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Makarka v. Great American Insurance Co.12/22/2000
faulty brakes. But Makarka's complaint against Callihan never alleged that Makarka was owed compensation for damage to Voliva's brakes -- a claim that properly would have belonged to Voliva. Instead, Makarka's complaint simply alleged that he was owed compensation for bodily injuries caused by Callihan's negligent repair.
Here, bodily injuries for which Makarka sought damages occurred on August 27, 1991. Because Makarka did not own Voliva's truck at the time of repair, he could not show any reasonably ascertainable facts that would give rise to a duty to defend when the Great American policy was still in effect. Since the Great American policy was canceled by April 1, 1991, Great American did not owe Callihan either a defense or indemnity for liability stemming from an accident in August.
Makarka points out, however, that courts have carved out exceptions to the date-of-occurrence rule where the words "occurrence" and "accident" introduce ambiguity into a policy's terms and argues that this case should also be excepted. In particular, Makarka cites Insurance Company of North America v. Sam Harris Construction Company. Because the reasons driving the cases Makarka cites are not present here, we decline to follow them.
Sam Harris interpreted a policy that indemnified its insured for injury or destruction of property "arising out of" aircraft maintenance, but that limited itself to "occurrences or accidents which happen during the policy period." The Sam Harris court ruled that because the policy failed to define the term "occurrence," it had to be read broadly to include "events" and "incidents," including "negligent repairs that do not cause immediate injury but do result in a later accident." Therefore, the court ruled that the insurer had a duty to defend the insured against a claim based on injury occurring after the policy was canceled if the negligence occurred while the policy was in force.
The reasoning in Sam Harris does not apply here because the Great American policy is not triggered by an "occurrence" or "accident." When used in a policy without further definition, these nouns can sometimes create ambiguity, since, when negligence and consequent injury occur separately, "occurrence" and "accident" might refer to either the incident in which the negligence occurred or the incident in which the injury was suffered. But the Great American policy avoids this potential ambiguity by specifying precisely what must occur and when it must occur: under the policy, the triggering events of coverage are "'bodily injury,' 'property damage' and 'losses' occurring . . . uring the policy period."
We find nothing ambiguous in this phrasing. "Occurring" is the present participle of the verb "to occur," which means to "come to pass[,] take place[, or] happen." Thus, the durational restriction in the Great American policy plainly limits coverage to cases in which "bodily injury," "property damage," or "losses" "come to pass," "take place," or "happen" during the policy period. This language cannot reasonably be read as a reference to negligent acts that predate the occurrence of injury.
The word "accident" is also unambiguous as used in the Great American policy. The policy's coverage grant reads:
We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies caused by an "accident" and resulting from "garage operations." (Emphasis added.)
In this sentence, the events that trigger coverage are bodily injuries and property damage, not accidents. The phrase "caused by an accident" appears in the coverage term to ensure that only injuries t
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