The U.S. Court of Appeals for the Fifth Circuit has rejected a policy interpretation that, it said, “[o]nly an insurance company could come up with” – namely, that automobile insurance policies did not cover injuries caused by drunk driving collisions because such collisions were not “accidents.”
The Case
Carlos Xavier Sanchez was driving under the influence of alcohol when he failed to yield the right of way, collided with another car, and injured Richard Brett Frederking. At the time, Sanchez was driving a truck assigned to him by his employer, Advantage Plumbing Services, which was insured by Cincinnati Insurance Company.
Mr. Frederking sued Sanchez and Advantage in a Texas state court. The jury found that Sanchez had been grossly negligent and that Advantage had negligently entrusted Sanchez with the vehicle. The jury held Sanchez and Advantage jointly and severally liable for $137,025 in compensatory damages. It further awarded $207,550 in exemplary damages for Sanchez's gross negligence.
As Advantage's insurer, Cincinnati agreed to pay Mr. Frederking the amount of the compensatory damages award, but it refused to pay Sanchez's exemplary damages. In response, Mr. Frederking sued Cincinnati for breach of contract.
The insurer counterclaimed.
The U.S. District Court for the Western District of Texas granted summary judgment to Cincinnati, concluding that Sanchez's intentional decision to drive while intoxicated meant that the collision was not an “accident” under Texas law.
Mr. Frederking appealed to the Fifth Circuit.
The Fifth Circuit's Decision
The circuit court reversed, holding that “as a matter of plain meaning and common usage,” the term “accident” in the Cincinnati policy “plainly” included the drunk driving collision involving Sanchez and Mr. Frederking.
In its decision, the Fifth Circuit found “no reason” to describe the automobile collision in this case as anything other than an “accident.” It pointed out that no one contended that Sanchez had intended his vehicle to collide with Mr. Frederking's vehicle or that Sanchez drank in hopes of causing an automobile collision. Accordingly, the Fifth Circuit concluded, this case fell “well within the common understanding of the term 'accident.'”
The circuit court completely rejected Cincinnati's argument that drunk driving collisions were not “accidents” because the decision to drink (and then later drive) was intentional – even without an intent to collide with another vehicle. The circuit court said that there were “a number of problems” with the insurer's theory.
First, the Fifth Circuit found the insurer's theory “contrary to common parlance” in that “drunk driving accident” was not an oxymoron.
The Fifth Circuit also pointed out that, under Cincinnati's theory, it was not just drunk driving collisions that would be excluded from coverage but that collisions caused by “texting while driving,” “eating while driving,” and “doing makeup while driving” also would not be accidents because, in each of these scenarios, the driver made “an intentional decision” that contributed to an accident.
According to the circuit court, this was “implausible on its face” and would “defeat the widely held expectations of the countless insureds who purchase automobile insurance precisely to protect against these kinds of 'accidents.'”
The Fifth Circuit said that it had “no difficulty concluding that drunk driving collisions” were indeed “accidents,” as a matter of common parlance as well as proper policy interpretation.
The case is Frederking v. Cincinnati Ins. Co., No. 18-50536 (5th Cir. July 2, 2019). Attorneys involved include: For RICHARD BRETT FREDERKING, Plaintiff – Appellant: Langdon Milton Smith, III, Kyle Donald Schnitzer, Jim S. Adler & Associates, Houston, TX. For CINCINNATI INSURANCE COMPANY, Defendant – Appellee: George L. Lankford, Jennifer L. Kelley, Fanning Harper Martinson Brandt & Kutchin, P.C., Dallas, TX.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].