N. W. Elec. Power Co-op., Inc. v. American Motorists Ins. Co.

• Decision Date: 01 December 1969
• Docket Number: No. 25203,25203
• Citation: 451 S.W.2d 356
• Parties: N. W. ELECTRIC POWER COOPERATIVE, INC., a Missouri corporation, Respondent. v. AMERICAN MOTORISTS INSURANCE COMPANY, an Illinois Corporation, Appellant.
• Court: Missouri Court of Appeals

Page 356

451 S.W.2d 356

N. W. ELECTRIC POWER COOPERATIVE, INC., a Missouri corporation, Respondent. v. AMERICAN MOTORISTS INSURANCE COMPANY, an Illinois Corporation, Appellant.

No. 25203.

Kansas City Court of Appeals, Missouri.

Dec. 1, 1969.

Motion for Rehearing and/or Transfer to Supreme Court Denied

Feb. 2, 1970.

Application to Transfer Denied April 13, 1970.

Roy F. Carter, Sprinkle, Carter, Larson & Hanna, Kansas City, for appellant.

David R. Clevenger, Platte City, Eugene E. Andereck, Pickett, Andereck & Hauck, Trenton, for respondent.

SHANGLER, Judge.

Plaintiff N. W. Electric Power Cooperative, Inc., a supplier of electrical power with operations in Missouri and Arkansas, was insured by defendant American Motorists Insurance Company against liability imposed upon it by law for damages because of injury to property 'caused by accident'. This action, the culmination of a dispute which has beset the parties for some time, represents the second appeal to this court by defendant from judgments, in each instance of $2,862.48 in favor of plaintiff. In those actions, plaintiff sought, and recovered, certain costs incurred when defendant refused to defend a suit brought against plaintiff by Donald C. Pharis and Helen E. Pharis, and then refused to satisfy the judgment which ensued. Although we recount only those salient facts necessary to a rational discussion of the issues presented, we must recede somewhat in time to do so. Our previous opinion is reported in Northwest Electric Power Co-operative, Inc. v. American Motorists Insurance Company, Mo.App., 346 S.W.2d 701.

In 1951, Donald C. Pharis and Helen E. Pharis, his wife, granted plaintiff an easement for the construction of a transmission line over their land. After it had been erected, they sued plaintiff Cooperative for damages, alleging in their petition that the line had been located in the middle of their tract rather than across a corner of it as plaintiff had represented it would do. The Pharises claimed damage had been done to their trees, crops and land and sought both actual and punitive damages. Defendant American Motorists initially refused to defend the Cooperative in that action, disclaiming that the damages were 'caused by accident', but then agreed to defend under a reservation of rights. Plaintiff Cooperative became distrustful of the fitful interest manifested by the defendant insurer in the defense of the Pharis action, and so assumed its defense. In any event, it had learned through defendant insurer's attorney that defendant did not intend to satisfy any defendant which might be obtained by Mr. and Mrs. Pharis. Thereafter, the Pharis petition was amended to allege the grant of an easement 100 feet wide to the Cooperative and that in the construction of the transmission line, 'defendant accidentally and negligently got off the right of way granted to defendant', causing damage to the Pharis land, trees, etc. The Cooperative, in its answer, admitted the execution of that easement and construction of the transmission line. Judgment was entered for Mr. and Mrs. Pharis for $1,750.00, and was satisfied by the Cooperative.

Thereupon, plaintiff sued and recovered a judgment against defendant for $2,862.48 as reimbursement for expenses attending the defense of the Pharis suit and for the satisfaction of that judgment. The appeal from that judgment was to this court. We reversed, because '(t)he (Pharis) judgment upon which plaintiff relied does not decide the precise fact that determines coverage, i.e., whether or not the damage was caused by accident'.

The case was retried to the court upon remand. Numerous exhibits used in the previous trial were received in evidence as well as the deposition of Mr. Pharis and the greater portion of the transcript of the prior trial. Additionally, the plaintiffs presented the testimony of Jim Galligher, plaintiff's field engineer, and that of Mr. Pharis himself. Evidence was adduced tending to establish the nature of the occurrence occasioning plaintiff's damages. Plaintiff once again had judgment for $2,862.48 and defendant once again appeals.

Defendant contends the judgment is fallible in two respects. Firstly, that there was no evidence that plaintiff's damages were caused by accident within the meaning of the insurance policy. Secondly, that there was a failure of proof as to the damages sustained by the Pharises.

