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Associated Aviation Underwriters v. Wood9/29/2004
occurrence" under AAU's policies, "Intervenors must establish, by competent, admissible testimony from witnesses," the following:
a. Facts which prove actions or omissions by TAA/City (or for which they are vicariously liable) constituting an "accident" or "occurrence" at the airport premises, and
b. Facts which prove that the said actions or omissions were negligent, as opposed to intentional, and
c. Facts which prove that TCE emanating from the airport premises entered the regional aquifer and found its way to the workplace, school or home of each Intervenor[.]
On the issue of the timing of the alleged accidents or occurrences, the court stated Intervenors were required to prove
a. Facts which prove that the said actions and omissions caused TCE to emanate from the airport premises into the aquifer during the policy period of any AAU policy at issue.
b. Facts which prove actual injury caused to each Intervenor from TCE emanating from the airport premises during the policy period of any AAU policy at issue.
Based on its Morris argument, AAU contends the trial court correctly determined in its pretrial order those facts Intervenors had to prove. AAU argues, however, the trial court improperly deviated from the order by "completely changing the standard of proof and completely adopting (without prior notice) Intervenors' approach to the case." By ultimately finding coverage despite not having required Intervenors to show TAA/City's actions actually had caused any injury they allegedly suffered, AAU argues, the trial court impermissibly ignored its own pretrial order.
To the extent AAU's arguments relate to what Intervenors were required to prove regarding the nature and timing of their injuries, we address them below in our discussion of whether insurance coverage was triggered here. See 66-99, infra. To the extent AAU argues the trial court erred in failing to require Intervenors to prove that "an act or omission, for which TAA/City was liable, had caused TCE to enter Tucson's water supply," we disagree.
As discussed at length above, Morris prohibits an insurer from litigating in the coverage phase of a DRA legal and factual issues bearing on the insured's liability imposed pursuant to a stipulated judgment. Thus, although Intervenors apparently presented no evidence showing that TAA/City was somehow vicariously responsible for TCE having contaminated the aquifer -- an assertion Intervenors do not contest -- the trial court did not err in essentially relieving Intervenors of that burden in light of Morris. And, under Morris, the trial court's deviation from the pretrial order was justified because, as Intervenors point out, "the trial court would have committed legal error by permitting the parties to relitigate liability issues in the context of determining coverage." See Ariz. R. Civ. P. 16(e), 16 A.R.S., Pt. 1 (pretrial order shall control subsequent course of action but may be modified to prevent manifest injustice); Carlton v. Emhardt, 138 Ariz. 353, 355, 674 P.2d 907, 909 (App. 1983) (same); S. Pac. Co. v. Loden, 19 Ariz. App. 460, 464, 508 P.2d 347, 351 (1973) (pretrial order controls course of litigation unless modified at trial).
Moreover, despite the pretrial order, this court's prior decision in Smith placed AAU on notice that Intervenors were not required to present evidence on TAA/City's liability in order to establish coverage. See 14-15, 38-41, supra. In any event, Intervenors consistently maintained below that, regardless of the trial court's order, they did not intend to offer any evidence bearing on TAA/City's liability in the Valenzuela or Gerardo c
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