Allstate Ins. Co. v. Watts

• Decision Date: 10 June 1991
• Docket Number: No. 1,1
• Citation: 811 S.W.2d 883
• Parties: ALLSTATE INSURANCE COMPANY, Plaintiff-Appellee, v. Bobby L. WATTS, and wife, Jeanne Watts, and Dewey Crafton and wife, Louise Crafton, Defendants-Appellants. /. 811 S.W.2d 883
• Court: Tennessee Supreme Court

Page 883

811 S.W.2d 883

ALLSTATE INSURANCE COMPANY, Plaintiff-Appellee, v. Bobby L. WATTS, and wife, Jeanne Watts, and Dewey Crafton and wife, Louise Crafton, Defendants-Appellants.

No. 1/.

811 S.W.2d 883

Supreme Court of Tennessee at Jackson.

June 10, 1991.

Robert T. Keeton, Jr., Robert T. Keeton, III, Huntingdon, Charles L. Hicks, Camden, for defendants-appellants.

Leo Bearman, Jr., M. Scott Willhite, Memphis, David F. Hessing, Paris, for plaintiff-appellee.

OPINION

DROWOTA, Justice.

This declaratory judgment litigation was filed by Allstate Insurance Company, Plaintiff-Appellee, to determine whether liability under a homeowner's policy issued to Dewey and Louise Crafton was negated by an exclusion for injuries arising out of the maintenance of a motor vehicle. The trial court, using the concurrent cause doctrine, held that Allstate was obligated to provide coverage to the policyholders. The Court of Appeals, using the chain of events doctrine, reversed. For the reasons set forth below, we find that the exclusion does not apply and, accordingly, reinstate the judgment of the trial court.

The insureds owned an "Allstate Deluxe Homeowner's Policy" which was issued to them by the Plaintiff, Allstate Insurance Company. The policy contains an exclusion which states: "We do not cover bodily injury or property damage arising out of the ownership, maintenance, use, occupancy ... loading or unloading of any motorized land vehicle or trailer." The exclusion is contained in a section of the policy that provides: "Allstate will pay all sums arising from an accidental loss which an insured person becomes legally obligated to pay as damages because of bodily injury or property damage covered by this part of the policy."

The facts in this case are essentially undisputed. In December, 1987, Dewey Crafton, the insured, was assisting Joseph Cole in replacing the brake shoes on Cole's truck. Because of rainy weather, the truck was backed partially into Crafton's garage which was attached to his house. The two men had been working on the truck for approximately an hour and a half and were experiencing difficulty in removing all of the lug nuts from one of the wheels upon which they were going to replace the brake shoes. Bobby Watts, a friend of Crafton's who had a welding torch in his vehicle, happened to stop by Crafton's garage for a visit while Crafton and Cole were having trouble with the "frozen" lug nuts. After talking to the other men a few minutes and learning of their trouble with the lug nuts, Watts agreed to use his torch to facilitate their removal.

Prior to turning on the torch, Watts inquired of Crafton whether there were any flammable materials in the garage, and was advised that there were none. Watts then applied the torch to one of the lug bolts, but even then the nut could not be removed. Crafton then asked Watts to cut the bolt off with the torch and Watts obliged. As the bolt was being cut, sparks scattered about on the garage floor and ignited a pan of flammable liquid under the truck approximately five to ten feet away from where the men were working. Turning off the torch, Watts noticed the fire in the pan and called Crafton's attention to it. When Crafton picked up the pan and started for the open garage door, he dropped it to the floor due to the heat and inadvertently kicked it, whereupon the flammable liquid splashed onto Watts, igniting his clothes and causing burns.

As a result of his injuries, Watts brought a lawsuit against Crafton in which he alleged that Crafton was negligent in failing to warn him of the presence of the flammable substance after having been asked whether any such substance was in the area, and in picking up the hot pan, dropping it, and kicking it. Allstate then filed this declaratory judgment action after denying insurance coverage, contending that the injuries to Watts arose out of the maintenance of an automobile, and thus fell within the exclusion noted above.

