Opinion ID: 1348245
Heading Depth: 1
Heading Rank: 4

Heading: Accident Cases

Text: Neither party has identified a Kansas case dealing with the question of whether a severability clause makes the defined term occurrence or the undefined term accident in a liability policy ambiguous when liability is sought against a co-insured for injuries intentionally caused by another co-insured. Safeco cites the following cases from other jurisdictions in which liability coverage was denied because the injury was not the result of an accident: Allstate Insurance Company v. Grayes, 216 Ga. App. 419, 454 S.E.2d 616 (1995); Mutual of Enumclaw v. Wilcox, 123 Idaho 4, 843 P.2d 154 (1992); State Farm Fire and Casualty Co. v. Doe, 130 Idaho 693, 946 P.2d 1333 (1997); and MBPIA v. Wasarovich, 214 Mich. App. 319, 542 N.W.2d 367 (1995). In Grayes, as a result of an ongoing dispute between two couples who were next-door neighbors, Mr. Middleton shot Mr. and Mrs. Grayes with a shotgun. Mrs. Middleton was not present at the time of the shooting. The Grayes sued the Middletons for their injuries, alleging that Mr. Middleton's actions were intentional and Mrs. Middleton provoked a series of incidents that led to the shooting. The Middletons sought liability coverage under their homeowner's policy. The insurer moved for summary judgment, arguing that because the injuries were not the result of an accident, there was no coverage. Also, the intentional injury exclusion barred coverage as to Mr. Middleton's conduct, and Mrs. Middleton's conduct did not cause the injuries. The Grayes then changed the theory of their case, arguing that Mr. Middleton negligently shot them in self-defense. The insurer withdrew its reliance on the intentional injury exclusion, but continued to argue that the injuries were not the result of an accident. After the trial court denied summary judgment, the insurer appealed and the Georgia Court of Appeals reversed, determining that the injuries were not the result of an accident, and no acts by Mrs. Middleton caused any of the injuries. 216 Ga. App. at 421. Grayes is similar to Harris but distinguishable because the discussion of whether the injuries resulted from an accident focused on Mr. Middleton's conduct and his liabilitynot Mrs. Middleton's. She had no liability because there was no causation between her conduct and the shooting. The Grayes' theory was that Mrs. Middleton had provoked the incidents that led up to the shooting. The court found lack of causation in that theory. Here, the Brumleys allege that David Lee negligently failed to protect Douglas from Kimberlee, knowing that Kimberlee was physically abusive to Douglas. The Grayes court did not analyze the accident question with respect to Mrs. Middleton's conduct. If the accident analysis as to Mr. Middleton's conduct would have also addressed Mrs. Middleton's liability, there would have been no need to discuss the causation issue as to her conduct. There is no discussion in the opinion of any severability clause. In Wasarovich, Joseph Wasarovich confronted his ex-wife Patricia in her home with her male roommate, August Feldt. Joseph killed Feldt, wounded his wife, and killed himself. Feldt's estate sought recovery against Patricia for negligently failing to protect him from her ex-husband. Patricia sought liability coverage under her homeowner's policy (Joseph and Patricia both being co-insureds). In a declaratory judgment action, the insurer moved for summary judgment on the coverage issue, arguing that Feldt's murder was not a covered occurrence (defined in the policy as an accident) and, alternatively, that the intentional injury exclusion applied. No severability clause is mentioned. The Court of Appeals of Michigan stated: By considering Ms. Wasarovich's role in the murder, the trial court confused the threshold issue whether a policy provides coverage with the provision excluding liability from injury as a result of an intentional act. 214 Mich. App. at 325. The court held: In determining whether an accident occurred, we must view the incident itself from the standpoint of the insured actor who caused the injury in question. 214 Mich. App. at 327. The dissent of Judge Root pointed out the lack of precedent directing such an interpretation and stated: The contract is silent in terms of the conflicting perspectives of coinsureds, leaving two equally possible constructions that can be placed on the policy.... [T]his contract is ambiguous and is interpreted in favor of the insured, Patricia Wasarovich. 214 Mich. App. at 331-32. Although Wasarovich supports Safeco's position on the accident question, the weakness in the majority's analysis is shown in the dissent. In Wilcox, minor plaintiffs brought claims of sexual abuse against Shirley Wilcox and her ex-husband, who were foster parents, as well as various other defendants. Shirley was allegedly negligent for failing to report her ex-husband's abusive actions and failing to warn or provide safety to the minors in her home against her exhusband's activities. Wilcox's liability insurer filed a declaratory judgment action, seeking a noncoverage determination in that no accident was alleged and Wilcox's and her ex-husband's conduct was intentional. The policy did not define accident. The trial court granted summary judgment to Wilcox and denied the insurer's summary judgment motion. The Supreme Court of Idaho reversed. Citing the definitions of accident contained in Black's Law Dictionary 14 (5th ed. 1979) and Webster's Encyclopedic Unabridged Dictionary 9 (1989), the court held that accident has a settled legal meaning or interpretation. The court looked to Wilcox's actions, not those of her ex-husband, in determining whether an accident had occurred: It is her conduct that we must look to, and not to her ex-husband's conduct, because she is the only one whose acts could be covered by the policy in question. 