Georgia Supreme Court Blog

March 2, 2010

Landmark Insurance Coverage Ruling: “Cause Theory” Adopted by Deeply Divided Court

Filed under: David Nahmias, insurance, Robert Benham, torts — bce30064 @ 7:45 pm

The Georgia Supreme Court has split 4-to-3 in response to a question posed by a federal court. The decision appears to fill void significant void in case law that arises when parties attempt to determine the extent of insurance coverage available in catastrophic injury cases with multiple victims. In a rare display of internal division, the Georgia Supreme Court has adopted the “cause theory” under which a single event has occurred for insurance purposes when numerous injuries were caused by the same act or omission.

At issue is whether one accident or two occurred when a Ford Explorer driven by Rachel Griffin struck bicyclists Matthew Scott Matty and Jeffrey Michael Davis in Harris County, killing Matty and severely injuring Davis.

According to the evidence and briefs filed in the case, in February 2008, Griffin hit the two bicyclists while all three were headed west on Georgia Route 315. First she hit Matty, who was thrown onto the windshield and over the top of her car. The impact killed him. About a second later, her Explorer hit Davis. Griffin told investigators that she had “blacked out” and had no memory of the wreck. The survivor, Davis, also had no memory of what happened.

At the time of the incident, the Explorer was covered by an insurance policy Griffin’s parents had with State Auto, which stated that $100,000 was “the “maximum limit of liability for all damages from any one auto accident,” and that was “regardless of the number of” claims made or vehicles involved in the wreck. Family members of Matty and Davis have both submitted claims to State Auto, each demanding the maximum $100,000 allowed under the policy for each accident.

The insurance company filed an action in the U.S. District Court for the Middle District of Georgia in Macon, asking the court to declare that the policy limits the total it can pay for both victims to $100,000 for the single accident.

The federal court asked the state Supreme Court how to determine whether there has been one accident or two when a vehicle strikes one person then quickly strikes another when the term “accident” is not clearly defined in the policy. Specifically, the district court asks which of three approaches used by other states this state’s high court wants to use in defining “accident ” – the “cause” theory, which determines the number of accidents by the number of causes of the injuries, the “effect” theory, which says that each individual injury constitutes a separate accident, or the “event” theory, which looks to the number of events that resulted in the injuries.

“We adopt the ’cause’ theory for application in Georgia,” the majority stated in an opinion written by Justice David Nahmias (data). “Automobile accidents involving multiple vehicles and multiple injured parties…are an everyday occurrence on our roads.” State Auto’s policy was clearly designed to limit liability in accidents involving multiple vehicles and multiple victims. “Defining accident as urged by the claimants – that is, by the number of impacts regardless of how close in time and place they occurred – would mean that there can never be one accident
and a $100,000 limit of liability in a multiple vehicle collision, because it is virtually impossible for multiple vehicles to collide truly simultaneously…” Joining in the majority were Justices Hugh Thompson, P. Harris Hines and Harold Melton.

In dissent, Justice Robert Benham (data) wrote that the majority “disregards a long line of precedent in this state that an insurance policy is a contract and, if there is any ambiguity to be found therein, the ambiguity must be construed against the insurer.” There is no need for a hard and fast rule, as the district court requests, the dissent stated. “Here, it is unnecessary to adopt any of the theories requested by the district court because the matter may be resolved by the rules of contract construction.”

“Neither the district court’s nor the majority’s opinion explain why the rules of contract construction are insufficient to resolve the case at hand. Accordingly, I believe more analysis is warranted on the part of the district court…” Chief Justice Carol Hunstein and Presiding Justice George Carley join in the dissent.

More Information:
Georgia Supreme Court Opinion Database: STATE AUTO PROPERTY AND CASUALTY CO. V. MATTY, ET AL. (S09Q1846)
Georgia Personal Injury Law Reference Page
Georgia Insurance Coverage Reference Page

Summary by the Georgia Supreme Court Public Information Office
Attorneys for Plaintiff (State Auto): William Turnipseed
Attorneys for Appellees (Matty): Peter Daugherty, Dustin Brown, Andrew Cash


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