The California Court of Appeal recently held in, State Farm General Insurance Co. v. Frake, that the term "accident" applies to the unintended acts of the insured, but not to the unintended consequences of the insured's intentional acts.
Underlying the Frake decision is the drunken horseplay of several friends on a weekend trip to Chicago. In September 2004, Frake (the insured) went to visit his friend King in Chicago. Frake and King "engaged in a form of consensual horseplay that involved hitting each other in the groin." After attending a Chicago Cubs baseball game, where Frake became very intoxicated, Frake and King continued their game of horseplay. While leaving the game, King tried to hit Frake in the groin, but Frake blocked King's attempt. A short while later, Frake retaliated by "throwing his arm out to the side, where King was standing, and [striking] King in the groin." Frake and King spent the remainder of the weekend together, and King never mentioned that he was in any pain or discomfort as a result of Frake's strike to King's groin. Frake left Chicago after the weekend.
A short while after leaving Chicago, Frake learned that King had sustained "significant injuries" as a result of Frake's strike to King's groin. King later contacted Frake and requested that Frake pay King's medical bills. Ultimately King filed suit against Frake in 2006 alleging causes of action for negligence, assault and battery, and intentional infliction of emotional distress.
Frake tendered the defense of King's lawsuit to State Farm under a "renters policy" which provided liability coverage for "damages because of bodily injury caused by an occurrence." An occurrence was defined as an "accident . . . which results in bodily injury . . . during the policy period." Despite initially declining to defend Frake, State Farm eventually agreed to provide a defense under a reservation of rights. A jury awarded King $450,000. In exchange for not executing the judgment, Frake assigned all claims he had against State Farm to King.
State Farm then brought a declaratory relief action against Frake and King to determine its duty to defend and indemnify Frake in King's lawsuit. State Farm moved for summary judgment on the grounds that because Frake had admitted that he intentionally struck King, Frake's conduct was not an "accident," and therefore State Farm did not have a duty to defend or indemnify. Frake maintained that although he intended to hit King, he did not intend to injure King and he did not intend hit King directly in the groin. The trial court denied State Farm's motion, finding that there were triable issues of fact as to whether there was a potential for coverage based on the unintended consequences of Frake's intentional conduct. State Farm appealed.
In ruling on State Farm's appeal, the Court of Appeal focused on the word "accident" as used in State Farm's policy. The Court cited California cases for the proposition that "an accident does not occur when the insured performs a deliberate act unless some additional, unexpected, independent, and unforeseen happening occurs that produces the damage." Applying this principle, the Court held that State Farm did not have a duty to defend. Frake admitted that he intended to strike King, and there was no dispute that King's injuries occurred as a direct result of the strike from Frake. Furthermore, there were no intervening or unforeseen events in the causal chain which might support a finding that this was an accident. The Court held that Frake's assertions that he did not intend to injure King did not transform Frake's intentional conduct into an accident, because the focus of the analysis is on the acts of the insured and not the resulting injury.
The Frake Court went on to address two recent California opinions that King contended required State Farm to provide coverage to Frake. First the Court discussed Delgado v. Interinsurance Exchange Automobile Club of Southern California, 47 Cal. 4th 302 (2009), a California Supreme Court opinion. King argued that language in Delgado required that the term "accident" in State Farm's policy apply not only to unintended acts, but also to the unintended consequences of intentional acts. In addressing Delgado, the Court noted that although a single passage in Delgado could support King's argument that "accident" included "the unintended consequences of the insured's intentional acts," the Delgado decision as a whole did not support this proposition. The Court construed the remainder of the Delgado opinion, as reaffirming longstanding California case law that "the term accident in the policy's coverage clause refers to the injury-producing acts of the insured." Moreover, the Court noted that the Delgado opinion discussed with approval two California opinions which "ruled that the term 'accident' does not apply where an intentional act resulted in unintended harm."
The Court then went on to address State Farm Fire & Casualty Co. v. Superior Court, 164 Cal. App. 4th 317 (2008) (Wright), a California Court of Appeal decision which King claimed supported his position that "the term 'accident' encompasses deliberate conduct that results in unintended harm." In Wright, the insured intentionally threw another man into a pool causing injury when the man landed on the steps in the shallow end of the pool. The insured claimed that although he intended to throw the other man into the pool, he didn't intend to cause the man harm because he intended to throw the man into the deep end of the pool and not onto the steps in the shallow end. The Wright Court found that the insurer had a duty to defend because "an accident can exist when either the cause is unintended or the effect is unanticipated." The Wright Court also found that the insured's act responsible for the man's injuries was not the insured's intentional throw of the man, but the insured's unintentional use of insufficient force to throw the man sufficiently into the pool to avoid the steps.
The Frake Court distinguished Wright on a number of bases. First, the Court distinguished the facts of Wright, noting that in Wright the Court found that landing in the shallow end of the pool (due to the insufficient use of force) was an intervening act of fortuity breaking the casual chain. In contrast, the Frake Court noted that here, "there was no intervening or unintended act between Frake's conduct and King's injury." Second, the Frake Court noted that Wright was decided before Delgado, and Delgado had reaffirmed that the term "accident" refers to the injury-causing acts of the insured, and not the injury that results from the insured's acts. Lastly, the Court noted that Wright was at odds with a long line of California case law, and that the Wright opinion has been called into question since it was published.
Frake is an interesting opinion. On the one hand, Frake may help to clarify the murky picture of what constitutes an "accident" under a liability policy in California. See Quigley v. Travelers Prop. Cas. Ins. Co., 630 F. Supp. 2d 1204, 1214 (E.D.Cal. 2009) ("Under California law, the meaning of the term 'accident' is not settled."). On the other hand, in this author's view, Frake extends Delgado beyond its holding in an attempt to limit the impact of the Wright opinion and create a bright line rule – that an intentional act can never be considered an accident. The problem with the Frake Court's bright line rule is that it invites courts and litigants to get creative in identifying intervening acts in order to find coverage under the Frake Court's paradigm (the Wright Court's holding that the insured's misjudgment as to how much force was required to throw the man safely into the pool was an intervening act is an example). Perhaps the California Supreme Court will step into the fray and truly clarify the meaning of "accident," but until then litigants are left to argue whether Frake or Wright controls.
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