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Vol. 3, Iss. 9
June 4, 2014

The Mousetrap: The 180 Year Old Coverage Dispute

“Everyone knows what an accident is until the word comes up in court. Then it becomes a mysterious phenomenon, and, in order to resolve the enigma, witnesses are summoned, experts testify, lawyers argue, treatises are consulted and even when a conclave of twelve world-knowledgeable individuals agree as to whether a certain set of facts made out an accident, the question may not yet be settled and it must be reheard in an appellate court.” These sage words were penned by Justice Musmanno in the Pennsylvania Supreme Court’s decision in Brenneman v. St. Paul F. & M. Ins. Co.

That’s a very accurate description of many, many general liability insurance coverage cases today. Defining an “accident” is front and center in the deluge of coverage cases addressing whether faulty workmanship qualifies as an “occurrence.” And, more generally, this question is at the heart of cases being decided every other day, involving every imaginable, and unimaginable, scenario in which injury or damage has occurred and for which liability coverage is subsequently sought.

A review of these cases, and the lack of common ground that exists between the parties, reveals that Justice Musmanno’s observation in Brenneman was spot on – Yes, of course, everyone knows what an accident is -- until the word comes up in court.

Brenneman was decided in 1963. That sounds like a long time ago. But when it comes to defining an “accident,” a case from 1963 is just a youngster. There are cases asking this question that date back to the early 1800s. And these ancient cases frequently seek guidance from even more ancient cases, often times English ones with strange citations that very few lawyers practicing in this country understand. Suffice to say, the question whether something was caused by an “accident” has been keeping judges, including ones in wigs, busy for a very long time.

I have come to the conclusion that the question whether something was caused by an “accident” gets the nod as the oldest continuously running insurance coverage issue. It is the Mousetrap of insurance coverage. If there is an older one please tell me. The earliest American case that I could find, addressing whether an “accident,” for purposes of insurance coverage took place, is from 1835 (Howell v. Cincinnati Ins. Co., Ohio Supreme Court).

But it’s not just that there are a lot of really old cases addressing the “accident” question. The other very interesting fact is that some of these cases look remarkably similar to ones that were decided yesterday. In other words, not only have courts been grappling for 180 years with the coverage question whether injury or damage was caused by an “accident,” but they haven’t figured out the answer after all this time.

Consider the following case where a court addressed whether an injury was caused by an “accident,” but couldn’t call anyone to talk about it because the telephone had not yet been invented (1879).

In Schneider v. The Provident Life Insurance Company, 24 Wis. 28 (1869) the Supreme Court of Wisconsin addressed the availability of coverage under an accident policy. Bruno Schneider was insured against injury or death by accident. “He attempted to get on a train of cars while in slow motion, and fell under them and was killed. The policy contained a clause that the company should not be liable for any injury happening to the assured by reason of his ‘willfully and wantonly exposing himself to any unnecessary danger or peril.’ And, on the trial, the plaintiff was nonsuited, upon the ground that the death was within this exception.”

The Wisconsin Supreme Court reversed, holding that Schneider did not willfully and wantonly expose himself to any unnecessary danger or peril. The court held that his death was caused by an accident, defining the term as something that may result from an unknown cause. “But,” the court noted, “it is not essential that the cause should be unknown. It may be an unusual result of a known cause, and, therefore, unexpected to the party.” The court applied such definition to the situation before it: “[T]here are, undoubtedly, thousands of persons who get on and off from cars in motion without accident, where one (sic) is injured. And, therefore, when an injury occurs, it is an unusual result, and unexpected, and strictly an accident.” This analysis by the Wisconsin Supreme Court, of what qualifies as an “accident,” is still at the heart of the debate in numerous coverage cases today.

 

 

 
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