State Farm Mut. Auto. Ins. Co. v. Roberts

• Citation: 697 A.2d 667,166 Vt. 452
• Decision Date: 06 June 1997
• Docket Number: No. 95-115,95-115
• Court: United States State Supreme Court of Vermont
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. David ROBERTS, Lyle Webb, Nationwide Mutual Insurance Company & Cooperative Fire Insurance Association of Vermont.

Page 667

697 A.2d 667

166 Vt. 452

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. David ROBERTS, Lyle Webb, Nationwide Mutual Insurance Company & Cooperative Fire Insurance Association of Vermont.

No. 95-115.

Supreme Court of Vermont.

June 6, 1997.

Robert G. Cain and William D. Riley of Paul, Frank & Collins, Inc., Burlington, for plaintiff-appellee.

James A. Dumont and John J. Cotter, Law Clerk (On the Brief), of Sessions, Keiner, Dumont & Barnes P.C., Middlebury, for defendant-appellant/cross-appellee Webb.

John Davis Buckley of Theriault & Joslin, P.C., Montpelier, for defendant-appellee Nationwide Mutual Insurance Company.

Richard P. Foote of Conley & Foote, Middlebury, for defendant-appellee/cross-appellant Cooperative Fire Insurance Association of Vermont.

Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ.

DOOLEY, Justice.

This declaratory judgment action concerns the contractual liability of three insurance companies with respect to an underlying tort suit brought by Lyle Webb after he was injured while unloading an engine from his truck into David Roberts' garage. In response to the parties' motions for summary judgment, the superior court ruled that both Roberts' automobile and homeowner insurers had a duty to defend and indemnify him. The court also ruled that the accident was not covered under Webb's automobile policy, and it dismissed Webb's bad-faith cross-claim against his insurer. Roberts' homeowner's insurer appeals, arguing that a coverage exclusion applies. ¹ We agree and reverse.

On the evening of January 21, 1991, Webb drove his uninsured dump truck to Roberts' home to drop off an engine for Roberts' pickup truck. Webb's visit was unexpected; apparently, Webb was repaying Roberts for some snowplowing Roberts had done for Webb. Because Roberts had no immediate use for the engine, he decided to store it in his garage. Webb backed his dump truck to the garage entrance, tilted the bed of the truck to facilitate unloading the engine, and opened the tailgate. In order to slide the engine to the garage floor, the two men placed a piece of plywood at the end of the tailgate to form a ramp. They attempted to slide the engine from the truck bed, down the plywood ramp, and onto the garage floor. Each man kept one foot in the bed of the truck and placed one foot on the plywood board. As they began to push the engine down the ramp, the ramp slipped from its position, causing Webb to fall into the garage wall and onto the floor, where the engine rolled on his hand. Webb sued Roberts, claiming he was injured as the result of Roberts' negligence in directing that the plywood be placed on an icy area of the garage floor.

At the time of the accident, three insurance policies were in force. Roberts had an automobile policy from State Farm Mutual Automobile Insurance Company that contained a provision covering liability for use of a nonowned vehicle. Roberts also had a homeowner's policy from Cooperative Fire Insurance Company of Vermont that excluded coverage for liability resulting "directly or indirectly" from "the ownership, operation, maintenance, use, occupancy, renting, loaning, entrusting, supervision, loading or unloading by an insured of motorized vehicles." Webb had an automobile policy issued by Nationwide Mutual Insurance Company that covered another truck he owned, but did not cover the dump truck involved in this litigation. That policy contains uninsured-underinsured motorist coverage.

In its summary judgment order, the superior court ruled that (1) State Farm was required to defend and indemnify Roberts under its nonowned-vehicle policy provision; (2) Cooperative Fire was required to defend and indemnify Roberts notwithstanding the automobile exclusion in its homeowner's policy because one of the alleged causes of the accident was an included risk--ice on the garage floor; and (3) Nationwide was not required to extend uninsured-motorist coverage to the claim, and thus did not act in bad faith in denying coverage, because it did not insure Webb's dump truck, and Roberts was an insured motorist. Only Webb and Cooperative Fire appealed from the order.

Following the declaratory judgment ruling, Webb's tort suit went to trial and resulted in a defendant's verdict, which was affirmed on appeal to this Court. The resolution of the underlying suit has mooted the dispute over whether Nationwide was required to extend uninsured-motorist coverage to Webb's claim. It has also mooted any dispute over Cooperative Fire's obligation to indemnify Roberts. There remains, however, a live dispute over the cost of the defense of the underlying suit between State Farm and Cooperative Fire. We must, therefore, decide Cooperative Fire's appeal of the superior court's decision that Cooperative Fire had an obligation to defend Roberts.

