Coverage disputes between primary liability insurers and excess liability insurers over multiple-vehicle accidents often boil down to a question of simple math: Was there just one accident, which triggers excess coverage, or were there multiple accidents, which usually places the responsibility for coverage with the primary insurer?
Dallas attorney R. Brent Cooper recently took that math question to the U.S. Court of Appeals for the Fifth Circuit on behalf of a primary liability insurer in a dispute over a serious multi-vehicle accident, and they agreed with his argument that it was a single incident—a ruling that saved his client more than $1 million.
Cooper represents Mid-Continent Casualty Co., a primary insurer that was sued by excess liability insurer Evanston Insurance Co. in a coverage dispute over the number of accidents that took place under an insurance policy.
Over a 10-minute period on Nov. 15, 2013, in Houston, a Mack garbage truck owned by Global Waste Services and insured by Mid-Continent and Evanston struck a Dodge Ram, a Ford F-150, a Honda Accord, a toll plaza and a Dodge Charger, according to the decision.
Mid-Continent’s dispute with Evanston focused on the final three collisions.
According to the timeline in the decision, Global employee Marlon Diggs lost control of the truck, first hitting the Dodge Ram on North Beltway 8, and three minutes later striking the Ford F-150.
Two minutes after that, the Mack truck approached a toll plaza and caused a series of accidents that became an issue in the case. They truck struck a Honda Accord that was waiting in line at the toll plaza, severely injuring Laurie Williams, a passenger in the car. The truck then traveled through the toll plaza, causing it damage, before striking the Dodge Charger driven by Gwenetta Powell. Diggs fell out of the truck during the final collision, and both he and Powell died during the accident.
The relatives of Powell sued Global in state court, and the Williams family and Harris County also intervened in the suit to recover for their losses. All of the claims ultimately settled, and the Williams family received $4.5 million—approximately $1 million from Mid-Continent and the remaining $3.5 million from Evanston.
Mid-Continent withdrew from the litigation, claiming exhaustion of its $1 million policy limit. Evanston then settled with the Powell family and Harris County for $2.1 million and $75,000 respectively. Evanston later sued Mid-Continent in federal court, arguing that Mid-Continent incorrectly construed all of the collisions occurring after the Mack truck’s impact with the Accord to be a single accident. Evanston argued that each separate impact between the Mack truck and another vehicle or object constituted a separate accident subject to separate liability limits.
But Mid-Continent argued that under Texas law, there was only one accident because the only event that gave rise to the various injuries was Diggs’ negligence.
The trial court judge ultimately entered a judgement in Evanston’s favor, concluding that Mid-Continent should have paid out a total of about $2.045 million under the various settlements. Because Mid-Continent only paid $1 million in the underlying litigation, the trial court ordered it to pay Evanston about $1.045 million plus the costs of Evanston’s defense.
Mid-Continent appealed that ruling to the Fifth Circuit.
In its Nov. 19 decision, the Fifth Circuit agreed with Mid-Continent’s argument that the event indeed was a single accident.
“The chain of causation remained unbroken on these facts. The ongoing negligence of the runaway Mack truck was the single ‘proximate, uninterrupted, and continuing cause’ of all the collisions,” wrote Judge Edith B. Clement in a decision reversing the district court and rendering judgement for Mid-Continent.
“After all, the parties agree that Diggs did not apply the brakes at any time from first striking the Accord until all the vehicles came to rest,” Clement concluded in the decision. “The language of the contract provides that all injuries—no matter the number of vehicles involved or the number of claims made—arising from continuous or repeated exposure to substantially the same conditions are considered a single accident. The broad language of the policy must be given effect.”
Cooper said his victory before the Fifth Circuit is an important one for insurance coverage disputes between primary and excess carriers over multi-vehicle collisions.
“The issue in the Fifth Circuit is, what is the test we’re going to apply to determine whether or not there is one accident or multiple accidents?” Cooper said. “And the Fifth Circuit found that the trial court applied the incorrect test for what an accident was, and the Fifth Circuit said that one accident is one proximate, uninterrupted cause that results in all of the injuries and damage. That’s the test the Fifth Circuit applied. And the Fifth Circuit said in applying that test, there was only one accident in this case.’’
Cooper noted that the decision settles a common dispute between insurance carriers when multiple people are injured in motor vehicle accidents.
“One of the examples I had is, if a car drives into a crowd of people, is each person who is hit a separate accident?” Cooper said. “And that seemed to resonate with the court, that you could not have a separate accident for each person that was struck.’’
Warren Huang, a partner in the Houston office of Norton Rose Fulbright who represents Evanston, did not return a call for comment.