STATE AUTO PROPERTY AND CAS. CO. v. Matty

• Decision Date: 01 March 2010
• Docket Number: No. S09Q1846.,S09Q1846.
• Parties: STATE AUTO PROPERTY AND CASUALTY COMPANY v. MATTY et al.
• Court: Georgia Supreme Court

690 S.E.2d 614

STATE AUTO PROPERTY AND CASUALTY COMPANY v. MATTY et al.

No. S09Q1846.

Supreme Court of Georgia.

March 1, 2010.

Savell & Williams, Jeffrey A. Van Duyne, William E. Turnipseed, Atlanta, for appellant.

Daugherty, Crawford, Fuller & Brown, Peter J. Daugherty, Dustin T. Brown, Cash, Krugler & Fredericks, Andrew B. Cash, Susanne W. Langlais, Berry, Shelnut, Day & Hoffman, Peter B. Hoffman, Columbus, for appellees.

NAHMIAS, Justice.

The United States District Court for the Middle District of Georgia has certified a question to this Court about how to determine the meaning of the term "accident" in an automobile liability insurance policy when the word is not expressly defined in the policy and, more specifically, how to determine if there has been one accident or two when an insured vehicle strikes one claimant and then very shortly thereafter strikes another. See State Auto Property & Cas. Co. v. Matty, 2009 WL 2216605 at *5, 2009 U.S. Dist. LEXIS 61632 at *18 (M.D.Ga. July 20, 2009). Correctly concluding that there is no Georgia case law on point, the district court's order asks which of three general analytical approaches adopted by other jurisdictions for construing the term "accident" Georgia would adopt—the "cause" theory, the "effect" theory, or the "event" theory. Id., 2009 WL 2216605 at *3-5, 2009 U.S. Dist. LEXIS 61632 at *10-18. For the reasons that follow, we conclude the meaning of the term "accident," when not otherwise defined in setting limits of liability, should be determined using the cause theory. Application of that theory, in turn, will determine the number of accidents and the limits of liability in cases such as this one.

This case involves automobile liability insurance claims. A vehicle driven by State Auto's insured (Rachel Griffin) struck a bicyclist (Matthew Matty), killing him. Griffin's car then struck a second bicyclist (Jeffrey Davis), seriously injuring him. An accident reconstruction expert testified that, assuming the insured had traveled at a constant speed of 55 miles per hour (the speed limit) from the point she struck the first bicyclist to the point where she struck the second one, it would have taken her "just over a second" to travel the 95 to 115 feet between the two bicyclists.

The insured's policy with State Auto contains a limit of liability for bodily injury of $100,000 for "each accident." The policy also provides, in part, that this limit of liability is the "maximum limit of liability for all damages resulting from any one auto accident. This is the most State Auto will pay regardless of the number of: 1. `Insureds'; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the auto accident." The policy does not define "accident," "each accident," or "any one accident."

State Auto contends that the incident in which Griffin struck the bicyclists ("claimants") constitutes one accident and that it is therefore responsible for providing only a single $100,000 limit of coverage. The claimants, on the other hand, contend that there were two accidents and that State Auto is responsible for providing two $100,000 limits of coverage.

1. Before turning to the different theories employed around the country for construing the word "accident" when it is not defined in a liability insurance policy, we address a principal contention of the claimants. They argue that, applying the rule of contract construction that courts may look to statutory and dictionary definitions of a term not defined in a contract to supply the meaning of the term, "accident" must be construed to mean that two different impacts constitute two different accidents. They note that "accident" is defined in OCGA § 1-3-3(2) to mean "an event which takes place without one's foresight or expectation or design." Because that statutory definition does not help, the claimants then look to dictionary definitions of one of the words used in the statute, noting that "event" is defined variously as "a phenomenon or occurrence located at a single point in space-time," The American Heritage Dictionary of the English Language (4th ed.2006), and as "any incident, good or bad," Webster's Revised Unabridged Dictionary (2006). The claimants assert that, under either of these definitions, two impacts cannot be considered one "event" and therefore one "accident." Such interweaving of inconsistent definitions of words defined in dictionaries with words defined in statutes is a slender reed upon which to base a clear meaning of a contractual term. In any event, these definitions do not dispense with the rule that contracts must be construed as a whole, Sherman & Hemstreet, Inc. v. Cincinnati Ins. Co., 277 Ga. 734, 737, 594 S.E.2d 648 (2004), or with the cardinal rule of construction, which is to ascertain the intent of the parties, OCGA § 13-2-3.

