Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-02607/USCOURTS-azd-2_12-cv-02607-0/pdf.json

Nature of Suit Code: 110
Nature of Suit: Insurance
Cause of Action: 28:1332 Diversity-Declaratory Judgment

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WO 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

Grain Dealers Mutual Insurance Company, 

an Indiana company, 

Plaintiff, 

v. 

Donnetta S. Sharbono, surviving wife/on 

behalf of herself and the surviving children 

of deceased and as the surviving parent of 

Christopher B. Sharbono; et al., 

 Defendants. 

Donnetta S. Sharbono, surviving wife/on 

behalf of herself and the surviving children 

of deceased and as the surviving parent of 

Christopher B. Sharbono, 

 Counterclaimants, 

v. 

Grain Dealers Mutual insurance Company, 

an Indiana company, 

 Counterdefendant. 

Maria Kubal, et al., 

 Counterclaimants, 

v. 

Grain Dealers Mutual Insurance Company, 

an Indiana company, 

Counterdefendant.

No. CV-12-02607-PHX-GMS

ORDER 

Case 2:12-cv-02607-GMS Document 67 Filed 12/04/13 Page 1 of 7
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 Pending before the Court is Plaintiff’s Motion for Summary Judgment in this 

declaratory judgment action. For the following reasons, Plaintiff’s motion (Doc. 52) is 

granted. 

BACKGROUND

 Plaintiff Grain Dealers Mutual Insurance Company (“Grain Dealers”), seeks a 

declaratory judgment limiting their liability on a commercial liability policy held by 

Defendant Hugo Flores (d/b/a Heber Tire & Oil Express, f/k/a the Heber Tire Shop) 

(“Flores”). (Doc. 52 at 2.) The liability arises from an auto accident that occurred on 

November 5, 2009. (Doc. 52 at 3.) On that day Gary Sharbono and Christopher 

Sharbono were driving westbound in a Ford pickup on Interstate 8 near Winterhaven, 

California, just west of Yuma, Arizona. (Doc. 1 ¶ 18.) At the same time, Andrew Kubal 

was driving a Volvo tractor trailer eastbound on Interstate 8. (Id.) A wrongful death 

lawsuit by the Kubal Defendants alleges that a Michelin tire on the front driver’s side of 

the Ford pickup truck failed. (Doc. 61 at 5.) The tire was allegedly purchased from 

Flores’ Heber Tire Shop. (Id.) The tire failure is alleged to have caused a loss of control 

of the pickup truck and a head-on collision between it and the on-coming Volvo tractor 

trailer. (Id.) No one survived the collision. (Doc. 53 ¶ 13.) 

 Defendant Flores, who allegedly sold the Michelin tire to the Sharbonos, was 

insured at all relevant times by a Grain Dealers commercial liability insurance policy. 

(Doc. 53 ¶ 1; Doc. 1-1.)1

 The policy limits were for $500,000 for “any one occurrence,” 

subject to a $1,000,000 “Products-Completed Operations Aggregate Limit” and a 

 

1

 The Kubal Defendants contest the authenticity of the Flores insurance policy produced 

by Grain Dealers at Doc. 1-1. However, the author of the policy, a Grain Dealers Commercial 

Lines Underwriter named Sarah Burch, swears that the Grain Dealers policy attached is “a true 

specimen of Policy CPP 524 983 as of November 5, 2009, issued to FLORES, HUGO, P.O. Box 

733, Heber, Arizona 85828.” She also attests that “attached photostatic copy of the Grain 

Dealers Mutual Insurance Company’s Home Office Copy of CPP 524 983 issued to FLORES, 

HUGO and it is a true, accurate and complete copy of the Home Office record.” The Kubal 

Defendants’ attorney, John D. Rowell, has also have submitted standard insurance forms that he 

states in his experience are often offered. (Doc. 59 (Decl. of John. D. Rowell).) However, even 

if there was reason to doubt the authenticity of the Flores policy put forth by Grain Dealers, the 

Kubal Defendants and their attorney have not pointed to any relevant provision differences 

between the policy put forth by Grain Dealers and the standard form put forth by Mr. Rowell. 

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$1,000,000 “General Aggregate Limit.” (Doc. 1-1 at 51, 62.) There is no dispute that the 

policy defined “occurrence” as “an accident,” “including continuous or repeated exposure 

to substantially the same general harmful conditions.” (Doc 1-1 at 66.) A dispute 

apparently arose during settlement discussions between Grain Dealers and Defendants as 

to the proceeds available from the Flores insurance policy. (Doc 59 at 2.) Grain Dealers 

claim that the policy limit is $500,000 because there was only one “occurrence” under the 

policy. (Doc. 1 at 6.) Kubal Defendants claim the term “occurrence” is ambiguous and 

therefore should be construed against the issuer, Grain Dealers, and also that there was 

more than one occurrence, due to multiple acts of negligence that led to the injury. (Doc. 

