Reversing the district court, the Fifth Circuit found one occurrence after the insured's truck struck multiple vehicles. Evanston Ins. Co. v. Mid-Contenint Cas. Co., 2018 U.S. App. LEXIS 32722 (5th Cir. Nov. 19, 2018).
An employee of Global Waste Services, LLC, Marlon Diggs, lost control of his Mack truck. At 11:04 a.m., the Mack truck hit a Dodge Ram. Three minutes later, the Mack truck struck a Ford F150. Two minutes after that, the Mack truck approached a toll plaza and caused the series of collisions which were at issue.
At 11:09 a.m., the Mack Truck struck a Honda Accord that was waiting in line at the toll plaza. The Mack truck pushed the Accord forward for more than 100 feet into the crash barrels separating two toll lanes, where the Accord came to rest. One passenger in the Accord was seriously injured. The Mack truck continued to travel through the automatic toll lane for 66 feet before striking a Dodge Charger. The Mack truck then struck a tollbooth, causing significant damage. The Mack truck continued pushing the Charger until it crashed into a retaining wall, pinning the Charger between the Mack truck and the wall. The driver of the Charger and Diggs both died.
Wrongful death cases were filed in state court against Global. The County made demands for the cleanup and repair of the toll plaza. All claims ultimately settled with contributions from Global's insurers. Mid-Continent insured Global under a commercial auto insurance policy with limits of $1 million per accident. Global had an excess liability policy from Evanston with a $5 million per-accident liability limit. Evanston paid over $5.6 million on various claims. Mid-Continent paid $1 million on one claim.
Evanston filed suit seeking reimbursement from Mid-Continent for a portion of the payments Evanston made on behalf of Global. Evanston also sought to recover the entirety of its defense costs. Evanston argued that Mid-Continent incorrectly construed all 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.
The district court found that two accidents occurred. The collisions between the Mack truck and the Accord and between the Mack truck and the Dodge Charger were separate accidents because they occurred independently, and the former did not lead to the occurrence of the latter. The district court ordered that Mid-Continent, who only paid one million, should have paid $2,045,000 under the various settlements. Therefore, Mid-Continent was ordered to pay Evanston $1,045,000 plus the costs of defense.
On appeal, the issue was whether the Mack truck's collisions near the toll plaza constituted one accident or multiple accidents under the language of Mid-Continent's policy. The policy defined "accident" to include "continuous or repeated exposure to the same conditions resulting in 'bodily injury' or 'property damage.'" Under the "Limit of Insurance" provision, the policy stated that "regardless of the number of covered autos, insureds, premiums paid, claims made or vehicles involved in the accident, the most Mid-Continent would pay for the total of all damages resulting from any one accident was the policy limit of one million dollars.
Under Texas law, the court applied the "cause" approach in interpreting the policy. In interpreting the meaning of an "occurrence, Texas courts focused on the events that caused the injuries and gave rise to the insured's liability, rather than on the number of injurious effects. Other jurisdictions adopted an "effects" approach in which each separate claim arising from the insured' negligence was considered a separate occurrence.
Under the cause test, the appropriate inquiry was whether there was one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damage. If so, then there was a single occurrence. If the chain of the proximate causation was broken by a pause in the negligent conduct or by some intervening cause, then there were multiple occurrences, even if the insured's negligent conduct which caused each of the injuries was the same kind of negligent conduct.
Here, the chain of causation remained unbroken. the ongoing negligence of the runaway Mack truck was the single "proximate, uninterrupted, and continuing cause" of all the collisions. The language of the policy provided 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 were considered a single accident. The broad language of the policy had to be given effect. There was one accident under the policy.
Therefore, the district court was reversed and judgment was rendered in favor of Mid-Continent.