Donegal Mutual Insurance v. Baumhammers ( 2007 )

Chief Justice CAPPY

concurring and dissenting.

I join the majority conclusion on the issue of coverage, agreeing that under the insurance policy (“Policy”) issued by Donegal Mutual Insurance Company (“Donegal”), the claims made against Adrejs and Inese Baumhammers (the “Baum-hammers”) are for damages resulting from bodily injuries caused by an “occurrence.” I dissent, however, as to the majority’s conclusion that there was a single occurrence for which coverage is provided.

First, I write to re-emphasize that at this point in time, we address whether Donegal must provide a defense to the Baumhammers, not whether the Baumhammers are legally liable for the claims made against them and Donegal must pay. The liability, if any, of the Baumhammers for the actions of their adult child implicates several issues, which include whether the Baumhammers owed a duty of care to the plaintiffs. The question of legal duty will involve a weighing of several discrete factors which include: (1) the relationship between the parties; (2) the social utility of the actor’s conduct; (3) the nature of the risk imposed and foreseeability of the harm incurred; (4) the consequences of imposing a duty upon the actor; and (5) the overall public interest in the proposed solution. Althaus ex rel. Althaus v. Cohen, 562 Pa. 547, 756 A.2d 1166, 1169 (2000). But this, along with the other elements of the claims made against the Baumhammers, are questions for another day.

My dissent as to the number of covered occurrences is premised on my view that the majority incorrectly shifts perspective when it counts how many occurrences there were once it concludes that the events at issue did indeed constitute an occurrence for which there is coverage. As to coverage, the majority examines the definition of an “occurrence” in the Policy, focuses on Richard Baumhammers’ violent acts, and determines that an accident, which qualifies as a covered occurrence under the Policy, took place because those acts were unexpected by the insureds. But then, to count the number of occurrences, the majority shifts its focus to the omissions of the Baumhammers that are alleged to be negligent, and states that “[b]ecause coverage is predicated on the Baumhammers’ inaction, and the resulting injuries to the several victims stem from that one cause, we hold that Parents’ alleged single act of negligence constitutes one accident and one occurrence.” (Majority opinion at 163, 938 A.2d at 295.). This is inconsistent.

I would hold that the question of the number of occurrences, like the question of whether there was an occurrence, is to be determined with a focus on Richard Baumhammers’ acts. That is to say, I would count the number events that were unexpected by the Baumhammers. In this regard, I would adopt the analysis set forth in the well-reasoned opinion of the Florida Supreme Court in Koikos v. Travelers Ins. Co., 849 So.2d 263 (Fla.2003). In Koikos, the Court adopted the “cause” test, focusing on the immediate acts that caused bodily injury, and counted the number of occurrences, i.e., accidents, from the standpoint of the insured. Id. at 271. With this approach in mind, in the present case, I would conclude that there were six occurrences for which the Policy provides coverage.¹

For these reasons, I concur with the majority that the Policy provides coverage, but respectfully dissent from the majority’s conclusion that there was only one occurrence. I would conclude that there were six covered occurrences and thus, would affirm the Superior Court’s decision in its entirety.

1 . I also point out that Koikos aptly emphasizes the numerous ways in which insurance companies can limit liability in this area when they draft insurance contracts by using clear language, and highlights the well-settled principle of strictly construing insurance contracts against the drafter, which has long been followed in Pennsylvania. Id. at 272. See Miller v. Boston Ins. Co. 420 Pa. 566, 218 A.2d 275, 277 (1966).

1 . The insurance policy at issue contained the following language:

Limit of Liability. Our total liability ... for all damages resulting from any one “occurrence” will not be more than the limit of liability ... as shown in the Declarations. This limit is the same regardless of the number of “insureds,” claims made or persons injured. All “bodily injury” and “property damage” resulting from any one accident or from continuous or repeated exposure to substantially the same general harmful conditions shall be considered to be the result of one “occurrence.”

Reproduced Record (R.R.) at 97. "Occurrence,” in turn, is defined as an "accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. 'Bodily injury'; or b. 'Property damage.'” R.R. at 81.