Carlos Xavier Sanchez (Sanchez) was intoxicated while driving a truck that had been assigned to him by his employer. Advantage Plumbing Services (Advantage) owned the truck which was insured by Cincinnati Insurance Co. (Cincinnati). Sanchez failed to yield (at an intersection?) and collided with a vehicle resulting in injury to the driver, Richard Brett Frederking (Frederking).

Frederking sued Sanchez and Advantage in a Texas state court. A jury found Sanchez’s conduct to be grossly negligent and Advantage was negligent in trusting Sanchez with the vehicle. Sanchez and Advantage were held jointly and severally liable for compensatory damages in the amount of $137,025. In addition, the jury awarded $207,550 in punitive damages.

Cincinnati agreed to pay Frederking the compensatory damages on behalf of Advantage and declined to pay the punitive damages. Frederking then sued Cincinnati for breach of contract arguing that both the automobile and the umbrella policies covered “accidents” caused by Advantage’s employees. Cincinnati removed to federal court and counter claimed for summary judgement. Cincinnati argued that the event was not an “accident” rather, drunk driving was an intentional act. Further, Cincinnati contended that the grossly negligent conduct of Sanchez would preclude him as an insured.

The word “accident” is not defined in the policies; therefore, the general meaning and common usage of the term was applied. The event was found as fortuitous, unexpected, and unintended because Sanchez did not intent to collide with Frederking’s automobile and he did not drink, hoping to cause a collision.

The case was remanded to the district court for further consideration.

RICHARD BRETT FREDERKING, Plaintiff-Appellant v. CINCINNATI INSURANCE COMPANY, Defendant-Appellee, No. 18-50536., Filed: July 2, 2019, United States Court of Appeals, Fifth Circuit.