At issue in the coverage dispute was whether the insurer had a duty to indemnify and defend the insured in connection with the underlying lawsuit under its CGL policy, which contained a mold exclusion and an anti-concurrent-cause provision. Although the court noted that the underlying claims against the insured sought damages related to mold, it nonetheless found that the insured was entitled to a defense under its policy because “despite the mold exclusion, these claims are covered because the allegation that [the insured] negligently failed to construct [the apartment complex] with a vapor barrier is a construction defect that is a covered occurrence and the efficient proximate cause of the renter’s mold damage.” The court further found that the policy’s anti-concurrent-cause provision did not preclude coverage because the insured’s failure to install a vapor barrier and the resulting mold were not “independent” causes of the renters’ damages. To the contrary, because the insured’s failure to install a vapor barrier and the resulting mold were “dependent” causes of the renters’ damages — i.e., the lack of a vapor barrier “instigated or set in motion the mold growth, leading to the renters’ damages”–the policy’s anti-concurrent-cause provision did not preclude coverage.
Based on this analysis, the court held on summary judgment that, despite the policy’s mold exclusion and anti-concurrent-cause provision, the insured was entitled to defense and indemnity on the renters’ damages mold-related claims because the negligent failure to install a vapor barrier was a covered construction defect that was the efficient proximate cause of the renters’ damages.