burden then shifts to the insurer to

prove that the efficient proximate cause of the loss is excepted or excluded. Cf.

Hudson, 450 So. 2d at 568.

              Here, the Peeks did establish a loss during the insurance policy's effective

period. However, they are incorrect in maintaining that the evidence below established




              1
              The Peeks also argue on appeal that Sebo was wrongly decided and
should be reconsidered by this court. We decline that invitation.


                                            -6-
that humidity contributed to that loss. At trial, there was no dispute that the Chinese

drywall inside the Peeks' home contained elemental sulfur and emitted malodorous,

noxious, and corrosive sulfur gases. Dr. Moon opined that these destructive gases

were present at the moment that the Chinese drywall was manufactured and that the

gases began emanating from the drywall as soon as the elemental sulfur in the drywall

mixed with the air. Although he did acknowledge on cross-examination that humidity

could accelerate the emission of the gases, accelerating the emission is not the same

as causing it. Dr. Moon specifically testified that the Chinese drywall would produce the

destructive gases in any climate, and the Peeks did not present an expert witness of

their own to contradict Dr. Moon's testimony. As such, the uncontroverted evidence

demonstrated that humidity was not a peril that caused the Peeks' loss, let alone that it

was the efficient proximate cause of their loss.2

              Furthermore, American Integrity met its burden of proving that the Chinese

drywall was an excluded peril. Dr. Moon's testimony established that the Chinese

drywall's defective nature could not be discovered without testing, thus fitting the

definition of a latent defect; latent defects are excluded under the Peeks' policy. And

the elemental sulfur and the concomitant gases were proven to meet the statutory

definitions of "pollution" and "contaminant" contained in section 403.031(1), (7), Florida

Statutes (2008). The Peeks' policy excluded gaseous pollutants and contaminants,

including vapors and fumes.


              2
                 Because the Peeks failed to establish that there was a concurrent cause
of their loss, their argument that the language of their insurance policy contractually
obligated the parties to determine causation under the concurrent cause doctrine is
moot.



                                            -7-
              We do acknowledge that in Sebo this court stated that under the efficient

proximate cause doctrine "the finder of fact, usually the jury, determines which peril was

the most substantial or responsible factor in the loss." 141 So. 3d at 198. However, the

Peeks affirmatively requested that the trial court address American Integrity's motion for

directed verdict, maintaining that they had proven their case under either measure of

causation. And based on our de novo review of the record before us, there was no

conflict in the evidence below as to the efficient proximate cause of the Peeks' loss.

See Sims v. Cristinzio, 898 So. 2d 1004, 1006 (Fla. 2d DCA 2005) ("The standard of

review on appeal of the trial court's ruling on a defendant's motion for directed verdict is

the same test used by the trial court in ruling on the motion."). Nor were there any

inferences that could be lawfully drawn from the evidence that would have supported a

conclusion that there was any other cause of the Peeks' loss. As such, there was no

question for the jury to resolve, and the trial court did not err in entering directed verdict

for American Integrity. See id. at 1005 ("A motion for directed verdict should be granted

only where no view of the evidence, or inferences made therefrom, could support a

verdict for the nonmoving party.").

              The Peeks also argue in the alternative that even if the excluded peril of

Chinese drywall is the efficient proximate cause of their loss, American Integrity is still

required to cover the loss under the "ensuing loss" provision of the Peeks' insurance

policy. That provision provides as follows: "We do not insure loss to property described

in Coverages A and B caused by any of the following. However, any ensuing loss to

property described in Coverages A and B not excluded or excepted in this policy is

covered."




                                             -8-
              An ensuing loss follows as a consequence of an excluded loss, and the

crux of the ensuing loss provision is that there must be a covered cause of loss that

ensues from the excluded cause of loss. TRAVCO Ins. Co. v. Ward, 715 F. Supp. 2d

699 (E.D. Va. 2010) (interpreting an ensuing loss provision similar to the one at issue

here). Given that American Integrity proved that the Chinese drywall was an excluded

defective construction material, it was the Peeks' burden to demonstrate that the policy

covered a loss that occurred subsequent to and as a result of that excluded peril.

              The Peeks argue that the evidence below established that the defective

Chinese drywall led to (1) a subsequent loss of use of their home due to odor and (2)

subsequent damage to metals and electronics separate from any defective materials,

pollutants, or corrosion. We do not agree.

              First, the evidence below demonstrated that the odor present in the Peeks'

home was a manifestation of the sulfur gases emanating from the Chinese drywall and

that the corrosion was caused by the chemicals released by the sulfur gases, which

emanated from the Chinese drywall. As such, the losses were not "ensuing." Id. at

718-19 ("An ensuing loss is a loss that occurs subsequent in time to an initial loss. In

the present case, only a single claimed loss has occurred. The Chinese Drywall

released reduced sulfur gases which harmed Defendant, members of his family, and

items of personal property inside the Ward Residence. Although this damage occurred

gradually over a period of time, it still represents a single discrete loss from a single

discrete injury, namely the off-gassing of defective Chinese Drywall." (footnote

omitted)).




                                             -9-
              Additionally, both of the claimed ensuing losses are specifically excluded

under the policy because an excluded cause of loss—defective Chinese drywall—led

directly to another set of exclusions—pollution and corrosion. Exclusions must be read

in conjunction with other policy provisions, and ensuing loss exceptions are not

applicable if the ensuing loss was directly related to the original excluded risk. Swire

Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d 161, 167 (Fla. 2003). In Swire, the

Florida Supreme Court confirmed that an ensuing loss exception is not applicable if the

ensuing loss is directly related to the original excluded risk. "To hold otherwise would

be to allow the ensuing loss provision to completely eviscerate and consume the design

defect exclusion." Id. at 168. Here, the damage to the Peeks' home and consequently

the odors and corrosion of metals and electronics were directly related to the defective

Chinese drywall and thus directly stemmed from an excluded risk. Thus coverage was

excluded under the express terms of the insurance contract. Accordingly, we must

affirm the trial court's final judgment in favor of American Integrity.

              Affirmed.


ALTERBERND and SILBERMAN, JJ, Concur.




                                            - 10 -