123 Idaho at 9. The court held: Looking to Wilcox's alleged conduct, we find that it is not an `occurrence' under the policies because it was not the conduct which caused injury. The injury suffered by the minors is child molestation. While the acts or failure to act by Wilcox may have created or contributed to the environment which permitted her ex-husband's conduct, Wilcox did not commit the acts complained of by the twelve anonymous plaintiffs. Therefore, the [policies] do not provide coverage for Wilcox. 123 Idaho at 9. No severability clause is discussed in Wilcox. The Wilcox court's analysis, as in Grayes, was based on a finding of lack of causation. The Brumleys cite the following cases to support their position that the term occurrence is ambiguous: Wayne Tp. Bd. of Sch. Com'rs v. Indiana Ins. Co., 650 N.E.2d 1205 (Ind. App. 1995); Hanover Ins. Co. v. Crocker, 688 A.2d 928 (Me. 1997); and Property Cas. Co. of MCA v. Conway, 147 N.J. 322, 687 A.2d 729 (1997). In Wayne Township, a claim of sexual molestation was brought against an elementary school principal and the school. While the principal's conduct was acknowledged as intentional, the school's conduct was characterized as negligent. The school's liability insurers denied coverage. The district court granted summary judgment to the insurers on the coverage issue on a number of grounds, including that there was no occurrence within the meaning of the policy, which defined that term as: `An accident... which results in bodily injury ... neither expected no[r] intended from the standpoint of the insured.' The policy also contained a severability clause. The Indiana Court of Appeals reversed the district court's ruling on the occurrence issue, holding that with respect to the school's alleged conduct, there was coverage: [T]he plain and unambiguous language of the policy requires that claims against each insured be treated separately. The child was molested by [the principal], who is an insured separate from the school under the Indiana Insurance policy. The inference of an intent to injure S.M. cannot be imputed to the school. 650 N.E.2d at 1209. The term occurrence was expressly defined to be determined from the standpoint of the insured. However, the severability clause also influenced the court's decision. In Crocker, a daughter brought a negligence action against her mother, alleging that the mother failed to take steps to prevent the father from sexually abusing the daughter after knowing about the abuse. The mother's homeowner's policy carrier sought a declaratory judgment that it owed no duty to defend or indemnify, in that no covered occurrence was alleged. The district court entered summary judgment against the insurer as to both the duty to defend and to indemnify. The Supreme Judicial Court of Maine affirmed the duty to defend determination but held that the duty to indemnify determination was premature. The policy defined occurrence as an accident, but did not define accident. The court focused on the alleged negligent conduct of the mother in determining that such conduct was an accident and a covered occurrence within the meaning of the policy. The court also determined that the exclusion for injuries either expected or intended from the standpoint of the insured did not apply, because the alleged negligent conduct of the mother was not intentional. 688 A.2d at 931. The insurer also argued that public policy should preclude coverage because otherwise, coverage for child molestation claims would be permitted through the back door. The court disagreed: Public policy does not prohibit insurance coverage for an insured whose negligence contributed to an injury from sexual abuse. 688 A.2d at 931. Conway considered the issue of whether a homeowner's policy covered the vicarious statutory liability of parents, the named insureds, for intentional vandalism of a public school by the insureds' minor son. The New Jersey Law Division found no coverage, the Appellate Division reversed, and the Supreme Court of New Jersey affirmed the Appellate Division. The policy defined occurrence as an accident, contained an exclusion for injury expected or intended by the insured, and also contained a severability clause. 147 N.J. at 325. In a declaratory action concerning coverage, the insurer argued that there was no occurrence in that there was no accident from the son's perspective. The court viewed the undefined term accident in the policy as introducing ambiguity into the definition of occurrence, thus construing against the insurer and noting that an act could be viewed as intentional from the perspective of one insured but need not be expected from that of another insured. 147 N.J. at 327. The court cited as persuasive cases from other jurisdictions dealing with similar factual circumstances in which coverage was afforded to parents held vicariously liable for acts of their children. The court also discounted the public policy argument of the insurer, stating: Permitting parents to insure against their vicarious liability increases the likelihood that funds will be available to compensate for damage to school property. 147 N.J. at 330. 