Earth Movement Exclusion Effective as Major Cause of Loss
One of Many Causes of Destruction of House was Earth Movement
Post 5111
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Anti-Concurrent Cause Language Required Claim Denial
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Terri Lawrence sued alleging that State Farm breached an insurance contract and acted in bad faith by failing to pay benefits under the contract. The case was removed to the United States District Court based on diversity jurisdiction, and the trial was set to begin on September 8, 2025.
In Terri Lawrence v. State Farm Fire..., No. C24-4008-LTS-MAR, United States District Court, N.D. Iowa, Western Division (June 25, 2025) the USDC applied anti-concurrent cause language to dismiss suit.
SUMMARY JUDGMENT
Relevant Facts
Lawrence purchased a property in Sioux City, Iowa, and insured it with State Farm. In January 2023, a burst water pipe caused significant damage to the property, leading to its condemnation.
On or about January 11, 2023, the Property was placarded as being unfit for human habitation by the Inspection Services Division of the City of Sioux City Iowa because of “major foundation and structural damage due to a burst water pipe.”
ANALYSIS
The earth movement exclusion unambiguously precluded coverage.
The party claiming entitlement to coverage under the policy must prove compliance with its terms.
Because the Policy’s earth movement exclusion unambiguously applies to preclude coverage, Lawrence cannot show that State Farm breached the Policy and her breach of contract claim fails as a matter of law.
Since State Farm had a reasonable basis for denying Lawrence’s claim her bad faith claim fails as a matter of law.
CONCLUSION
State Farm’s motion for summary judgment was granted in its entirety, the action was dismissed and judgment was entered in favor of State Farm and against plaintiffs.
ZALMA OPINION
Insurance litigants must be aware of the anti-concurrent cause language now existing in almost all modern insurance policies before bringing a breach of contract and bad faith suit. “Earth movement” was at least a contributing cause of the damage (and clearly a major one), plaintiffs are not entitled to coverage under the Policy. Even though some of the cause of her damage was a covered peril, earth movement was a major cause and was clearly and unambiguously excluded and State Farm’s claim denial was affirmed.
(c) 2025 Barry Zalma & ClaimSchool, Inc.
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Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
Full Faith and Credit Act Controlled
Read the full article at https://lnkd.in/evHXiiFE and at https://zalma.com/blog.
Posted on June 9, 2026 by Barry Zalma
Post number 5368
Posted on June 9, 2026 by Barry Zalma
In Prime Insurance Company, Inc. v. Medicab Transportation, LLC, Jason Rhodes, and Dale Johnson v. Prime Insurance Company, Inc and Prime Property & Casualty Insurance, Inc. No. 2:24-cv-421-SPC-KRH, United States District Court, M.D. Florida, Fort Myers Division (June 3, 2026) Medicab, a paratransit company, bought two policies in 2021: a Business Auto Policy from PPCI and a Commercial Liability Policy from Prime. Both policies, as originally written, appeared to cover injuries arising from loading and unloading patients from Medicab vans.
After a patient, Margaret St. Aubin, fell while being unloaded from a van and suffered injuries, her Estate made a $1 million demand. Prime and its claims administrator concluded that the Commercial Policy’s loading/unloading language had been included by mutual mistake, because...
