Cole v. State Farm Mutual Insurance

HARRELL, Judge. William Dawson Cave shot and killed Sharyn Cole on 17 September 1994 while she was seated in her parked van in the driveway of his Brandywine, Maryland, home. As a result, John Eddy Jackson Cole (Petitioner), husband of Ms. Cole, submitted, as personal representative of her estate, a claim for accidental death benefits under Ms. Cole’s automobile liability policy written by State Farm Mutual Automobile Insurance Company (State Farm). State Farm (Respondent) denied coverage.

Petitioner then filed a breach of contract claim against Respondent in the District Court of Maryland sitting in Prince George’s County. Upon Respondent’s request for a jury trial, the case was transferred to the Circuit Court for Prince George’s County. The Circuit Court granted Respondent’s motion for summary judgment, concluding as a matter ³⁰¹ of law that Ms. Cole’s death was not the result of an “accident” within the meaning of that term as used in the policy. In an unpublished opinion, the Court of Special Appeals affirmed.

At Petitioner’s request, we granted a writ of certio-rari 1 to determine whether Ms. Cole’s death was the result of an “accident.” 2 BACKGROUND The facts of this case are not in dispute. On 17 September 1994, Petitioner and Ms. Cole traveled, in Ms. Cole’s 1994 Ford Van, to the home of William Dawson Cave. 3 Mr. Cole drove the van. Petitioner and Ms. Cole’s children, Erica (Age 5) and Cheyanne (Age 1) occupied the rear seat of the van. The purpose of the trip was to pick up Catherine Morgan Cole, Petitioner’s daughter from his previous marriage to Heather Cave, for a previously scheduled visitation.

Heather Cave was Mr. Cave’s daughter. After Petitioner pulled into Mr. Cave’s driveway, he left the engine of the van idling and exited the van to approach the house. When Petitioner was only a few steps away from the van, he encountered his former father-in-law. Mr. Cave produced a handgun and shot Petitioner two times.

Petitioner retreated to the van and, as he was opening the driver side door, Mr. Cave shot Petitioner again. Mr. Cave then circled the van toward Ms. Cole’s side of the vehicle. In her panic, she was unable to release her seat belt. Mr. Cave fired two shots at Ms. Cole from close range through the passenger window.

Mr. Cave then shot and killed himself. Petitioner survived the attack, but Ms. Cole died from her gunshot ³⁰² injuries. Cheyanne received minor injuries from flying glass. Fortunately, Erica was unharmed.

At the time of the shooting, State Farm had in effect a policy of insurance, naming Ms. Cole as the insured, covering her van. The provision of the policy that is relevant to this appeal is the “Death, Dismemberment, and Loss of Sight” clause in Section V of the policy. Section V provides, in pertinent part: We [Respondent] will pay the amount shown in the schedule that applies for death, or loss, caused by accident. The insured has to be occupying or be struck by a land motor vehicle or trailer.

The death or loss must be the direct result of the accident and not due to any other cause. The death or loss must occur within 90 days of the accident. (Emphasis in original). The amount of coverage for accidental death was $10,000.

On 13 January 1997, Petitioner, acting as the personal representative for his wife’s estate, filed a claim with Respondent requesting payment pursuant to Section V of his wife’s insurance policy. By letter dated 16 January 1997, Respondent denied Petitioner’s claim. The reason given was that, relying on DeJarnette v. Federal Kemper Ins. Co., 299 Md. 708 , 475 A.2d 454 (1984), the insurer did “not feel that the injuries sustained by Sharyn K. Cole which resulted in her death, were the result of an accident.” Essentially, State Farm viewed the cause of Ms. Cole’s death as independent of the use of the covered vehicle.

Petitioner then filed a complaint in the District Court on 6 March 1997 alleging that Respondent breached the insurance contract by refusing to pay the accidental death benefit. He sought $10,000 in damages. Respondent requested a jury trial on 29 May 1997 and the case was transferred to the Circuit Court on 12 June 1997. Petitioner filed a motion for summary judgment on 18 March 1998.

In his motion, Petitioner pointed out that the parties agreed that Ms. Cole’s insurance policy was in effect at the time of the incident and that she was seated in her van, ³⁰³ with the engine running, when she was shot fatally. He asserted that the only issue in the case was whether his wife’s death was caused by an “accident” within the meaning of the term in the relevant policy coverage. Petitioner argued that the incident which caused his wife’s death was an “accident” because she did not anticipate that she would be murdered while waiting in the van in Mr. Cave’s driveway. On 16 April 1998, Respondent filed an opposition to the Petitioner’s motion for summary judgment. 4 Respondent admitted that when Ms. Cole was murdered her van was insured under a valid State Farm policy and that she was an occupant of the insured vehicle at the time Mr. Cave shot her.

