Liberty Corporate Capital Limited v. Club Exclusive, Inc.

Liberty Corporate Capital Limited, a London-based insurer, filed a declaratory judgment action against Club Exclusive, Inc., a Florida nightclub, seeking a ruling that it had no duty to cover property damage under a commercial insurance policy. The damage stemmed from a clogged air conditioning drain line that caused water leakage, leading to ceiling collapse and pervasive mold growth. The insurer relied on the policy's mold exclusion, which unambiguously barred coverage for loss caused by or resulting from mold. Club Exclusive counterclaimed for breach of contract. The United States District Court for the Southern District of Florida applied Florida’s concurrent causation doctrine, determining that when covered water damage and excluded mold combine to produce an indivisible loss, the entire loss is excluded from coverage. On June 26, 2017, the court granted summary judgment in favor of Liberty Corporate Capital Limited, concluding that the insurer owed no coverage obligation and dismissing the counterclaim.

The district court granted Liberty Corporate Capital Limited's motion for summary judgment, denied Club Exclusive, Inc.'s counterclaim, and held that the insurer had no duty to indemnify the nightclub for the claimed losses.

Whether the mold exclusion clause in the insurance policy unambiguously barred coverage for property damage caused jointly by water leakage and resulting mold, and whether the concurrent causation doctrine applied to exclude all losses.

The decision reinforced the strict enforceability of clear and unambiguous exclusionary language in insurance contracts, particularly for mold and fungi. It also provided an important precedent on the application of the concurrent causation doctrine in first-party property insurance claims, limiting coverage when a covered peril and an expressly excluded peril jointly cause a loss.