The evidence bearing directly upon the manner in which the damage to the Pharis property was occasioned is limited to the testimony of Mr. Galligher, plaintiff's field engineer, and of Mr. Pharis himself. Mr. Galligher testified from several drawings which depicted a well-defined right-of-way over the Pharis property. Mr. Pharis testified that, as the right-of-way was located on 'extremely rough ground', he permitted the Cooperative access to it by means of his private road. In constructing the transmission line, the Cooperative used many types of heavy equipment. In the course of their use, they went beyond the confines of both the private road and the 100 feet easement. The land was so extensively damaged thereby as to still be visible 'twelve or fifteen years later'. Trees standing outside the range of the easement were felled; his gates and fences were also damaged. This evidence established the Cooperative's negligence, as broadly pleaded, and a technical trespass, as well. It remains to be determined, howsoever designated, whether these acts of the Cooperative are comprehended within the policy term 'accident'.

The policy in question is one of 'Comprehensive General Liability'. The provision of our immediate concern reads:

'Coverage B-Property Damage Liability. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident.' (Emphasis added)

Defendant's first major contention is, in effect, that whatever damages the Pharises may have suffered, they were not 'caused by accident' within the policy provisions. This argument contains three cognate components: (1) 'Accidental means' and 'accidental cause' are synonymous, and 'caused by accident' is equivalent to both. ¹ Therefore, it is to the cause (or means) of an act to which we must look, not the result, to determine if it was accidental. ² (2) It follows, it is further argued, that even if the result be unexpected, if it attends the doing of an intentional act, it cannot be accidentally caused. ³ Neither may an effect which is the natural and probable consequence of a voluntary act be said to have been brought about by accidental means. ⁴ (3) Defendant's ultimate deduction is that since the damage suffered by the Pharises was caused by a 'voluntary intentional act' of plaintiff in moving off the permitted way and easement, 'it was not caused by accident'. The fortuity that such 'voluntary intentional act' may have had unexpected and detrimental results for the Pharises makes no difference. These three conjunctive points are so subtly interrelated that a consideration of any one necessarily involves the consideration of the other two.

It will be noted that the Missouri authorities cited in support of these positions all involve policies of accident insurance or of life insurance with double indemnity provisions. The distinctions such cases make and the definitions they contain have generally not been applied in the construction of liability policies. Chemtec Midwest Serv. Inc. v. Insurance Company of North America, (D.C., W.D.Wis.), 288 F.Supp. 763, 768; Annotation, 166 A.L.R. 469. To hold otherwise would be to intorduce factitious considerations of ends and means, distinctions 'impossible of proper application', inevitably tending to absurd solutions. White v. Smith, Mo.App., 440 S.W.2d 497, 506; Mr. Justice Cardozo's dissent in Landress v. Phoenix Mutual Life Ins. Co., 291 U.S. 491, 499, 54 S.Ct. 461, 463, 78 L.Ed. 934, 938.

To support its conjunctive argument that the Pharises' damages were not 'caused by accident' because they were 'the natural consequences' of the acts of the Cooperative's employees, and were thus readily foreseeable, defendant relies principally on Neale Const. Co., Inc. v. United States Fidelity & Guaranty Co. (10 Cir.), 199 F.2d 591 (1952) and Hardware Mutual Cas. Co. v. Gerrits (Florida), 65 So.2d 69. In Neale, the court construed 'accident' as used in a liability policy and as declared by the state courts of Kansas. It was there held that the breaking of certain wires as a result of defective spinning by a contractor was not an 'accident' because 'the natural and ordinary consequence(s) of a negligent act do not constitute an accident'. In Hutchinson Water Co. v. United States Fidelity and Guaranty Co. (10 Cir.), 250 F.2d 892, 894 (1957), however, the same court poignantly acknowledged the virtual reductio ad absurdum which the holding in Neale had made of the role of liability insurance policies containing such a provision.

'Apparently we did not contemplate whither this logic would lead us. For, if the policy did not cover the loss because the natural and probable consequences of the negligent act did not constitute an accident, then by the same logic, there would be no liability where the damage was the unexpected, hence unforeseen result of the negligent act. In the first instance, the damage would be foreseeable and therefore not accidental; in the latter instance, the damage would not be foreseeable and hence no liability upon the insured for his negligent acts. In either instance the insurer would be free of coverage and the policy would be rendered meaningless.'

The rationale in the Gerrits case, also cited by defendant on this point, must be deemed to be repudiated by the holding in Hutchinson Water Co. v. United States Fidelity and Guaranty Co., supra. To ascribe to 'accident' this meaning defendant contends for 'would manifestly defeat...