Respondent contended, however, that Maryland case law requires a casual connection between the use of a vehicle and the claimant’s death before a court may declare liability under the* policy. Respondent asserted that there was no connection between Mr. Cave’s violent acts and Ms. Cole’s use of her van. The fact that she was seated in her van when she was murdered, Respondent suggested, is not enough to impose liability under the policy. In an order dated 21 May 1998, the Circuit Court denied Petitioner’s motion for summary judgment and granted summary judgment in favor of Respondent, holding that: the word “accident” as used in Section V of the applicable insurance policy ... is defined in the typical understanding of the word and is not given the liberal definition provided under the uninsured motorist coverage, and because the facts of this case do not support the argument that Sharyn Kae Cole’s death was “caused by accident” as stated in Section V of the applicable policy.

Petitioner filed post-judgment motions, within ten days of the docketing of the order granting summary judgment, pursuant ³⁰⁴ to Md. Rule 2-534. The Circuit Court denied those motions on 17 July 1998. Petitioner noted an appeal to the Court of Special Appeals on 4 August 1998. 5 The intermediate appellate court set forth two alternative reasons for its affirmance of the Circuit Court’s judgment. Relying on an excerpt from DeJarnette v. Federal Kemper Ins.

Co., 299 Md. 708 , 475 A.2d 454 (1984), the court determined a claimant may not recover under an automobile liability insurance policy when the injury inflicted upon the claimant while situated in an automobile was caused by force or conduct not related to the use of the automobile. The court also explained, as an alternative basis, that “whether or not an injury is accidental has been held determinable by the state of mind of the person who inflicts the injury, rather than by that of the injured person,” quoting from Glens Falls ³⁰⁵ Ins. Co. v. American Oil Co., 254 Md. 120, 127-28 , 254 A.2d 658, 663 (1969). Viewing the 17 September 1994 incident from Mr. Cave’s perspective, rather than Ms. Cole’s, the court concluded that Ms. Cole’s death “in no way qualified as an ‘accident’ within the context of the [her] automobile insurance policy.” ANALYSIS I. Before we consider the merits of this appeal, we set forth the principles that will guide our interpretation of the language of the insurance policy in question.

Our primary task in interpreting an insurance policy, as with any contract, is to apply the terms of the contract itself. See Chantel Assoc. v. Mount Vernon Fire Ins. Co., 338 Md. 131, 142 , 656 A.2d 779, 784 (1995); Harford County v. Harford Mut. Ins.

Co., 327 Md. 418, 434 , 610 A.2d 286, 294 (1992); Mitchell v. Maryland Casualty Co., 324 Md. 44, 56 , 595 A.2d 469, 475 (1991); Pacific Indem. Co. v. Interstate Fire & Cas. Co., 302 Md. 383, 388 , 488 A.2d 486, 488 (1985). We look first to the contract language employed by the parties to determine the scope and limitations of the insurance coverage.

See Chantel Assoc., 338 Md. at 142 , 656 A.2d at 784 ; Kendall v. Nationwide Ins. Co., 348 Md. 157, 165 , 702 A.2d 767, 771 (1997). When interpreting the words of a contract, we seek to give the words their “customary, ordinary, and accepted meaning.” Mitchell, 324 Md. at 56 , 595 A.2d at 475 . In addition, we “examine the character of the contract, its purpose, and the facts and circumstances of the parties at the time of execution.” Pacific Indem., 302 Md. at 388 , 488 A.2d at 488 .

If the meaning of the terms of the insurance policy are plain and unambiguous, we will determine the meaning of the terms of the contract as a matter of law. See id. at 389 , 488 A.2d at 489 . If the terms are ambiguous, however, we will look to evidence from extrinsic sources such as dictionaries or an interpretation of the term employed by one of the parties before the dispute arose. See id.

A term of a contract is ³⁰⁶ ambiguous if, to a reasonably prudent person, the term is susceptible to more than one meaning. See Pacific Indem., 302 Md. at 389 , 488 A.2d at 489 ; St. Paul Fire & Marine Ins. Co. v. Pryseski, 292 Md. 187, 198 , 438 A.2d 282, 288 (1981); Truck Ins. Exch. v. Marks Rentals, 288 Md. 428, 433 , 418 A.2d 1187, 1190 (1980).