The policy at issue in this case, viewed as a whole, shows a clear intent to limit liability in accidents involving multiple vehicles. The term "each accident" appears in the limitation of liability section of the policy, which provides that the limit of liability of $100,000 for "each accident" is "the most State Auto will pay regardless of the number of: 1. `Insureds'; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the auto accident." Automobile accidents involving multiple vehicles and multiple injured parties (insureds and third parties) are an everyday occurrence on our roads. Recognizing this reality, this contractual language contemplates that there can be a single accident in which there are multiple vehicles, injured parties, and claims and provides that for that type of accident, there will be a liability limit of $100,000. See Banner v. Raisin Valley, Inc., 31 F.Supp.2d 591, 592 (N.D.Ohio 1998) (a limitation of liability "per accident" regardless of number of vehicles indicates "accident" is meant to encompass multiple vehicle collisions). Moreover, by placing the term "accident" in the limitation of liability section, "manifestly, it was intended that the policy have monetary limits of coverage." St. Paul-Mercury Indem. Co. v. Rutland, 225 F.2d 689, 692 (5th Cir.1955).

Defining accident as urged by the claimants—that is, by the number of impacts regardless of how close in time and place they occurred—would mean that there can never be one accident and a $100,000 limit of liability in a multiple vehicle collision, because it is virtually impossible for multiple vehicles to collide truly simultaneously (at a "single point in space-time," to use one of the dictionary definitions). See Banner, 31 F.Supp.2d at 592. Under the claimant's construction, the policy's $100,000 limitation of liability "regardless of the number of ... vehicles involved" would be meaningless in almost any collision involving multiple vehicles, as State Auto would have to pay $100,000 for each impact. That is plainly not the intent of the contract.

Accordingly, we reject the claimant's overly narrow construction of the word "accident" and turn to the district court's broader question—which theory for construing the term should be adopted in Georgia when "accident" is not specifically defined.

2. Of the three theories that have been adopted by courts around the country to aid in the construction of the word "accident," the clear majority rule is the "cause" theory. See, e.g., Rutland, 225 F.2d at 692-693; Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56, 61 (3d Cir.1982); Gordon L. Ohlsson, The Law of Liability Insurance § 2.053a (Matthew Bender 2009). See generally Banner, 31 F.Supp.2d at 593-594 (collecting cases). Under this theory, the number of accidents is determined by the number of causes of the injuries, with the court asking if "`"there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damage."'" Appalachian, 676 F.2d at 61 (citations omitted). In the context of vehicle accidents involving multiple collisions that do not occur simultaneously (recognizing that it is almost impossible that such collisions can occur without any difference in time and place), courts look to whether, after the cause of the initial collision, the driver regained control of the vehicle before a subsequent collision, so that it can be said there was a second intervening cause and therefore a second accident. Banner, 31 F.Supp.2d at 593; Illinois National Ins. Co. v. Szczepkowicz, 185 Ill.App.3d 1091, 134 Ill.Dec. 90, 542 N.E.2d 90, 92-93 (1989).

The second approach, used by a minority of courts, is the "effect" theory. Under it, the number of accidents is determined from the point of view of the person who was injured, so that each individual injury constitutes a separate "accident." See, e.g., Anchor Cas. Co. v. McCaleb, 178 F.2d 322, 324-325 (5th Cir.1949); Ohlsson at 2.053b. This theory stems from an 1891 decision of an English court. Id. (citing South Staffordshire Tramways Co. v. Sickness & Accident Assurance Assn., 1 Q.B. 402 (1891)).

The final theory, used by some courts, is known as the "event" theory. Under it, a court looks to the number of events that resulted in the injuries and liability in question. Shamblin v. Nationwide Mutual Ins. Co., 175 W.Va. 337, 332 S.E.2d 639, 644 (1985). If the injuries resulted from an event, "unbroken with no intervening agent or operative factor," there is but one accident under the policy. Hartford Accident & Indem. Co. v. Wesolowski, 33 N.Y.2d 169, 174, 350 N.Y.S.2d 895, 305 N.E.2d 907 (1973). Accord Shamblin, 332 S.E.2d at 644. Courts adopting the event theory have done so based on their conclusion that the basis for liability under an insurance policy is "an event (the collision) resulting in bodily injury or property damage." Id.¹

In deciding which of these theories to adopt, it is instructive to consider them as applied to the facts of the Rutland case. In Rutland, a truck owned by Rutland...