From Birdseed to Crop Dusting, Liability-Triggering Event Determines Number of Occurrences

Texas applies the “cause” test to determine the number of accidents or occurrences, but its emphasis on the “liability-triggering event” requires an analysis of intervening causes. The Fifth Circuit Court of Appeals doubled-down on its focus on the liability-triggering event, reversing the trial court and finding a truck driver’s negligent operation of his vehicle that caused multiple collisions (four autos and a toll plaza booth) was one accident for purposes of liability insurance in Evanston Ins. Co. v. Mid-Continent Cas. Co., —F.3d.—, No. 17-20812, 2018 WL 6037507. The court acknowledged that the analysis espoused in Pincoffs[1] and Goose Creek[2] (i.e., count the number of acts by the insured that give rise to liability) is incomplete because it does not address what level of generality (or specificity) defines the insured’s actions. The district court found the insured did not become liable to anyone until his truck collided with that person’s vehicle (or toll booth) and therefore, conceptualized each collision as a separate event giving rise to liability.

The Fifth Circuit disagreed, finding the appropriate inquiry is whether there is one proximate, uninterrupted, and continuing cause that resulted in all of the injuries and damage. The court relied on the analysis by the San Antonio appellate court in Foust v. Ranger Ins. Co.[3] In Foust the insured’s crop dusting process took almost three hours and required the insured to land the plane several times to refuel, during which time, the temperature, wind and altitude varied during several passes over different sections of property. Even so, the damage to the neighboring properties was caused by the crop dusting—one “occurrence.” In contrast, an employee’s sexual abuse of two different children a week apart constituted two “occurrences” because the immediate cause of the damage was an intervening intentional tort, which broke the chain of causation.[4]

Applying the Foust analysis to the facts before it, the Fifth Circuit noted that the truck driver did not regain control of his truck and there was no indication that the driver’s negligence was interrupted between collisions. Finding that the ongoing negligence of the runaway truck was the single “proximate, uninterrupted, and continuing cause” of each of the collisions, the court determined that all of the collisions resulted from the same continuous condition—the unbroken negligence of the truck driver.

The lesson here is that in order to determine the number of “occurrences” in analyzing a general liability policy under Texas law, the focus is on the general cause of the insured’s liability, and only if a secondary intervening cause interrupts the continuing cause of the insured’s liability will there be more than one occurrence.

[1] Maurice Pincoffs Co. v. St. Paul Fire & Marine Ins. Co., 447 F.2d 204 (5th Cir. 1971).

[2] Goose Creek Consol. ISD v. Cont’l Cas. Co., 658 S.W.2d 338 (Tex. App. 1983).

[3] 975 S.W.2d 329, 333 (Tex. App.—San Antonio 1998, pet. denied).

[4] See, H.E. Butt Grocery Co. v. Nat’l Union Fire Ins. Co. of Pittsburgh, 150, F.3d 526, 534 (5th Cir. 1998).

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Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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