13 Appleman, Insurance Law and Practice § 7486, p. 632 (1976) provides: The absence of any definition of the term `accident' in the policy merely means that an interpretation by law shall apply rather than an interpretation by contractual language. And where it is not defined in the policy, it must be interpreted in its usual, ordinary and popular sense. The word will, however, be accorded a liberal construction since it is ambiguous. See 10 Couch on Insurance 2d § 41:14 (1982): The fact that an accident is caused by or is traceable to the act of a person other than the insured does not prevent the occurrence from being an `accident'. When the injury is not the result of the misconduct or the participation of the in[s]ured party, it is, as to him, accidental although inflicted intentionally by the other party. 2 Windt on Insurance Claims & Disputes § 11.03, p. 194 (3d ed. 1995), identifies a split in the courts concerning whether there is a covered occurrence when the liability claim stems from an employee's intentional act of wrongdoing, and the employer is sued for negligent hiring, retention, or supervision. At § 11.03, p. 194-95 n.53, Windt discusses various cases taking the view that the employer's direct act of negligent hiring, etc. should be viewed as an occurrence. Safeco argues that because the occurrence definition is not in the policy exclusions portion of the policy, the rule of construction that an insurer must use clear and unambiguous language when limiting or excluding coverage should not apply. Safeco also points out the rule that the insured has the burden of proving he or she falls within the coverage provisions. However, notwithstanding those familiar rules of policy construction, even assuming the occurrence definition is a coverage provision, the question still remains whether the definition is ambiguous. If it is, then that ambiguity must be construed against the insurer, no matter what part of the policy it appears in. Whenever a liability policy bases coverage on an occurrence, defined in the policy as an accident, the term accident not being defined, ambiguity seems to arise whenever the conduct of more than one insured is involved in the claim. As the New Jersey Supreme Court noted in Conway, the same act can be viewed as either intentional or accidental, depending on the perspective used. The intentional act exclusion would appear to be superfluous if the occurrence definition and the term accident are interpreted as restricting coverage to the extent urged by Safeco. If the perspective of the injured person is used, then essentially any injury that the injured person did not inflict on himself or herself could be considered an accident, and the broadest possible coverage would be afforded. See 1 Long, The Law of Liability Insurance § 4.20[1], pp. X-XXX-XXX (1997) (The determination of an accident within the occurrence definition is to be made from the standpoint of the insured, not from the viewpoint of the victim to whom any calamity may seem to be unfortuitous.). In Raymer, 251 Kan. 689, this court considered a severability and exclusionary clause in a homeowner's liability policy in determining coverage for a negligent supervision claim against the parents for the child's vandalism of a school building. The opinion does not indicate that the insurer raised the issue of whether there was an occurrence within the meaning of the policy as a coverage defense, although that term was defined in the policy as follows: [O]ccurrence means: a sudden event, including continuous or repeated exposure to the same conditions, resulting in bodily injury or property damage neither expected nor intended by the insured. 251 Kan. at 691. This definition expressly provides that a resulting injury neither expected nor intended by the insured is included within the coverage. The occurrence definition in Raymer expressly referenced the term the insured. The severability clause would create ambiguity as to who is the insured. The definition of occurrence in the Safeco policy here simply defines it as an accident, omitting any provision that the resulting injury be neither expected nor intended by the insured. Should leaving out any reference to insured make the occurrence definition more or less ambiguous? Lack of any reference in the occurrence definition to the term insured may mean that the severability clause would by itself create no ambiguity. However, even without the severability clause, the definition still contains ambiguity, because it does not specify from whose perspective the accident determination is to be made. Aside from the effect that a severability clause may have, it would seem a strange result if a definition of occurrence containing accident as an undefined term were held to be less ambiguous that an occurrence definition containing accident as a defined term. We hold that the lack of any definition for accident in the Safeco policy and the failure to specify from whose standpoint the accident determination is to be made when more than one insured is involved weighs in favor of finding ambiguity in the occurrence definition and, therefore, construction in favor of the insured. Judgment of the Court of Appeals affirming the district court is reversed. Judgment of the district court is reversed. SIX, J., dissenting: I would affirm the district court and the Court of Appeals in denying coverage. I disagree with the majority's finding of ambiguity in the exclusion section of the Safeco policy. Upland Mutual Insurance, Inc. v. Noel, 214 Kan. 145, 519 P.2d 737 (1974), forms the departure point for the majority's discussion. A critical analysis of Upland is found in the dissent in Marquis v. State Farm Fire & Cas. Co., 265 Kan. 317, 335-40, 961 P.2d 1213 (1998). A part of that dissent merits repeating here.