Title: State Farm Insurance Co. v. Roberts

State: vermont

Issuer: Vermont Supreme Court

Document:

State Farm Insurance Co. v. Roberts  (95-115); 166 Vt. 452; 697 A.2d 667

[Filed 6-Jun-1997]

       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                            No. 95-115

State Farm Mutual Automobile                 Supreme Court
Insurance Company
                                             On Appeal from
    v.                                       Addison Superior Court

David Roberts, Lyle Webb, Nationwide         January Term, 1996
Mutual Insurance Company & Cooperative
Fire Insurance Association of Vermont

Edward J. Cashman, J.

       Robert G. Cain and William D. Riley of Paul, Frank & Collins, Inc.,
  Burlington, for plaintiff-appellee

       James A. Dumont and John J. Cotter, Law Clerk (On the Brief), of
  Sessions, Keiner, Dumont & Barnes P.C., Middlebury, for
  defendant-appellant/cross-appellee Webb

       John Davis Buckley of Theriault & Joslin, P.C., Montpelier, for
  defendant-appellee Nationwide Mutual Insurance Company

       Richard P. Foote of Conley & Foote, Middlebury, for
  defendant-appellee/cross-appellant Cooperative Fire Insurance Association
  of Vermont

PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.

       DOOLEY, J.  This declaratory judgment action concerns the contractual
  liability of three insurance companies with respect to an underlying tort
  suit brought by Lyle Webb after he was injured while unloading an engine
  from his truck into David Roberts' garage.  In response to the parties'
  motions for summary judgment, the superior court ruled that both Roberts'
  automobile and homeowner insurers had a duty to defend and indemnify him. 
  The court also ruled that the accident was not covered under Webb's
  automobile policy, and it dismissed Webb's bad-faith cross-claim against
  his insurer.  Roberts' homeowner's insurer appeals,

 

  arguing that a coverage exclusion applies.(FN1)  We agree and reverse.

       On the evening of January 21, 1991, Webb drove his uninsured dump
  truck to Roberts' home to drop off an engine for Roberts' pickup truck. 
  Webb's visit was unexpected; apparently, Webb was repaying Roberts for some
  snowplowing Roberts had done for Webb.  Because Roberts had no immediate
  use for the engine, he decided to store it in his garage.  Webb backed his
  dump truck to the garage entrance, tilted the bed of the truck to
  facilitate unloading the engine, and opened the tailgate.  In order to
  slide the engine to the garage floor, the two men placed a piece of plywood
  at the end of the tailgate to form a ramp.  They attempted to slide the
  engine from the truck bed, down the plywood ramp, and onto the garage
  floor.  Each man kept one foot in the bed of the truck and placed one foot
  on the plywood board.  As they began to push the engine down the ramp, the
  ramp slipped from its position, causing Webb to fall into the garage wall
  and onto the floor, where the engine  rolled on his hand.  Webb sued
  Roberts, claiming he was injured as the result of Roberts' negligence in
  directing that the plywood be placed on an icy area of the garage floor.

       At the time of the accident, three insurance policies were in force. 
  Roberts had an automobile policy from State Farm Mutual Automobile
  Insurance Company that contained a provision covering liability for use of
  a nonowned vehicle.  Roberts also had a homeowner's policy from Cooperative
  Fire Insurance Company of Vermont that excluded coverage for liability
  resulting "directly or indirectly" from "the ownership, operation,
  maintenance, use, occupancy, renting, loaning, entrusting, supervision,
  loading or unloading by an insured of motorized vehicles."  Webb had an
  automobile policy issued by Nationwide Mutual Insurance Company that
  covered another truck he owned, but did not cover the dump truck involved
  in this litigation.  That policy contains uninsured-underinsured motorist
  coverage.

       In its summary judgment order, the superior court ruled that (1) State
  Farm was required

 

  to defend and indemnify Roberts under its nonowned-vehicle policy
  provision; (2) Cooperative Fire was required to defend and indemnify
  Roberts notwithstanding the automobile exclusion in its homeowner's policy
  because one of the alleged causes of the accident was an included risk --
  ice on the garage floor; and (3) Nationwide was not required to extend
  uninsured-motorist coverage to the claim, and thus did not act in bad faith
  in denying coverage, because it did not insure Webb's dump truck, and
  Roberts was an insured motorist.  Only Webb and Cooperative Fire appealed
  from the order.

       Following the declaratory judgment ruling, Webb's tort suit went to
  trial and resulted in a defendant's verdict, which was affirmed on appeal
  to this Court.  The resolution of the underlying suit has mooted the
  dispute over whether Nationwide was required to extend uninsured-motorist
  coverage to Webb's claim.  It has also mooted any dispute over Cooperative
  Fire's obligation to indemnify Roberts.  There remains, however, a live
  dispute over the cost of the defense of the underlying suit between State
  Farm and Cooperative Fire.  We must, therefore, decide Cooperative Fire's
  appeal of the superior court's decision that Cooperative Fire had an
  obligation to defend Roberts.

       The issue turns on whether the doctrine of concurrent causation
  applies in light of the language of the policy and the facts surrounding
  the accident.  Under that doctrine, if the liability of an insured arises
  from concurrent but separate nonvehicle-related and vehicle-related
  negligent acts, and the nonvehicle-related act is an included risk under
  the insured's homeowner's policy, coverage exists even though the policy
  contains an automobile exclusion. 7A J. Appleman, Insurance Law and
  Practice § 4500, at 179-80 (1979).  In other words, if an occurrence is
  caused by a risk included within the policy, coverage may not be denied
  merely because a separate excluded risk was an additional cause of the
  accident.  Id. at 179.

       The leading case on the concurrent causation doctrine is State Farm
  Mut. Auto. Ins. Co. v. Partridge, 514 P.2d 123 (Cal. 1973).  In that case,
  after filing the trigger of a pistol to create a "hair trigger action," the
  insured and a friend headed with the pistol into rough terrain hunting
  jackrabbits in their four-wheel-drive vehicle.  When the vehicle hit a
  bump, the pistol discharged

 (Page 4)

  and injured the friend, who sued the insured.  The homeowner's policy
  insurer denied coverage, relying on a policy provision that excluded
  coverage for bodily injury "arising out of" the use of any motor vehicle. 
  The California Supreme Court held that the claim of the friend was covered
  because both vehicle-related and nonvehicle-related risks proximately
  caused the injury and the insured's liability.  Id. at 132.  According to
  the court,

     Here, . . . an insured risk (the modification of the gun)
     combined with an excluded risk (the negligent use of the car) to
     produce the ultimate injury.  Although there may be some question
     whether either of the two causes in the instant case can be properly
     characterized as the "prime," "moving" or "efficient" cause of the
     accident we believe that coverage under a liability insurance policy
     is equally available to an insured whenever an insured risk
     constitutes simply a concurrent proximate cause of the injuries.

  Id. at 130 (footnotes omitted).

       In applying this holding to a variety of fact patterns in later cases,
  the California appellate courts have focused on whether the act that gave
  rise to the alleged liability under the homeowner's policy was independent
  of the act that constituted use of the vehicle.  See, e.g., Daggs v.
  Foremost Ins. Co.,