Opinion ID: 183762
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Dunthorne Construction

Text: Appellants argue that European Colour directors failed in their safety-related duties during their business trips to the Fall River facility, and that the accident arose from these failures within the meaning of the insurance policy. As noted, they adduced evidence of several trips by Myles, Cooper, McKinlay, and Hughes, each of whom had certain responsibilities for safety at the Fall River facility. According to appellants, some of those individuals became aware of concerns regarding the safety of the materials lift or, despite a duty to become aware of such concerns, failed to do so. Those individuals then failed to report safety issues relating to the materials lift to European Colour's board, which would have been ultimately responsible for making a capital expenditure over $10,000 to repair or replace the lift. Appellants argue that European Colour's senior management and board were entirely dependent upon information learned on business visits and conveyed by McKinlay and Cooper, and thus, when exercising its control over capital expenditures for health and safety at Roma Color ..., European Colour was deprived of material information by European Colour directors who made business visits to the Fall River facility. As the district court explained, however, this argument conflate[s] questions of liability and causation. Hartford Fire Ins. Co., 678 F.Supp.2d at 13. Even if the evidence showed that there were failures to appreciate safety issues relating to the materials lift, or failures later to communicate concerns about the materials lift developed during business visits, the question is not whether the accident arose in part out of such omissions (the liability question), but rather whether the accident arose out of a business trip within the meaning of the policy (the insurance question). There is little doubt that the evidence adduced by the appellants would at least raise a genuine issue of material fact regarding the liability of European Colour for the accident. Without delving into the appropriate legal standard for liability, the evidence shows that four European Colour directors had various responsibilities regarding the safety of Roma Color employees at the Fall River facility. Myles was directly responsible for health and safety at the facility, Cooper was sent specifically to perform a safety audit there, and McKinlay conducted yet another health and safety review. Both Myles and Cooper were alerted by Clayton to some concerns regarding the materials lift, and McKinlay was also aware of requests for a capital expenditure on a new lift, but concluded that spending the money would be wasteful. Each of these acts and omissions arguably had some causal effect upon the state of the materials lift on the date of Custadio's accident, and thus implicated the liability of European Colour for that accident. The insurance question requires a different analysis of the same evidence. It turns not on the culpability of the European Colour directors for the accident, but rather on the relationship between the accident and the business visits of European Colour directors to the Fall River facility, and whether that relationship is sufficiently close to trigger coverage under the CNA Europe policy. In Dunthorne, the question was not whether the insured should have crossed the road or should have filled her gas tank, and whether the accident arose out of her culpable act or omission. Answers to those inquiries would resolve the issue of whether the insured (or her estate) was liable for the other driver's injuries. Indeed, the estate admitted that the claimant's injuries had been caused by [the insured]'s negligence. [1999] Lloyd's Rep. I.R. at 560. Rather, the question was whether the accident and resulting injuries arose out of the use of the car  the covered activity. In finding that the accident arose out of the use of the car, the court relied on the close relationship of the accident to the covered activity. The accident took place while the insured was still engaged in using  or trying to use  the car. The insured had just run out of gas and crossed the road to obtain help so she could continue using her car. Even with this proximity in time and place between the covered activity (use of the car) and the accident, the facts in Dunthorne put [the case] close to th[e] line marking the outer boundary of the arising out of language. [1999] Lloyd's Rep. I.R. at 563 (Hutchison, L.J.). Here, the accident and the business trips to the Fall River facility are connected by a tangled web of facts, many of which are remote in time and place from the accident. The directors took business trips to the Fall River facility, during which they received (or failed to elicit) information about the materials lift. They then made certain decisions  both during the trips and after  about what to report to the European Colour board in the United Kingdom, where decisions about the repair or replacement of the lift would be made. In making any determination regarding the lift, the board had a number of pieces of information before it, including those gleaned from visits by other directors both before and after the visits at issue, and it had to weigh the need for a new lift with other fiscal demands. Thus, even with a focus on the relationship between the accident and critical decisions by the United Kingdom board of directors about the repair or replacement of the materials lift, any action or inaction that took place during a business visit by European Colour directors had a causal relationship to the accident only in combination with a number of other interrelated facts of varying import for the accident. In sum, for the purpose of insurance coverage, the causation in this case is too complex and attenuated to fit within the arising out of confines of Dunthorne, and hence the business visits were not a contributing factor to the accident in a relevant causal sense. Id. at 562 (citing Gov't Ins. Office of New S. Wales 114 C.L.R. at 447). Thus, the CNA Europe policy did not cover European Colour's liability for the Custadio litigation. Affirmed.