A Washington appeals court ruled that an unauthorized act of turning on an irrigation system that led to the rotting of an onion crop constituted an occurrence under a farm liability policy in Nationwide Mut. Ins. Co. v. Hayles, Inc., No. 24965-4-III, 2007 WL 14892 ( Wash. App. Div. 3 Jan. 4, 2007).

 

Clemente and Rosalva Ezquivel subleased a field from Hayles, Inc., on which they grew onions. Under the terms of the sublease, Hayles was to maintain the irrigation system and turn it on when the Ezquivels requested. Hayles turned the water on after the Ezquivel asked a Hayles employee to keep it off, and the onions rotted. The Ezquivels and Hayles settled, and the Ezquivels agreed to execute on the judgment against Nationwide, Hayles' farm liability insurer.

 

Nationwide claimed the damage to the onions was not an occurrence as defined in the policy and denied coverage. And, even if the damage were an occurrence, several exclusions applied.

 

Nationwide said that the act of turning on the irrigation system was intentional and that intentional acts can never be accidents. The court, though, said, “Hayles's unauthorized act of turning on the irrigation, although intentional, was not deliberate. Because the act constituted an occurrence that caused property damage in the coverage territory, it is covered by the farm policy unless it is subject to an exclusion.”

 

The court then reviewed several exclusions that Nationwide said precluded coverage, but found that none applied. Thus, the loss was covered by the farm policy.