11.2 Concurrent Causation: A Historical Perspective


Historically, the Arizona courts have upheld automobile liability exclusions in homeowner and commercial general liability policies. The exclusion sets the boundary between auto related and non-auto related coverages, and prevents duplication of such coverages by eliminating the potential for stacking. The automobile and homeowner CGL policies have a mutually exclusive application whereby the coverages afforded under each dovetails with the other, with one filling the gaps created by the other. The personal or business auto policy covers liability claims arising from the use, maintenance or ownership of insured autos, while the homeowner CGL policy provides coverage for non-auto related liability claims. The auto exclusion in the homeowner CGL policy acts as a mirror image of the insuring clause of the personal or business auto policy.

As a result of the auto's importance in our society, the courts have been confronted with numerous factual scenarios in which the dividing line between auto related and non-auto related claims becomes obscured, giving rise to coverage litigation as competing insurance companies try to define the loss in such a fashion that their policy escapes exposure. In this arena, the Arizona courts have applied auto exclusions where there is a causal connection between the use of an insured auto and the injury.[23] In those cases where the use of the insured vehicle was only incidental to the event that produced liability, the auto exclusion was not applied by the court.[24]

In Scottsdale Insurance Co. v. Van Nguyen,[25] Division Two of the Arizona Court of Appeals formally adopted the so-called "concurrent causation principle" as a mechanism to escape the reach of an auto exclusion in a CGL policy. Unfortunately, the court in Van Nguyen did not incorporate into its analysis a discussion of prior Arizona judicial precedent directly impacting upon the concurrent causation analysis. Without adequate guidance, the concurrent causation principle now lies on the desks of inventive lawyers like a loaded weapon, waiting to be picked up and used to shoot down auto (and other policy) exclusions. The stakes are often high where catastrophic injury claims are involved, and where the auto exclusion in the homeowner CGL policy may be the only effective impediment to stacking of auto and non-auto coverages.

The Van Nguyen decision has resulted in a plethora of coverage litigation in which lawyers try to find additional insurance coverage through artful pleading. A broad reading of the Van Nguyen decision threatens to render nugatory auto exclusions contained in non-auto policies, and convert those policies into auto policies. This concern was expressed by the California court in State Farm Fire & Casualty Co. v. Camara,[26] where the court indicated that if the concurrent causation analysis was read too broadly, it would allow for liability to arise under homeowner's policies where, for example, the insured negligently repaired the vehicle, or carelessly left worn tires on the vehicle (which later resulted in a blowout), or failed to apply the vehicle hand brake when parked on a hill (as a result of which, it rolled uncontrolled down the hill), or failed to replace worn out spark plugs (as a result of which, the vehicle stalled at a railroad crossing).

It is easy to conceive of additional scenarios that might invoke coverage under a broad application of concurrent causation principles. For example, if someone drank alcohol and then drove a vehicle, causing injury, it might be argued that the act of drinking alcohol was a separate negligent act and, therefore, the auto exclusion would not apply. What if the insured doesn't get his eyes checked every year in the manner that is recommended by the American Ophthalmological Society? If the insured has an accident and is sued under an allegation that he failed to properly keep a lookout while he drove, would there be coverage under his homeowner's policy or any other non-auto related policy?

The Arizona courts have refused to impose on insurance carriers the onerous burden of excluding from their policies every conceivable theory of liability that can be associated with an exclusion.[27]

Arizona's courts have also encouraged the insurance industry's transition toward using simplified insurance policy language. Simplified policy language assists policyholders in reaching a meaningful understanding of their coverage. A broad reading of Van Nguyen, if adopted, may hinder that goal by preventing carriers from using simplified "plain English" language, such as "use" in their insurance policies. If a broad reading of the decision is applied, insurance carriers would be required to specifically enumerate a host of additional exclusions to the automobile exclusion, even though the terms used may not necessarily connote the items being excluded. In short, Arizona's experiment with "plain English" policies may be ended as the insurance industry attempts to respond to a broad reading of the court's ruling.

The hallmark of the concurrent causation analysis is the "theory of pleadings" approach to coverage debates. The so-called "theory of pleadings" rule has been criticized by the courts of other jurisdictions[28] and by Division One of the Arizona Court of Appeals in Lumbermen's Mutual Casualty Co. v. Kosies[29] and Brewer v. Homes Insurance Co.[30] The court in Van Nguyen did not discuss these decisions of its sister court when it blanketly utilized a concurrent causation analysis.

Prior Judicial Precedent

Before embarking on an analysis of the Van Nguyen decision it is prudent to survey prior Arizona decisions that shed light on the automobile exclusion in the context of concurrent causation. These decisions were not incorporated into the Van Nguyen court's analysis.

In Morari v. Atlantic Mutual Fire Insurance Co.,[31] a passenger in the insured vehicle was shot when the insured reached behind the seat of his pick-up truck to get his rifle. The gun discharged, injuring the passenger. The issue before the supreme court was whether the facts surrounding the accidental shooting fell within the scope of the automobile exclusion in the insured's homeowner's policy. The injured passenger argued that the automobile exclusion was not applicable because the insured was negligent in keeping a loaded gun, not on safety, in his truck, and that this negligence "was complete and did not involve the pick-up truck nor its unloading." In rejecting this argument, the court stated:

We think appellant is shifting the meaning of the word "cause." The unloading does not have to be the cause in the sense of the proximate cause connected with the unloading. . . . Hallabrin's act in keeping the gun loaded and not on safety created a dangerous condition from which reasonable men might conclude greater care in its subsequent handling was required in order to prevent its accidental discharge. No doubt the rifle could have been removed from the truck with such care that Morari would not have been injured. The careless use in connection with the unloading was the negligent act from which the injury stemmed.[32]

The court held:

[Th]e carriage of the rifle simply created a dangerous condition which imposed a duty to exercise reasonable care commensurate with all the known circumstances to avoid its accidental discharge. It was the manner of removal from the truck which was the negligent act or omission without which the injury could not have occurred, . . . and this negligent act was connected with the unloading.[33]

The court's analysis in Morari...

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