De Bruyn v. Superior Court
Filed January 14, 2008, Second District, Div. Four
Cite as 2008 SOS 234

Writ Of Mandate Denied In Insurance Claim Due to Coverage Exclusion

Rudolf De Bruyn was out of town when a toilet in his home overflowed, causing water damage. The water damage, in turn, caused mold. De Bruyn filed a damages claim with homeowner’s insurer Farmers Group, Inc.

Farmers paid for the water damage, but not for the mold damage. In denying the mold claim, Farmers cited certain policy statements expressly which is stated as: “Whenever rust, mold, fungus, or wet or dry rot occurs, the rust, mold, fungus, wet or dry rot and any resulting loss is always excluded under this policy, however caused.”

Consequently, De Bruyn sued Farmers, among other things, for committed acts of unfair competition by relying on the “absolute” mold exclusion contained in its policy because the exclusion violated Insurance Code §530 and was therefore illegal.

Farmers demurred to the unfair competition complaint for the reason that §530 did not apply under the facts of the case and, even if it did apply, it permitted Farmers to exclude coverage for mold damage, however caused.

The trial court sustained the demurrer without leave to amend.

De Bruyn petitioned the court of appeal for a writ of mandate challenging the trial court’s ruling.

The Second District appeals court held that the exclusion was valid based on the following grounds:

• Under California case law an insurer may limit coverage to some, but not all, manifestations of a given peril, as long as a reasonable insured “would readily understand from the policy language” which perils are covered and which are not.


• The policy at issue here, the court explained, contained an exclusion for water damage which expressly stated that although the policy did cover those losses caused by water damage resulting from a “sudden and accidental” discharge of water, it “never, under any circumstances, cover[ed] ... mold, ... even if resulting from” that specific peril.


• that even though water damage caused by a sudden and accidental release of water was covered, mold resulting from that damage was an excluded as the policy made clear


• The exclusion was therefore valid, and the efficient proximate cause doctrine did not apply which provides that when a loss is caused by a combination of a covered and specifically excluded risk, the loss must be covered if the covered risk was the efficient proximate cause of the loss.(Insurance Code Sec. 530)

In denying a petition for writ of mandate, the Second Appellate District held that a policy exclusion which expressly limited coverage to some, but not all, manifestations of water damage did not run afoul of the efficient proximate cause doctrine.