61 at 10.) Both Grain Dealers and the Kubal Defendants move for declaratory judgment. 

(Doc. 52; Doc. 23 at 9.) 

DISCUSSION 

I. LEGAL STANDARD 

 Summary judgment is appropriate if the evidence, viewed in the light most 

favorable to the nonmoving party, demonstrates “that there is no genuine dispute as to 

any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. 

P. 56(a). “A fact issue is genuine ‘if the evidence is such that a reasonable jury could 

return a verdict for the nonmoving party.’” Villiarimo v. Aloha Island Air, Inc., 281 F.3d 

1054, 1061 (9th Cir.2002) (quoting Anderson, 477 U.S. at 248). Thus, the nonmoving 

party must show that the genuine factual issues “‘can be resolved only by a finder of fact 

because they may reasonably be resolved in favor of either party.’” Cal. Architectural 

Bldg. Prods., Inc. v. Franciscan Ceramics, Inc., 818 F.2d 1466, 1468 (9th Cir. 

1987) (quoting Anderson, 477 U.S. at 250). 

 No party contests that Arizona law applies to this case. Interpretation of an 

insurance policy is a question of law, and is often an appropriate issue for the Court to 

resolve on cross-motions for summary judgment. See Keggi v. Northbrook Prop. & Cas. 

Ins. Co., 199 Ariz. 43, 46, 13 P.3d 785, 788 (Ct. App. 2000); Blue Ridge Ins. Co. v. 

Stanewich, 142 F.3d 1145, 1147 (9th Cir. 1998). Arizona law directs courts to construe 

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an insurance contract “according to [its] plain and ordinary meaning.” Keggi, 199 Ariz. 

at 46, 13 P.3d 785; see Aztar Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463, 469, 224 P.3d 

960, 966 (Ct. App. 2010). “If a clause may be susceptible to different constructions ... 

[the Court] will first attempt to discern the meaning of the clause by examining the 

purpose of the exclusion in question, the public policy considerations involved and the 

transaction as a whole.” Keggi, 199 Ariz. at 46, 13 P.3d 785 (internal quotations 

omitted). “Generally, the insured bears the burden to establish coverage under an 

insuring clause, and the insurer bears the burden to establish the applicability of any 

exclusion.” Id. Only when an insurance contract is actually ambiguous will a court 

employ other canons of construction, such as construing the ambiguity against the 

insurer, see Thomas v. Liberty Mutual Insurance Co., 173 Ariz. 322, 325, 842 P.2d 1335, 

1338 (Ct. App. 1992), or favoring the protection of the interests of injured victims, 

see American Family Mutual Insurance Co. v. White, 204 Ariz. 500, 505, 65 P.3d 449, 

454 (Ct. App. 2003). 

II. ANALYSIS 

 The term under dispute in the present action, “occurrence,” has been defined in the 

Flores policy as “an accident,” “including continuous or repeated exposure to 

substantially the same general harmful conditions.” (Doc 1-1 at 66.) 

The word ‘accident,’ as used in insurance policies, is generally defined as ‘an undesigned, sudden, and unexpected event, usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force.’ The usual understanding of the word ‘clearly implies a misfortune with 

concomitant damage to a victim, and not the negligence which eventually results in that misfortune.’ 

GRE Ins. Grp. v. Green, 194 Ariz. 251, 253, 980 P.2d 963, 965 (Ct. App. 1999) (quoting 

Century Mut. Ins. Co. v. S. Ariz. Aviation, Inc., 8 Ariz. App. 384, 386, 446 P.2d 490, 492 

(1968)). 

 Nevertheless, the Kubal Defendants argue, based on Arizona Property & Casualty 

Insurance Guaranty Fund v. Helme, 153 Ariz. 129, 735 P.2d 451 (1987), that multiple 

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acts which cause a single injury constitute multiple “occurrences.” Helme involved the 

injury of a patient after one doctor failed to look at spinal x-rays when treating him and 

another doctor failed to review the x-rays before performing surgery on him. Id. at 131–

36, 735 P.2d at 453–58. The medical malpractice policy at issue indemnified insureds 

separately up to the limit for “each occurrence” in which an insured became legally 

obligated to pay damages because of professional negligence. See id at 134, 735 P.2d at 

456. The Helme court determined that the number of causative acts, not the number of 

injuries caused, determined the number of occurrences and thus concluded that 

“[m]ultiple acts causing a single injury will constitute multiple occurrences.” Id. at 135, 

735 P.2d at 457. Helme held that because the doctors’ failures were separate causal acts 

of separate doctors on separate days, two occurrences led to the injury and death, and the 

patient’s survivors could recover for two covered claims. Id. at 136, 735 P.2d at 458. 