Following a bench trial, the trial court found that there were two causes of the injuries; one, using the torch on the vehicle, which was an excludable risk under the policy and, second, the negligence of Crafton in failing to warn and in ultimately kicking the pan, which was a nonvehicle related risk which would not fall within the exclusion. ¹ The trial court concluded that under these circumstances, coverage should be provided. The Court of Appeals reversed, holding that regardless of Crafton's purported negligence, the exclusion applied because the use of the cutting torch was "maintenance" of a vehicle, and was also the efficient and predominating cause of the injuries to Watts. According to the Court of Appeals, "[i]rrespective of whether or not Crafton was guilty of negligence in leaving a pan of flammable liquid in the garage and not so advising Watts, if the sparks from Watts' cutting torch had not set the chain of events in motion, the injuries and damages sustained by Watts would not have occurred." This appeal followed.

I.

Allstate argues that there is no coverage because the circumstances surrounding the injuries to Watts were all involved in the maintenance of Cole's truck. The argument is advanced that the phrase "arising out of" is sufficiently broad that it denotes the existence of any causal relationship. According to Allstate, the chain of events was begun by the maintenance of the truck and without such action no injuries could have occurred. Furthermore, Allstate contends that the placement of the flammable liquid and the failure to warn about it was merely a condition, or at best a remote cause, whereby the injuries to Watts could have taken place. The insured, on the other hand, urges this Court to adopt the approach taken by the trial court. That is, there are two independent causes responsible for the ultimate result, one excludable (using the torch itself in maintaining the vehicle) and the other not excludable (the actions of Crafton in failing to warn and in handling the burning substance).

It is well settled that exceptions, exclusions and limitations in insurance policies must be construed against the insurance company and in favor of the insured. Travelers Insurance Co. v. Aetna Cas. & Sur. Co., 491 S.W.2d 363, 367 (Tenn.1973). In the Travelers case, the insuror had issued a homeowner's policy to a family providing coverage for liability. The policy contained an exclusion for personal liability "arising out of the ownership, maintenance, use, including loading and unloading, of any automobile...." The Court was called upon to construe this language when a passenger was injured after a shotgun discharged while it was being loaded into a vehicle by an insured. The insurer argued that the injury resulted from the "use" of the vehicle. In finding coverage, the Court explained that the "accident could have occurred anywhere, the precise reason why homeowner's insurance is procured." Travelers, 491 S.W.2d at 367. The Court also noted that a "mere connection" with the loading of the vehicle was not sufficient to destroy coverage under the facts of the case.

In an unreported decision, Almany v. Nationwide Ins. Co., 1987 WL 4745 ², a section of our intermediate appellate court held that coverage was provided under a homeowner's policy containing an exclusion for damages "arising out of the ownership, maintenance, use ... of a motor vehicle." The case involved an insured who was driving her automobile when it ran out of gas. A friend of the insured drove her to a service station where they filled a gallon jug with gasoline. While attempting to pour the gasoline from the jug into the tank of the car, some of it spilled on the insured's feet and also on the friend from the waist down. The insured used a towel from her car to catch the spilling gasoline and then, in an attempt to dispose of the gasoline-soaked towel, ignited it with a cigarette lighter and threw it onto the ground. When the friend saw the burning towel, she moved toward it in order to stamp out the fire, but instead received substantial burns.

The Court of Appeals in Almany noted that the injuries resulted from both vehicle-related and nonvehicle-related causes. The insured's efforts to pour gasoline into her automobile without a funnel was obviously vehicle-related. However, the act of igniting the gasoline soaked towel was not vehicle-related. The Court indicated that a homeowner's carrier should not be relieved from its obligations under a policy unless it has been determined that the injuries did not result, even in part, from a risk for which it provided coverage and collected a premium. See also, Jorgensen v. Auto-Owners Ins. Co., 360 N.W.2d 397, 401 (Minn.App.1985). The Court also opined that the insurer was liable under the "concurrent causation doctrine" which provides that coverage under a liability policy is equally available to an insured whenever an insured risk constitutes a concurrent proximate cause of the injury. Other courts have used this doctrine to hold homeowner's insurance carriers liable for injuries resulting from a combination of vehicle-related and nonvehicle-related causes. See generally, Annotation, Construction and Effect of Provision Excluding Liability for Automobile Related Injuries or Damage From Coverage of Homeowners...