Riddle of the Dump Truck: One “Unfortunate Event” or Three?

How many accidents does a dump truck have when it strikes an overpass and loses its dump box in traffic? That’s what happened in April 2010, when the driver of a truck owned by Stony Ridge Top Soil and insured by the National Liability and Fire Insurance Co. misjudged the clearance on I-90. The impact severed the dump box from the chassis, and two vehicles, a minivan and an SUV, collided with the box. So did the driver have one accident or three?

This is not simply an academic question; it is a serious matter for the insurance company, which has promised to indemnify Stony Ridge Top Soil a maximum of $1 million per accident. If a court rules that the driver had one accident with various victims, the insurer is on the hook for $1 million at most. But if the court rules that the driver had three accidents, the insurer could pay out as much as $3 million.

Some may argue that since there was one incident that caused all the damage, there is only one accident. This is the “sole proximate cause” approach, and under such reasoning, all plaintiffs would share a single $1 million payout. We might also look at the problem from the point of view of the injured and conclude that each party has his own claim and therefore his own accident. But that “one accident per person” approach would seem impractical when the number of claimants exceeds the number of accidents for which the driver is insured. Finally, there is the “unfortunate event” approach, which examines the nature of the incident that gave rise to damages.

The accident took place in New York, where courts take the “unfortunate event” approach, so the court made a two-part inquiry:

1. What is the operative incident that gives rise to liability for each claim?
2. Are those incidents part of the same causal continuum or have there been intervening agents or factors?

A federal trial court applying New York law found that the collision with the overpass was unrelated to the collisions with the box, and that each collision with the box was unrelated to the other. The insurance company appealed the ruling, but a three-judge panel affirmed it and, this past November, the U.S. Court of Appeals for the Second Circuit declined to rehear the case.

The ruling compels the insurance company to allocate up to $1 million for each accident’s plaintiffs: the New York State Thruway Authority Corp. for the damage done to the overpass, the driver and passengers of the minivan, and the driver and passengers of the SUV.

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