Chabad Lubavitch of Greater Ft. Lauderdale, Inc. (Chabad) owned a building that was damaged by a crane that landed on it during Tropical Storm Barry. At the time, Chabad had two policies on the damaged building. The first (not the subject of the appeal) was a policy that covered wind damage. Before it made the claim under the other policy, Chabad made a claim for the storm damage under this policy and received its policy limits.

The policy that was the subject of the appeal was an "all risk" policy issued by Certain Interested Underwriters at Lloyd's (Lloyd's). It contained the following "Windstorm or Hail Exclusion" (Wind Exclusion):

We will not pay for loss or damage:

1. Caused directly or indirectly by Windstorm or Hail, regardless of any other cause or event that contributes concurrently or in any sequence to the loss or damage; or

2. Caused by rain, snow, sand or dust, whether driven by wind or not, if that loss or damage would not have occurred but for the Windstorm or Hail.

But if Windstorm or Hail results in a cause of loss other than rain, snow, sand or dust, and that resulting cause of loss is a Covered Cause of Loss, we will pay for the loss or damage caused by such Covered Cause of Loss. For example, if the Windsorm or Hail damages a heating system and fire results, the loss or damage attributable to the fire is covered, subject to any other applicable policy provisions.

Chabad made a claim under the all risk policy for the same storm damage as it did under the wind policy. Lloyd's responded by filing a complaint for declaratory judgment. It sought a determination that the policy's windstorm exclusion excluded the damage caused by the wind generated during the storm. Chabad counterclaimed for breach of contract, citing Lloyd's failure to pay the claim under the policy. Both parties then moved for summary judgment. Lloyd's argument before the trial court was based on the theory that Chabad's submission of the claim under the wind policy constituted an admission that wind caused the loss. As a result, the building damage would not be covered because of the windstorm exclusion.

Chabad responded, arguing that the crane striking the building was the cause of the damage, not the wind. It focused on the exception within the windstorm exclusion provision that Lloyd's referred to as the Ensuing Loss provision) that stated, "if Windstorm or Hail results in a cause of loss other than rain, snow, sand or dust, and that resulting cause of loss is a Covered Cause of Loss, we will pay for the loss or damage caused by such Covered Cause of Loss."

The trial court ruled that the Windstorm Exclusion was ambiguous. As a result, it should be construed strictly against Lloyd's to cover the damage to Chabad's building. Lloyd's appealed.

The District Court of Appeals of Florida, Fourth District determined that the heart of the dispute in this case was the meaning of the Ensuing Loss provision that was an exception to the Windstorm Exclusion. It found that the Windstorm Exclusion unambiguously provides that, if windstorm causes loss or damage, the loss is not covered, regardless of any other cause or event that contributes to the loss. The Ensuing Loss provision contained within the exclusion provides that, if windstorm results in a cause of loss other than rain, snow, sand or dust (and the resulting loss is a Covered Cause of Loss), the loss would be covered.

The appeals court agreed with Lloyd's argument that the plain language of the Ensuing Loss provision meant that if a windstorm sets in motion another cause that the policy does not exclude (and that intervening cause results in a covered loss), the windstorm exception does not apply and the policy covers the loss. It concluded that the windstorm exclusion was not ambiguous and that the trial court erred by concluding otherwise. However, it also ruled that its determination did not fully resolve the issue because Lloyd's also assigned error to the trial court's apparent factual determination that the wind was not a direct cause of the damage. The record indicated that the parties did not stipulate to the cause of the crane falling. This factual determination was essential because the exclusion would apply only if the crane fell because of the force of the wind, aided only by gravity and not some other intervening cause. This was the reason the appeals court reversed and remanded the case back to the trial court to resolve this factual issue.

One justice dissented, holding that the trial court correctly found an ambiguity in the insurance policy. The justice stated the belief that a crane falling on Chabad's building was "a cause of loss other than rain, snow, sand or dust." and affirmed summary judgment for Chabad.

District Court of Appeal of Florida, Fourth District. Certain Interested Underwriters At Lloyd's, London Subscribing to Policy Number M12226, Appellant, v. Chabad Lubavitch Of Greater Ft. Lauderdale, Inc., Appellee. No 4D10-762. June 8, 2011. Rehearing Denied Aug. 3, 2011. 65 So.3d 67