Turning to the policy at issue in this case, we note that it is, in our experience, somewhat unusual to find the type of first party coverage 6 represented by the accidental death and dismemberment coverage here in question in an automobile liability policy. Automobile liability insurance, typically thought of as third party coverage, often contains a number of types of first party coverage, such as uninsured motorist claims, collision, comprehensive, medical payments, and personal injury protection. See Bausch & Bomb, Inc. v. Utica Mut. Ins.

Co., 355 Md. 566, 582 , 735 A.2d 1081, 1090 (1999). As noted supra, Section V of Ms. Cole’s State Farm policy states, in pertinent part, that: We [Respondent] will pay the amount shown in the schedule that applies for death, or loss, caused by accident. The insured has to be occupying or be struck by a land motor vehicle or trailer. The death or loss must be the direct result of the accident and not due to any other cause.

The death or loss must occur within 90 days of the accident. (Emphasis in original). The language of the policy plainly requires the existence of three interdependent elements before Respondent is obligated to pay accidental death benefits to its insured. The insured first has to be occupying a motor vehicle when a death or loss is inflicted.

Next, the death or loss caused to the insured must be the direct result of an “accident.” 7 Finally, the death ³⁰⁷ or loss must occur within ninety days of the “accident.” Respondent concedes that Ms. Cole occupied a covered vehicle at the time she was shot and that she died within moments after she was shot. Thus, the sole focus of our inquiry in this case is whether Ms. Cole’s death was the direct result of an “accident.” Both parties assert that under Maryland law, “accident” is defined for present purposes as “a happening; an event that takes place without one’s foresight or expectation; an event which proceeds from an unknown cause, or is an unusual effect from a known cause, and therefore not expected.” Harleysville Mut. Cas. Co. v. Harris & Brooks, Inc. 248 Md. 148, 151 , 235 A.2d 556, 557 (1967) (citations omitted).

This definition provides incomplete guidance in the present case, however, because it fails to establish through whose eyes one should analyze whether Ms. Cole’s death was the result of an “accident.” The distinction is critical. The undisputed facts of this case are that Mr. Cave carried a gun to Ms. Cole’s van, aimed it toward her, and fired it. Standing in Mr. Cave’s shoes, Ms. Cole’s death hardly can be called an accident. It seems obvious that was the lower courts’ analytical vantage point and remains State Farm’s in this Court.

Switching positions, however, if one takes Ms. Cole’s perspective, her death may be said to have been the result of an accident if her murder occurred without her foresight or expectation. See id. No alternative vantage points have been suggested by the parties, nor do we deem there to be any. Therefore, our real task in this case is to determine whether the fatal incident should be analyzed from the perspective of Mr. Cave, the murderer, or Ms. Cole, the insured victim.

Respondent offers three Maryland cases to support its position that we should define the term “accident” from the actor’s, Mr. Cave’s, perspective. The first is Harleysville Mut. Cas. Co. v. Harris & Brooks, Inc., 248 Md. 148 , 235 A.2d 556 (1967).

Harris & Brooks, Inc. was an excavation contractor. After the employees of the company completed clearing ³⁰⁸ fifteen acres of land, they stacked the cleared trees in piles. The employees then added gasoline and rubber tires to the piles and set them on fire. The fire burned for two days.

Neighboring property owners brought suit against the company for the smoke damage caused to their homes by the fire. The trial court entered judgment in favor of the homeowners and awarded approximately $8,000 in damages. Harris & Brooks, Inc. paid the homeowners and then brought a suit against its general liability insurer for reimbursement. The policy that was the subject of the suit between Harris & Brooks, Inc. and its insurer required the insurer to pay all sums which Harris & Brooks, Inc. became legally obligated to pay as damages “caused by accident.” See Harleysville Mut.

Cas. Co., 248 Md. at 150 , 235 A.2d at 557 . Hence, the implicit coverage insured against third party claims. The insurance company claimed that the damages caused to the homeowners were not “caused by accident.” We agreed with the insurance company’s argument.

We observed that the fact that damages were caused by an intentional act did not preclude us from finding that they were caused by “accident” if something unforeseen produces an unexpected result. See id. at 151 , 235 A.2d at 558 . Under the facts of the case, however, we concluded that when the contractor’s employees intentionally stacked trees, set them afire with gasoline, and allowed the fire to burn for two days, the contractor should have foreseen the potential for the resultant damage. Accordingly, the homeowners’ damages were not accidental.

Respondent next directs our attention to Glens Falls Ins. Co. v. American Oil Co., 254 Md. 120 , 254 A.2d 658 (1969). The issue in Glens Falls Ins. Co. was whether the intentional crash of a vehicle into a gasoline station constituted an “accident” under the terms of the driver’s automobile liability policy.

