Zurich Amer. Ins. Co. v. Goodwin, et al.
| Docket Number: | 2003-CA-02439-SCT | |
| Supreme Court: | Opinion Link Opinion Date: 01-26-2006 Opinion Author: Cobb, P.J. Holding: Reversed and Remanded |
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| Additional Case Information: |
Topic: Insurance - Choice of law - Restatement (Second) of Conflict of Laws sections 188 & 193 - Accident Judge(s) Concurring: Smith, C.J., Waller, P.J., Carlson and Dickinson, JJ. Non Participating Judge(s): Diaz and Randolph, JJ. Dissenting Author : Easley and Graves, JJ. Procedural History: Summary Judgment Nature of the Case: CIVIL - INSURANCE |
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| Trial Court: |
Date of Trial Judgment: 10-28-2003 Appealed from: Covington County Circuit Court Judge: Robert G. Evans Disposition: Granted summary judgment in favor of Appellees Case Number: 2002-142C |
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| Party Name: | Attorney Name: | |||
| Appellant: | Zurich American Insurance Company |
EDWARD J. CURRIE, JR.,
BRITTANY ELIZABETH REID |
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| Appellee: | Barbara G. Goodwin, Individually; Raphael Goodwin, Jr., Individually; Emma Delores Goodwin, a Minor, by and through Her Mother and Next Friend, Valerie Hughes; the Estate of Raphael Goodwin, Sr., Barbara G. Goodwin, Administratrix; Robin C. Thrasher; Laura Nauditt; Lizabeth Nutter; Kelly Thrasher, Individually and on Behalf of All Wrongful Death Beneficiaries of Guy Stephen Thrasher; and Roy C. Grafe and Helen Kay Grafe | HENRY PALMER, WILLIAM B. PARKER, O. STEPHEN MONTAGNET, III, GROVER CLARK MONROE, II |
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| Topic: | Insurance - Choice of law - Restatement (Second) of Conflict of Laws sections 188 & 193 - Accident |
| Summary of the Facts: | Zurich American Insurance Company, one of many defendants, provides liability insurance to another defendant, West Side Transport, Inc. An eighteen-wheel truck, operated by Joseph McCrary, a West Side employee, encountered the backup of traffic, was unable to stop, and collided with eight other vehicles, causing two fatalities, numerous injuries and property damage. The driver of the truck was insured under West Side’s Truckers Policy, issued by Zurich, which provided a liability limit of $1 million for any one accident. Three separate actions were filed in Mississippi state courts, and a federal interpleader action was also filed. The first complaint was by the wrongful death beneficiaries of Raphael Goodwin in the Lauderdale County Circuit Court. Defendants included Joseph McCrary, the driver of the truck, and West Side, owner of the truck. Next, plaintiffs Kay and Roy Grafe filed a personal injury complaint in the Covington County Circuit Court. A month later, the wrongful death beneficiaries of Stephen Thrasher filed suit in the Covington County Circuit Court, also naming as defendants all known plaintiffs and defendants, and seeking a declaratory judgment regarding the Zurich insurance policy. West Side is an Iowa corporation with its principal place of business in Iowa. West Side’s insurance policy was negotiated and issued in Iowa by Cottingham and Butler, Inc., which has its principal place of business in Iowa. Zurich is a New York corporation with its principal place of business in Illinois. The main state of operation for West Side’s drivers is Iowa, although West Side admits its drivers travel to and from various states to facilitate the corporation’s business. The truck was licensed in Iowa. The Zurich policy includes policy extensions for a covered vehicle, when it is away from the state where it is licensed, that will increase the limit of insurance for liability coverage to meet the limit specified by a compulsory or financial responsibility law of the jurisdiction where the covered vehicle is being used. The insurance contract contained no choice of law provision. Thrasher filed a summary judgment motion against Zurich in which Goodwin and Grafe joined, requesting the court find Mississippi law controlled the issue of Zurich’s limit of liability, and that the $1 million liability limit applied separately to each plaintiff. Zurich filed a response and cross-motion for summary judgment arguing that Iowa law should apply. The circuit court held that Mississippi law controlled, but reserved ruling on the issue of the number of accidents involved. The court entered an order directing entry of final judgment pursuant to M.R.C.P. 54(b). Zurich appeals. |
| Summary of Opinion Analysis: | Issue 1: Choice of law Choice of law analysis arises only when there is a true conflict between the laws of two states, each having an interest in the litigation. In this case there is a true conflict between the law of Iowa and Mississippi. Choice of law analysis involves a multi-step process. First it must be determined whether the conflicting laws are substantive or procedural. Regardless of the substantive law to be applied, Mississippi courts will apply their own procedural law. The present case deals with contract construction which is substantive. In determining which State’s law to apply, Mississippi relies on the “center of gravity” doctrine of the Restatement (Second) of Conflict of Laws. The second step in choice of law analysis is to classify the substantive area of law. Because the present case is capable of sounding both in tort and contract, a classification of one or the other could result in a different conclusion. The third step, which is the heart of the analysis, begins by turning to the contract specific provisions of the Restatement. Two controlling sections of the Restatement have been adopted in Mississippi – section 188 governing contracts in general and section 193 governing casualty insurance contracts. For several reasons, section 193 cannot be applied. The lynchpin of section 193 is that the parties must be able to identify a principal location of the risk. That cannot be done in the present case. Because section 193 does not apply, the determination must be made under section 188. The court balances the principles of section 188 to find a practical application. The place a contract was issued is irrelevant in choice of law cases. It is undisputed that West Side’s primary place of operation is Iowa. While it has been admitted that West Side operates outside of Iowa, there is no indication that these activities take place with any frequency in Mississippi, and even if they do, the frequency is much less than in Iowa. Lastly, the domicile of the parties to the contract are in Iowa, Illinois and New York, not in Mississippi. These factors point toward application of Iowa law. Therefore, under section 188 Iowa law should apply. Issue 2: Accident There is no uniform approach under Iowa law in choosing from whose perspective to view a policy. The Iowa Supreme Court has declared it is futile to create an all-inclusive definition of “accident”; rather it should be defined in the context of the policy in which it is used. The most relevant approaches are the perspective of the insured or the injured party. If viewed from the perspective of the insured, the event will be looked at as to its “cause” by the tortfeasor. Then all the collisions will be considered part of the same “accident” because they were the result of one continuing “cause”. If viewed from the perspective of the injured party, the court will look to the “effect”on the injured party. Then the collisions will be considered part of different “accidents” because as to each injured party, it was not a continuing event but new and independent. Under Iowa law, the court will customarily view the provisions of a liability policy from the perspective of the insured party. Under this view, the events in this case were the result of one continuing exposure. The actions of driver McCrary set in motion a chain reaction, which resulted in injuries from exposure to substantially the same condition. Under the definition in the Truckers Policy, this means that the separate collisions were part of one “accident.” |
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