The issue turns on whether the doctrine of concurrent causation applies in light of the language of the policy and the facts surrounding the accident. Under that doctrine, if the liability of an insured arises from concurrent but separate nonvehicle-related and vehicle-related negligent acts, and the nonvehicle-related act is an included risk under the insured's homeowner's policy, coverage exists even though the policy contains an automobile exclusion. 7A J. Appleman, Insurance Law and Practice § 4500, at 179-80 (1979). In other words, if an occurrence is caused by a risk included within the policy, coverage may not be denied merely because a separate excluded risk was an additional cause of the accident. Id. at 179.

The leading case on the concurrent causation doctrine is State Farm Mutual Automobile Insurance Co. v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123 (1973). In that case, after filing the trigger of a pistol to create a "hair trigger action," the insured and a friend headed with the pistol into rough terrain hunting jackrabbits in their four-wheel-drive vehicle. When the vehicle hit a bump, the pistol discharged and injured the friend, who sued the insured. The homeowner's policy insurer denied coverage, relying on a policy provision that excluded coverage for bodily injury "arising out of" the use of any motor vehicle. The California Supreme Court held that the claim of the friend was covered because both vehicle-related and nonvehicle-related risks proximately caused the injury and the insured's liability. Id. 109 Cal.Rptr. at 820, 514 P.2d at 132. According to the court:

Here.... an insured risk (the modification of the gun) combined with an excluded risk (the negligent use of the car) to produce the ultimate injury. Although there may be some question whether either of the two causes in the instant case can be properly characterized as the "prime," "moving" or "efficient" cause of the accident we believe that coverage under a liability insurance policy is equally available to an insured whenever an insured risk constitutes simply a concurrent proximate cause of the injuries.

Id. at 818, 514 P.2d at 130 (footnotes omitted).

In applying this holding to a variety of fact patterns in later cases, the California appellate courts have focused on whether the act that gave rise to the alleged liability under the homeowner's policy was independent of the act that constituted use of the vehicle. See, e.g., Daggs v. Foremost Ins. Co., 148 Cal.App.3d 726, 196 Cal.Rptr. 193, 196 (1983) (no coverage under premises liability policy because conduct of insureds in failing to design safe motorcross race course was dependent upon use of motor vehicles); Safeco Ins. Co. v. Gilstrap, 141 Cal.App.3d 524, 190 Cal.Rptr. 425, 427 (1983) (no liability under homeowner's policy because conduct of insureds in negligently entrusting vehicle to their son, who was in accident with another vehicle, was dependent upon and related to use of motor vehicle); Allstate Ins. Co. v. Jones, 139 Cal.App.3d 271, 188 Cal.Rptr. 557, 561 (1983) (no liability under homeowner's policy for improperly loading rebar on truck, where truck collided with car and rebar flew out and hit driver of car, because negligent conduct depended upon truck's movement to become hazardous).

Although Cooperative Fire argues that we should not adopt the concurrent-causation doctrine, at least not in light of the wording of its policy, it urges alternatively that we embrace a restatement of the elements of the doctrine in Garvey v. State Farm Fire & Casualty Co., 227 Cal.Rptr. 209 (Ct.App.1986). Under the court's analysis in that case, when included nonvehicle-related and excluded vehicle-related acts concur to cause an accident, coverage exists under the homeowner's policy notwithstanding the automobile exclusion if either (1) the same loss could have occurred even absent the vehicle-related cause; or (2) the same loss could not have occurred absent the vehicle-related cause, but the nonvehicle-related cause set in motion the vehicle-related cause. Id. at 219 n. 10. The court, which reversed a directed verdict for the insureds in this first-party property loss case, ² acknowledged that its analysis did not resolve all potential coverage scenarios, such as when two dependent causes simultaneously contribute to a loss but neither cause sets the other in motion. Id.

The California Supreme Court affirmed Garvey, but did not explicitly adopt the district court's analysis, because it refused to extend Partridge to first-party property-loss cases, stating that Partridge "should be utilized only in liability cases in which true concurrent causes, each originating from an independent act of negligence, simultaneously join together to produce injury." Garvey v. State Farm Fire & Casualty Co., 48 Cal.3d 395, 257 Cal.Rptr. 292, 293, 770 P.2d 704, 705 (1989).

Courts in several other jurisdictions have adopted the concurrent-causation doctrine set forth in Partridge, although there has been no consensus on the legal test for determining when included and excluded causes are sufficiently independent...