I have long been a student of the “what’s an accident?” question for purposes of a liability policy. As I am fond of mentioning, the question has been before courts for a very, very, let’s add one more very, long time. There are cases asking it 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” is 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.

“What’s an accident?” cases are usually fact intensive – which gets back to why there are anything but clear cut answers. For this reason, as much as I am fascinated by the issue, they tend not to find a place in Coverage Opinions. They are just too unique and stand-alone. But there is something about Depositors Insurance Company v. Luera-Harris, No. 318269 (Mich. App. Ct. Jan. 13, 2015) that makes it worthwhile.

It is often the case that, when a court finds that bodily injury or property damages was not caused by an accident (occurrence) – especially bodily injury – it is easy to see why. The injury was either intended, or it was substantially certain (or some similar test), based on the insured’s conduct at issue, that it would occur. In Luera-Harris, the court held that bodily injury was not caused by an accident, because it was reasonably foreseeable that it would occur. While lots of cases reach this conclusion, the court’s discussion of the issue may make it even more difficult for policyholders to establish an “accident” because the injury, while not intended, was reasonably foreseeable to occur.

Depositors Insurance Company v. Luera-Harris involved coverage under the following tragic circumstances: “On the night of January 29 to January 30, 2011, [Jordan] Henika and his roommates hosted a party at their East Lansing apartment. Harris, Cochran, and Bossenbery attended the party. Henika and his roommates provided alcohol to the partygoers, including minor Brett Johnson. Harris, Cochran, and Bossenbery left with Johnson. Johnson, who was legally intoxicated, drove the vehicle. Johnson later lost control and the vehicle crashed broadside into a tree. Harris, Cochran, and Bossenbery died in the accident. The Estates later sued Johnson, Henika, and Henika’s roommates for wrongful death.”

At issue was the potential availability of coverage under Henika’s father’s homeowner’s policy. [Put aside the motor vehicle exclusion, which was raised but not at issue before the appeals court.] The trial court in the coverage action held that “Henika should have reasonably foreseen that harm would occur when he provided alcohol to minors and, therefore, there was no ‘accident’ and no ‘occurrence’ as defined in the policy.”

The appeals court took its turn at the issue. It set forth a definition of accident, focusing on, under what circumstances, an intentional act can be an accident. The court stated: “If the harm was either ‘intended by the insured or reasonably should have been expected because of the direct risk of harm intentionally created by the insured’s actions,’ the intentional act cannot be classified an accident. The intentional act at issue in the present case is Henika’s provision of alcohol to minors and the resulting harm is the car crash.”

The court placed much weight on Allstate Ins. Co. v. Morton, 657 N.W.2d 181 (Mich. Ct. App. 2002), which held that “the provision of alcohol to the minors did not constitute an accident within the meaning of the insurance policy because the insured reasonably should have expected that giving minors enough alcohol to allow them to pass out would result in harm. It did not matter, the Court stated, that the specific harm that occurred was another minor’s intentional rape instead of alcohol poisoning.”

Following Morton, the Luera-Harris court held: “The rationale stated in Morton controls the outcome in the present case. In both cases the actual harm was not caused by the provision of the alcohol, but through acts by a minor who consumed the alcohol. And as in Morton, it does not matter if the actual harm was inflicted by a third party (Johnson) so long as the insured (Henika) should have reasonably expected that harm would occur. Similarly, it does not matter that the harm that did occur exceeded the harm that the insured actually expected.”

The court observed that “Depositors Insurance only had to show that Henika provided enough alcohol to the minors for him to reasonably foresee that it might impair their ability to drive. Even if Henika did not provide the minors with enough alcohol to pass out, he provided them with enough alcohol to create a situation where it was foreseeable that a minor who had consumed alcohol would operate a vehicle in a negligent manner. Because Henika’s actions created a direct risk of harm that was reasonably foreseeable, the result at issue here—a vehicular crash—cannot be said to be accidental; accordingly, there was no occurrence within the meaning of the insurance policy.”

Perhaps the outcome here is not surprising based on the low threshold -- reasonably foreseeable or reasonably should have expected that serving a minor an excess amount of alcohol, and then letting him get behind the wheel, would lead to three people being killed. And perhaps the outcome here would have been different, or not, under these facts, if the test had been -- as it is in other states -- that the outcome must have been “substantially certain.”

Serving alcohol to minors, whether a lot or any for that matter, is wholly unacceptable. But even if the decision on coverage here is correct, the court’s observation that “it does not matter that the harm that did occur exceeded the harm that the insured actually expected” seems to set the stage for insurers to argue that many injuries, with the benefit of hindsight of course, were not caused by an accident because they reasonably should have been expected.