In an apparent effort to kill himself and his wife, the insured drove his car into the gasoline pumps of a gas station. ³⁰⁹ Both the driver and his wife survived the incident. 8 The station owner brought a negligence suit against the estate of the driver and the driver’s insurance company. At the time of the incident, the policy obligated the insurer to indemnify the driver, its insured, against injuries “caused by accident,” a form of third party coverage. The station owner obtained a default judgment because both defendants failed to appear at trial. It then filed an action against the driver’s insurer attempting to collect the judgment.

The insurer argued that the crash did not constitute an “accident” under the terms of the policy because the driver intended to crash into the station. We explained that there was a significant “distinction between ‘caused by accident’ and an intentional act, the consequences of which were clearly foreseeable as well as a necessary and natural result thereof.” Glens Falls Ins. Co., 254 Md. at 127 , 254 A.2d at 662 . 9 Because the damages resulting to the gas station were the naturally expected consequences of the insured’s intentional act, we held that the damage to the station was not “caused by accident.” The final Maryland case of the principal trilogy relied upon by Respondent is State Farm Mut. Auto.

Ins. Co. v. Treas, 254 Md. 615 , 255 A.2d 296 (1969). In Treas , Harry Dawson testified that he dispatched two employees to his home to retrieve his car because during the previous night he had a domestic dispute with his wife. One of the employees, Treas, went to Dawson’s home and began to drive down the driveway.

At that point, Ms. Dawson appeared and placed herself ³¹⁰ in front of the car to prevent Treas from driving away. Treas proceeded to drive slowly forward, hoping that Ms. Dawson would step away. She refused and continued to backpedal in front of the car. Treas accelerated and drove the car over Ms. Dawson.

She died from the impact. State Farm, Treas’s automobile liability insurer, filed -a petition for declaratory judgment to establish that Ms. Dawson’s death was not covered under Treas’s policy. The relevant terms of the policy obligated State Farm to pay for liability incurred by Treas if the liability was “caused by an accident.” Again, the policy coverage at issue was for liability to a third party. The trial judge found that Ms. Dawson’s death was “caused by an accident.” We reversed the Circuit Court.

We explained that injuries caused by intentional acts may be “caused by accident” if something in the intentional act produces an unusual or unexpected result. See Treas, 254 Md. at 620 , 255 A.2d at 298 . We then compared the facts of Treas with the facts in Harleysville, where the contractor was charged with foreseeing that smoke from its intentionally set fire could damage neighboring homes. We reasoned that if by the contractor’s actions in Harleysville the damages to the houses were foreseeable, then the intentional act of Treas running over and killing Ms. Dawson certainly was foreseeable.

Because we determined that Treas should have expected to strike Ms. Dawson with the car, we held that her death was not “caused by an accident.” Respondent offers Harleysville, Glens Falls Ins. Co., and Treas to support its position that we should view the events that caused Ms. Cole’s death from Mr. Cave’s perspective. Respondent reasons that in each of the above cases this Court viewed the events that caused the damage from the actor’s point of view and denied coverage in each case because the actor’s intentional acts caused foreseeable damages. According to Respondent, when injury is caused by an intentional action, the injury cannot be the result of an “accident” because the actor intended to cause the resultant damage.

Carrying that reasoning to the present case, Respondent asserts that “[t]his [Cjourt should follow its prior decisions in this instance, ³¹¹ and define “accident” according to its common, ordinary and everyday meaning, which would define the term from the perspective of the actor so as not to include the intentional shooting of another person.” Respondent advances shallow interpretations of Harleys-ville, Glens Falls Ins. Co., and Treas . State Farm does not take into account reasoning in each of the cases that states “the fact that an injury is caused by an intentional act does not preclude it from being caused by accident if in that act, something unforeseen, unusual and unexpected occurs which produces the event.” Harleysville, 248 Md. at 151-52 , 235 A.2d at 558 ; see also Glens Falls Ins. Co., 254 Md. at 127, 254 A.2d at 662 ; Treas, 254 Md. at 620 , 255 A.2d at 298 .

The test employed in these cases is not whether the actor intended the effects of his or her actions. Rather, the question that a court must answer is whether the damage caused by the actor’s intentional conduct was “unforeseen, unusual and unexpected.” See id. Based on this test, the cases cited to us by Respondent actually may support Petitioner’s position in the present case. If we determine that the proper perspective to view the relevant incident is that of the insured’s, we must then view the events that caused