Opinion ID: 1692953
Heading Depth: 1
Heading Rank: 6

Heading: occurrence must be accidental

Text: We must initially determine whether the events complained of are accidental within the meaning of the subject liability policies. We have said that an accident within the meaning of liability insurance contracts includes any event which takes place without the foresight or expectation of the person acted upon or affected thereby. Sullivan v. Great Plains Ins. Co., 210 Neb. 846, 317 N.W.2d 375 (1982); Riley v. National Auto Ins. Co., 162 Neb. 658, 77 N.W.2d 241 (1956). We have also stated, in the context of damage to personal property, that where acts are voluntary and intentional and the injury is the natural result of the act, the result was not caused by accident even though that result may have been unexpected, unforeseen, and unintended. See, Millard Warehouse, Inc. v. Hartford Fire Ins. Co., 204 Neb. 518, 283 N.W.2d 56 (1979); Foxley & Co. v. United States Fidelity & Guaranty Co., 203 Neb. 165, 277 N.W.2d 686 (1979). In other words, a volitional act does not become an accident simply because the insured's negligence prompted the act. Red Ball Leasing v. Hartford Acc. & Indem. Co., 915 F.2d 306 (7th Cir.1990). Injury that is caused directly by negligence must be distinguished from injury that is caused by a deliberate and contemplated act initiated at least in part by the actor's negligence at some earlier point. The former injury may be an accident. However, the latter injury, because it is intended and the negligence is attenuated from the volitional act, is not an accident. Id. The appellants point to three possible occurrences in the instant case: the failure to register the stock, the sale of the unregistered stock, and the failure to offer rescission to the affected shareholders. However, the time of the occurrence of an accident, within the meaning of a liability indemnity policy, is not the time when the wrongful act was committed, but the time when the complaining party was actually damaged. Friendship Homes v. American States Ins., 450 N.W.2d 778 (N.D.1990); Millers Mut. Fire Ins., Etc. v. Ed Bailey, 103 Idaho 377, 647 P.2d 1249 (1982) (it is well settled that time of occurrence of accident, within meaning of liability indemnity policy, is time complaining party was damaged rather than time wrongful act was committed; this rule followed in every jurisdiction that has considered issue except Louisiana); Moss v. Shelby Mutual, 105 Mich.App. 671, 308 N.W.2d 428 (1981) (time when complainant is damaged, rather than time of negligent act, is point at which responsibility accrues under indemnity policy); Singsaas v. Diederich, 307 Minn. 153, 238 N.W.2d 878 (1976) (generally accepted rule is that time of occurrence is not time wrongful act was committed but time complaining party was actually damaged). See, also, 11 George J. Couch, Cyclopedia of Insurance Law § 44:8 (rev. 2d ed. 1982); 1 Rowland H. Long; The Law of Liability Insurance § 1.08[1] (1997). The appellants argue that the point in time when they were actually damaged was either when they received their unregistered stock certificates or when Tobiason refused to rescind the sale of the stock certificates. We need not choose one event over the other, as both events allege an injury caused by a deliberate and contemplated act from the standpoint of the insured, that being, the sale of, or the failure to rescind the sale of, the stock certificates. Further, both events were initiated, at least in part, by Tobiason's negligence at some earlier point, that being, Tobiason's failure to properly register the DPPI stock in early 1989. Thus, we conclude that the events complained of are not accidents, because they were intended, deliberate acts initiated by Tobiason's negligence, which was well attenuated from the volitional act itself.