Cause Theory of Liability to be Used to Determine Number of Accidents
In State Auto Property And Cas. Co. v. Matty, 2010 WL 678946 (Ga.), the Supreme Court of Georgia reviewed the certified question of how to determine the meaning of the term “accident” in an auto liability insurance policy when the word is not expressly defined in the policy and, more specifically, how to determine if there has been one accident or two when an insured vehicle strikes one claimant and then very shortly thereafter strikes another.
In this case, a vehicle driven by State Auto's insured (Rachel Griffin) struck and killed a bicyclist (Matthew Matty). Griffin's car then struck a second bicyclist (Jeffrey Davis), seriously injuring him. An accident reconstruction expert testified that, assuming the insured had traveled at a constant speed of 55 miles per hour from the point she struck the first bicyclist to the point where she struck the second one, it would have taken her “just over a second” to travel the 95 to 115 feet between the two bicyclists.
The insured's policy with State Auto contained a limit of liability for bodily injury of $100,000 for “each accident.” The policy also provided, in part, that this limit of liability was the “maximum limit of liability for all damages resulting from any one auto accident. This is the most [State Auto] will pay regardless of the number of: 1. 'Insureds'; 2. Claims made; 3. Vehicles or premiums shown in the Declarations; or 4. Vehicles involved in the auto accident.” The policy did not define “accident,” “each accident,” or “any one accident.”
State Auto contended that the incident in which Griffin struck the claimants constituted one accident and that it was therefore responsible for providing only a single $100,000 limit of coverage. The claimants, on the other hand, contended that there were two accidents and that State Auto was responsible for providing two $100,000 limits of coverage.
The court held that the term “accident” in a liability policy did not have to be construed to mean that two different impacts constituted two different accidents. Secondly, the court agreed with the district court's conclusion that there was no case law on point and so it was thus necessary to determine which of three general analytical approaches adopted by other jurisdictions for construing the term “accident” Georgia would adopt—the “cause” theory, the “effect” theory, or the “event” theory.
The court determined that the cause theory applied to the policy for the purpose of determining how many accidents occurred. Under the cause theory, the number of accidents for purposes of determining the amount of coverage was determined by the number of causes of the injuries, with the court asking if there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damage. The court explained that the cause theory corroborated the intent of the parties to the insurance contract in this case, and the theory was also more consistent with Georgia tort law than were the effect and event theories. The court thus adopted the cause theory for use in liability insurance cases in Georgia. The court further held that the cause theory applied to the insurance contract at issue in this case, as the theory was consistent with that contract read as a whole and in the absence of a specific, contrary definition of “accident.”
Having clarified the legal issue about which the district court found Georgia law uncertain, the court stated it would not undertake to determine whether, applying the cause theory to the facts as developed in the district court, “there was but one proximate, uninterrupted, and continuing cause which resulted in all of the injuries and damage.” Rather, the court left it up to the district court to answer that question and to resolve the case.
Editor's Note: As explained by the court, defining “accident” by the number of impacts—regardless of how close in time and place they occurred—would mean that there could never be one accident and a $100,000 limit of liability in a multiple vehicle collision because it was virtually impossible for multiple vehicles to collide truly simultaneously.
Under the claimant's view in this case, the policy's $100,000 limitation of liability “regardless of the number of . . . [v]ehicles involved” would be meaningless in almost any collision involving multiple vehicles. Clearly it was not the intent of the contract for the insurer to have to pay $100,000 for each impact.