Dillon Gage Incorporated of Dallas v. Certain Underwriters at Lloyds Subscribing to Policy No Ee1701590, 636 S.W.3d 640

Dillon Gage, a Dallas gold-coin dealer, received two orders paid by stolen/forged checks totaling $1,204,000; it shipped coins after checks initially cleared and sent UPS tracking info to the thief.
The thief used the tracking numbers to reroute both shipments via UPS to pickup locations, where unknown persons collected the coins; the bank later dishonored the checks.
Dillon Gage sought coverage under its transit policy for the physical loss; Underwriters denied coverage under an "Invalid Payments Exclusion Clause" that excludes losses “consequent upon” handing property to a third party against payment by a fraudulent cheque, paying only a $12,500 extension.
District court granted summary judgment for Underwriters, holding "consequent upon" means but-for causation and that UPS’s alleged negligence was not an independent cause under JAW The Pointe.
The Fifth Circuit certified two questions to the Texas Supreme Court: (1) whether the loss was "consequent upon" handing property over for a fraudulent check (triggering the exclusion), and (2) whether UPS’s alleged negligence was an independent cause under Texas law.
Texas Supreme Court answered: yes (the loss was consequent upon handing over the property), and no (UPS’s rerouting was not an independent cause).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does "consequent upon" in the exclusion require a heightened (substantial-factor) causal standard or merely but-for causation?	"Consequent upon" requires a more stringent/substantial-factor causal connection; UPS reroute superseded the check as the substantial cause.	Ordinary meaning of "consequent upon" is "following as a result" and aligns with but-for causation.	Held: "Consequent upon" denotes but-for causation (and but even under substantial-factor test, causation would be satisfied here).
Was UPS’s alleged negligent rerouting an independent cause that severs the exclusion (separate and independent causation)?	UPS’s errors were an independent cause: different actors, times, and conduct; thus exclusion should not bar coverage.	The theft scheme was unitary: Dillon Gage handed over tracking info and coins because of the fraudulent checks; UPS’s conduct was induced by that fraud and thus concurrent, not independent.	Held: UPS’s rerouting was a concurrent cause dependent on the fraud, not an independent cause; exclusion applies.

JAW The Pointe v. Lexington Ins. Co., 460 S.W.3d 597 (Tex. 2015) (concurrent-causation doctrine and when excluded and covered events are separable)
Utica Nat. Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198 (Tex. 2004) (distinguishing causal phrases like "due to" and "arising out of")
RSUI Indem. Co. v. Lynd Co., 466 S.W.3d 113 (Tex. 2015) (rules for interpreting insurance contracts)
Union Pump Co. v. Allbritton, 898 S.W.2d 773 (Tex. 1995) (discussion of substantial-factor causation)
Mid-Century Ins. Co. of Tex. v. Lindsey, 997 S.W.2d 153 (Tex. 1999) ("arising out of" means but-for causation)
Lear Siegler, Inc. v. Perez, 819 S.W.2d 470 (Tex. 1991) (recognition that an event can have more than one cause)
Guaranty Nat’l Ins. Co. v. North River Ins. Co., 909 F.2d 133 (5th Cir. 1990) (example where separate acts by same actor caused independent proximate causes for a loss)