 However, the definition of “occurrence” in Helme is significantly different from 

that in the present case. In Helme, “occurrence” was defined as “any incident, act or 

omission, or series of related incidents, acts or omissions resulting in injury.” Id. at 134, 

735 P.2d at 456 (emphasis added). Because the policy defined an occurrence as 

something “resulting in” injury, the Helme court analyzed the number of causative acts 

that resulted in the injury. The Flores policy at issue here, however, does not define 

“occurrence” in causal language, rather it defines “occurrence” as an “accident” with no 

reference to the causes of injury in the accident. The plain language of the Flores policy 

contemplates coverage for each accident, i.e., the collision between the pickup truck and 

tractor trailer, not the individual acts of negligence of the policy holder that might have 

led to the accident. 

 Kubal Defendants also point to Austin Mutual Insurance Company v. Aldecoa, 2 

CA-CV 2011-0040, 2011 WL 4794936 (Ariz. Ct. App. Oct. 11, 2011), wherein the 

Arizona Appellate Court held that the acts of two grandparents constituted two 

occurrences, rather than a single “occurrence,” under their homeowner’s insurance 

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policy.2 The Kubal Defendants rightly point out that the policy in Austin also defines 

“occurrence” as an “accident.” And still, the Austin court engaged in the same type of 

Helme-style causal analysis to determine the number of occurrences. However, the 

Austin court used the Helme causal test because the insurance company in that case, 

Austin Mutual Insurance Company, agreed to use that test. The Austin court stated: 

“Austin has conceded this causal test applies and that the number of occurrences is 

determined by the ‘number of causative acts.’” Id. at fn 1. In the present case, Grain 

Dealers has made no such concession. The Court therefore applies the plain language of 

the Flores policy, and holds that the number of “occurrences” does not rely on the 

number of “causative acts” but is determined by the number of “accidents.” There is only 

one accident in the present case: the collision between the Sharbono pickup truck and the 

Kubal tractor trailer. 

 The Kubal Defendants also argue that the two separate aggregate limits on liability 

found in the Flores policy, $1,000,000 for “Products/Completed Operations Aggregate” 

and $1,000,000 for “General Aggregate (other than Products/Completed Operations)” can 

be combined. Grain Dealers argues the two are separate, that the General Aggregate limit 

has not been triggered, and that only the Products/Completed Operations Aggregate limit 

applies. Because the Court finds that only one “occurrence” took place due, it is not 

necessary to address whether the two aggregate limits in the Flores policy can be 

combined. 

 Grain Dealers has requested an award of attorney’s fees under A.R.S. § 12-341.01. 

Though attorney’s fees are available in contractual claims under A.R.S. § 12-341.01, they 

are given “at the discretion of the court.” Progressive Classic Ins. Co. v. Blaud, 212 

Ariz. 359, 364, 132 P.3d 298, 303 (Ct. App. 2006). Grain Dealers gives no basis for this 

 

2 Austin contains the following notice from the Court of Appeals of Arizona: “THIS 

DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED 

EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Sup. Ct. 111(c); Ariz. R. 

Civ. App. P. 28(c); Ariz. R. Crim. P. 31.24.” This disclaimer may diminish the value of the case 

to the Kubal Defendants’ arguments. However, because the case is distinguishable, the Court 

will address its contents. 

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request, and thus the Court, in its discretion, declines to award attorney’s fees. 

CONCLUSION

 The meaning of “occurrence” in the Flores insurance policy is “accident.” The 

Court finds as a matter of law that because there was only one accident – the collision 

between the Sharbono pickup truck and Kubal tractor trailer – there is only one 

occurrence under the policy and thus the $500,000 limit applies. This limit falls under 

the Products/Completed Operations Aggregate limit. The General Aggregate limit does 

not apply. 

IT IS THEREFORE ORDERED that Plaintiff Grain Dealers’ Motion for 

Summary Judgment (Doc. 52) is GRANTED. 

IT IS FUTHER ORDERED that the Counterclaim of the Kubal Defendants 

(Doc. 23) is DENIED WITH PREJUDICE. 

IT IS FURTHER ORDERED directing the Clerk of Court to terminate this 

action and enter judgment accordingly.

 Dated this 4th day of December, 2013. 

 

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