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Aluminum Co. of America v. Aetna Casualty & Surety Co.5/4/2000
. The Supreme Judicial Court of Massachusetts has interpreted the term 'cause of action accrues' to mean the point at which the insured's cause of action against the insurer ripens, i.e., when the insurer denies coverage. See Barton v. Automobile Ins. Co., 309 Mass. 128, 34 N.E.2d 516 (1941). See also Goldsmith v. Reliance Ins. Co., 353 Mass. 99, 228 N.E.2d 704 (1967). Alcoa's claims under these Massachusetts-based policies are therefore not barred by the suit limitation clause.
While the trial court did not err in holding Alcoa's brokers were agents for the delivery of the policy jackets, and the policy jackets were part of the insurance contracts, the trial court erred in its treatment of when the repose period of the suit limitations clause commences under Pennsylvania and Massachusetts law. We therefore reverse the trial court's conclusion at Paragraph I(B) of the Amended Order Granting in Part Defendants' Motion for Summary Judgment re: Suit Limitation, filed May 15, 1996, and remand the case for further proceedings consistent with the correct standard under Pennsylvania and Massachusetts law.
F. Fortuity
The largest issue in the case was the fortuity issue, which consumed at least half the trial time and at least half of the jury deliberation period. 'Implicit in the concept of insurance is that the loss occur as a result of a fortuitous event not one planned, intended, or anticipated.' Lee R. Russ & Thomas F. Segalla, 7 Couch on Insurance 3d sec. 101:2, at 101- 8 (1997). 'The fortuity principle is central to the notion of what constitutes insurance. The insurer will not and should not be asked to provide coverage for a loss that is reasonably certain or expected to occur within the policy period.' Eric Mills Holmes & Mark S. Rhodes, 1 Appleman on Insurance 2d sec. 1.4, at 26 (1996).
In Washington, we call the fortuity principle the known risk principle, and first enunciated it in Public Util. Dist. No. 1 v. International Ins. Co., 124 Wn.2d 789, 805, 881 P.2d 1020 (1994): 'The known risk defense is premised on the principle that an insured cannot collect on an insurance claim for a loss that the insured subjectively knew would occur at the time the insurance was purchased.' Accord Hillhaven Properties Ltd. v. Sellen Constr. Co., 133 Wn.2d 751, 767, 948 P.2d 796 (1997) (extending known risk principle to first-party insurance). Moreover, 'The knowledge that some loss may occur in the future is the driving force behind the purchase of insurance.' Public Util. Dist. No. 1, 124 Wn.2d at 808. 'The known risk, known loss, and loss in progress defenses are generally considered to be part of the 'fortuity' requirement that runs throughout insurance law.' 7 Couch sec. 102:9, at 102-24.
Oddly, the fortuity principle never appears in insurance contracts. The principle is rooted in common law and in the statutes of at least six states. M. Elizabeth Medaglia, et al., The Status of Certain Nonfortuity Defenses in Casualty Insurance Coverage, 30 Tort & Ins. L.J. 943, 986 (1995) (listing state statutes). The fortuity principle has the effect of an exclusion. That is, an all-risk policy might provide coverage for all risks minus named exclusions, but never provides coverage for nonfortuitous events, even though nonfortuitous events are not named exclusions in the policy. For this reason, the fortuity principle is sometimes called the unnamed exclusion. Stephen A. Cozen & Richard C. Bennett, Fortuity: The Unnamed Exclusion, 20 Forum 222, 222 (1985).
From the outset, the DIC insurers raised lack of fortuity as an affirmative defense. For instance, Columbia Casualty Company alleged in its answer:
Plaintiffs' claim
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