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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In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
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Post number 5386
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Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
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Post number 5385
No Contract Claim No Bad Faith Claim
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After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
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Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
Deprive Insurer of the Ability to Properly and Timely Investigate Claim & Recover Nothing
Posted on July 2, 2026 by Barry Zalma
Post number 5385
No Contract Claim No Bad Faith Claim
In South Alexander Development I, LLC v.Markel American Insurance Co., Civil Action No. 23-1436-JWD-SDJ, United States District Court, M.D. Louisiana (June 24, 2026) South Alexander Development I, LLC (SADI) owned and operated a solar farm in Springfield, Louisiana that allegedly sustained significant Hurricane Ida damage.
After SADI submitted a claim, MAIC ultimately paid $1,099,614.02 for undisputed physical damage plus the $210,000 income-loss policy limit. SADI later sued for breach of contract and statutory bad faith, contending MAIC failed to fully investigate and adjust the claim; MAIC sought summary judgment, arguing SADI failed to cooperate and withheld material repair-cost information.
LAW:
Louisiana insurance policies are interpreted as contracts according to their plain meaning, and the insured bears the burden ...
