Contract analysis

I. Executive Summary This memorandum analyzes Florida law governing anti-concurrent causation ("ACC") clauses in all-risk property insurance policies and their interaction with flood exclusions. The analysis is undertaken in the specific context of Ironclad Indemnity Corporation's ("Ironclad") assertion that storm-surge (flood) damage at the Verimark Grand Key Resort triggers the flood exclusion for all concurrent wi

II. Factual Background A. Hurricane Callista — Relevant Facts Hurricane Callista was named by the National Hurricane Center ("NHC") on September 12, 2022, after a tropical depression rapidly organized in the southwestern Caribbean Sea. The system intensified quickly, reaching Category 2 strength by September 14 and Category 4 strength by September 17, as it tracked northwest through the Straits of Florida toward the

1. The anti-concurrent causation clause and flood exclusion;

2. The purported windstorm sub-limit of $10 million (which VHG contends was deleted at the July 2022 renewal, as discussed in a separate memorandum dated October 20, 2022);

4. The vacancy exclusion as applied to the Grand Key Resort's pre-storm evacuation. This memorandum addresses only the first of these four grounds. Ironclad has retained the law firm of Fendowell Rourke & Stanton LLP ("Fendowell Rourke") to serve as coverage counsel. The engagement is led by Gregory Stanton, a partner in Fendowell Rourke's Fort Lauderdale office. Mr. Stanton has represented Ironclad and other propert

III. Legal Analysis — Florida Anti-Concurrent Causation Doctrine A. The Efficient Proximate Cause Doctrine in Florida Florida courts have long applied the "efficient proximate cause" doctrine to determine coverage in cases involving multiple causes of loss, some covered and some excluded. Under this doctrine, where a covered peril is the predominant, dominant, or efficient cause of a loss, coverage exists even if an

IV. Application to VHG's Claim A. Grand Key Resort — Primary Focus The Verimark Grand Key Resort, located at Mile Marker 48 in Marathon, Monroe County, Florida, is the property most significantly impacted by storm surge during Hurricane Callista and therefore represents the most closely contested factual battleground for the ACC/flood exclusion issue. As noted above, Monroe County recorded storm surge levels of 8–14

V. Comparison with Other Jurisdictions While Florida law controls this dispute — the Ironclad primary policy contains a Florida governing-law provision, and all three insured properties are located in Florida — a brief survey of how other hurricane-prone jurisdictions have addressed ACC clauses in the wind/flood context is informative for two reasons: (1) Ironclad may cite out-of-state decisions in support of its pos

VI. Evidentiary Strategy — Building the Record To maximize VHG's position under the efficient proximate cause doctrine — and to protect against the risk of a court requiring apportionment — Calderwood & Harkness must build a comprehensive factual record demonstrating that wind was the predominant cause of property damage and resulting business interruption at each of VHG's three resort properties. The evidentiary str

VII. Potential Counterarguments and Risk Assessment A. Ironclad's Likely Arguments We should anticipate the following arguments from Ironclad and its defense counsel, Gregory Stanton of Fendowell Rourke & Stanton LLP: Plain Language Enforcement. Ironclad's primary argument will be that the ACC clause is clear and unambiguous on its face and must be enforced as written. The clause states that losses caused "directly o