Judgment unanimously modified on the law and as modified affirmed without costs and judgment granted in accordance with the following Memorandum: Supreme Court properly concluded that plaintiffs' losses were caused by asbestos contamination, coverage for which is specifically excluded under the insurance policy issued by defendant. To determine causation, one looks to the "efficient or dominant cause of the loss", not the event that "merely set the stage for that later event" (Home Ins. Co. v American Ins. Co., 147 A.D.2d 353, 354; see also, Album Realty Corp. v American Home Assur. Co., 80 N.Y.2d 1008, rearg denied 81 N.Y.2d 784). Here, the contractor's cutting into vinyl flooring with a chain saw set in motion a chain of events that ultimately resulted in plaintiffs' losses. Plaintiffs' losses, however, were proximately caused by asbestos contamination and losses caused by "contamination" are specifically excluded from coverage.
The court erred, however, in dismissing the complaint rather than declaring the rights of the parties (see, Shields v City of Buffalo, 206 A.D.2d 921, 922, lv denied 84 N.Y.2d 813). We modify the judgment on appeal by reinstating the complaint insofar as it seeks a declaratory judgment and by granting judgment in favor of defendant declaring that defendant did not wrongfully disclaim coverage and that the circumstances of the occurrence constitute contamination as defined in the policy.