Opinion ID: 1506273
Heading Depth: 1
Heading Rank: 1

Heading: Whether the Court of Appeals erred in setting aside the jury verdict

Text: By order dated March 3, 1997, the Jefferson Circuit Court allowed the fortuity defense to proceed to jury trial. Originally, this defense potentially applied to the comprehensive general liability policies held by several of the insureds. However, prior to trial ANI had reached a settlement with all but the Commonwealth and U.S. Ecology. Appellants, ANI, argue the Court of Appeals erred in setting aside the jury verdict on the issue of fortuity. They cite what they contend are multiple errors by the Court, including (1) the Court of Appeals ignoring the fact that the trial court correctly instructed the jury at the close of trial on the issue that had been tried to the jury by agreement of the parties, (2) the Court of Appeal's finding that the Commonwealth had preserved the objection to the instructions as required by CR 51(3), and (3) the Court of Appeal's holding that the trial court's instructions were erroneous in light of this Court's decision in Brown Foundation, supra . To address these arguments, we state first that we agree with ANI and the Court of Appeals that the requirement that loss be fortuitous, i.e. not intended, is a concept inherent in all liability policies. Fortuity must be judged using a subjective standard, because requiring this knowledge element best serves the overall principle of insurance law. Aetna Cas. & Sur. Co. v. Dow Chemical Co., 10 F.Supp.2d 771, 789 (E.D.Mich.1998) (internal quotes and citations omitted). The crucial issue is whether [the insured] was aware... of an immediate threat of the [injury] for which it was ultimately held responsible and for which it now seeks coverage, not the [insured's] awareness of its legal liability for that [injury]. Id. at 790. Second, we dispel ANI's argument that the Commonwealth waived any error with respect to the jury instructions by its submission of a proposed instruction substantially similar in form to that actually tendered to the jury. The Commonwealth offered two alternate instructions regarding fortuity before the close of the trial. And as the process for developing jury instructions continued throughout the trial, the Commonwealth's late offering of its preferred fortuity instruction does not hinder its ability to argue on appeal that such an instruction was proper. We find the Commonwealth properly preserved its objection to the given jury instruction, which improperly focused on the fortuity of the response costs (damages), instead of the fortuity of the harm (property damage), by its offer of an alternative instruction incorporating its position, which was substantively opposite from that the court chose to give. CR 51(3) allows an offered instruction as one method to preserve a party's objection to an offering or failure to offer an instruction. We also find the Commonwealth's proffered instruction to more accurately state the law as spoken to in Brown Foundation, supra . In Brown Foundation , this Court addressed the issue of fortuity regarding a claim for insurance coverage. The case mirrors the case at hand in that it involved insureds seeking coverage to pay for an environmental cleanup ordered by the EPA pursuant to CERCLA. We held the Foundation was entitled to coverage under its policies unless it had specific and subjective intent to cause the pollution giving rise to the CERCLA claims. Equating the reasoning of Brown to the case at hand, the Commonwealth is entitled to insurance coverage unless it specifically and subjectively intended to cause the migration of radioactive contamination. Therefore, we affirm the Court of Appeal's finding of reversible error due to the giving of an erroneous jury instruction, which we believe misled the jury on the issue of fortuity.