If a drunken motorist collides with another vehicle, can the incident truly be called an accident?
A federal judge in Texas said “no” and dismissed a plaintiff’s lawsuit seeking punitive damages from Cincinnati Insurance Co. The U.S. 5th Circuit Court of Appeals now has reversed that decision.
It was clear from the first sentence of the 5th Circuit’s opinion that the insurer’s argument didn’t go over well with the appellate court. “Only an insurance company could come up with the policy interpretation advanced here,” says the opinion written by Circuit Judge James C. Ho.
The case stems from a September 2014 crash involving Carlos Xavier Sanchez and Richard Brett Frederking. Sanchez turned in front of Frederking’s vehicle at an intersection in the San Antonio area while driving a vehicle owned by his employer, Advantage Plumbing. Frederking was seriously injured. Cincinnati provided business auto coverage for the company.
Sanchez admitted he was at fault for the accident and pleaded guilty to drunken driving.
Frederking filed suit in the Bexar County district court against Sanchez and Advantage, alleging that the employer had negligently entrusted Sanchez with use of its vehicle, among other pleadings.
A jury awarded $137,025 in compensatory damages and interest jointly from Advantage and Sanchez and separately found Sanchez liable for $207,550 in punitive damages with interest.
Cincinnati paid the compensatory damages, but balked at the punitive damages portion of the judgment. Frederking sued to collect, and also sought a declaration that Sanchez was covered under Advantage’s policy. The insurer, based in Ohio, removed the case to federal court.
U.S. District Judge Xavier Rodriguez agreed with the carrier’s argument that the policy covered only damages caused by “accidents,” and there had been no accident because Sanchez’s decision to get drunk and drive was tantamount to an intention to cause a crash.
Rodriguez cited Texas Supreme Court decisions in Trinity Universal Ins. Co. v. Cowan and Wessinger v. Fire Ins. Exchange. The Wessinger case involved a plaintiff whose insurer had denied coverage for an injury to a man whom a policyholder had violently attacked while intoxicated, causing permanent vision loss. The Supreme Court ruled that the insurer wasn’t liable because the attack was an intentional act, not a covered accident.
“Similar to the findings in Cowan and Wessinger, Sanchez’s collision with Plaintiff and Plaintiff’s resulting injuries were the natural and expected result from a driver operating a vehicle while intoxicated,” Rodriguez wrote in an order granting summary judgment in favor of Cincinnati Financial.
The 5th Circuit Court, however, found no reason to define the term “accident” any differently than the common parlance. The appellate court noted that the term was not defined in the policy, which means the court has to use the “generally accepted or commonly understood meaning.”
“There is no reason to describe the automobile collision in this case as anything other than an ‘accident,'” the appellate panel said. “Certainly no one contends that Sanchez intended his vehicle to collide with Frederking’s vehicle. Nor does anyone suggest that Sanchez drank in hopes of causing an automobile collision.”
The appellate court said the Texas Supreme Court had previously rejected the notion that “mere foreseeability is the boundary between accidental and intentional conduct. The court reversed the district judge’s decision and remanded the case for for further consideration.
The ruling does not put an end to Frederking’s suit. A footnote explains that two arguments remain to be decided by the trial court: The carrier asserts that Sanchez was not an “insured” under the policy and that public policy precludes coverage of Sanchez’s exemplary damages.
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