Hunton Insurance Recovery Blog

On July 2, 2019, the Fifth Circuit held in Frederking v. Cincinnati Ins. Co.., that Cincinnati Insurance Company was on the hook for injuries resulting from a drinking and driving collision because the collision amounted to an “accident” under its insurance policy. 2019 U.S. App. LEXIS 19796, __ F.3d __, 2019 WL 2751700.

In the underlying litigation arising from the crash, Richard Brett Frederking was awarded $207,550 in exemplary damages, among other damages, against Advantage Plumbing Services because Advantage’s intoxicated employee caused the automobile collision and injured Frederking. Advantage had two insurance policies with Cincinnati – an auto insurance policy and an excess policy. Like most liability policies, the Cincinnati policies covered damages resulting from “accidents” caused by Advantage’s employees that produce defined injuries. Frederking sought indemnification for the exemplary damages from Cincinnati, but Cincinnati refused to pay, contending that it had no duty to indemnify because the employee’s choice to drink and drive was intentional and, therefore, the collision he caused was not an “accident” under Texas law. Frederking sued Cincinnati in Texas state court for breach of contract and declaratory judgment. The district court agreed with Cincinnati’s interpretation, and Frederking appealed.

Because neither policy defined the term “accident,” the Fifth Circuit looked to the plain meaning and ordinary use of the term to determine whether a drunk driving collision constituted an “accident.” The Fifth Circuit held there was “no reason to describe the automobile collision in this case as anything other than an ‘accident’” because even though the employee made the decision to drink (and then later drive), there was no evidence the employee intended to collide his vehicle with another vehicle. To hold otherwise, the Fifth Circuit noted, would “defeat the widely held expectations of the countless insureds who purchase automobile insurance precisely to protect against these kinds of ‘accidents.’” The Fifth Circuit also found that Texas Supreme Court precedent rejected Cincinnati’s argument based on the fact the collision was neither “highly probable” nor the “natural and expected” result of intoxicated driving. Accordingly, the Fifth Circuit reversed the district court’s holding and remanded for further consideration.

The Frederking decision illustrates how even egregious intentional conduct may still be considered an “accident” as that term is commonly construed in the context of liability insurance and, therefore, sufficient to trigger coverage where the conduct is not accompanied by an intent to cause injury.