LIPEZ, Circuit Judge.
After plaintiffs Hartford Fire Insurance Company ("Hartford") and Federal Insurance Company ("Federal") settled a wrongful death suit, they sought equitable contribution from the defendants, CNA Insurance Company (Europe) Limited ("CNA Europe") and CNA Insurance
The plaintiffs appeal, arguing that the court's interpretation was incorrect and that, given the facts surrounding the decedent's death, the policy requires the defendants to contribute to the defense and settlement costs. We conclude that, even under the plaintiffs' construction of the phrase "arising out of," the defendants are not liable for any contribution. We thus affirm.
Stephen Custadio, a 53-year-old maintenance supervisor at the Fall River, Massachusetts facility of Roma Color, Inc., was working on a materials lift on November 20, 2003, when the lift jammed and then fell approximately two stories. Custadio was impaled through his eye by a metal pipe and died. In 2005, his widow sued European Colour PLC, of which Roma Color was a subsidiary, alleging negligence and wrongful death. European Colour eventually settled the claims against it for $2,750,000.
Both Hartford and Federal defended European Colour during the Custadio litigation under the terms of two insurance policies. The Hartford commercial general liability policy limited coverage to $1,000,000 per occurrence. Federal issued Roma Color an excess "follow-form" policy, which also covered European Colour, and limited coverage to $5,000,000 per occurrence. In accordance with those policies, Hartford paid $1,000,000 toward the Custadio settlement and Federal paid $1,700,000.
In addition to the Hartford and Federal policies, European Colour was insured by CNA Europe. The CNA Europe policy provided coverage up to £2,000,000 per occurrence for "liability in respect of personal injury ... happening anywhere within the United States of America ... arising out of business visits by directors or non-manual employees" who ordinarily reside in the United Kingdom.
While the Custadio litigation was pending, counsel for Hartford and Federal sought contribution from CNA Europe for both the costs of defending European Colour and any potential liability. CNA Europe refused to contribute. It maintained that its policy did not cover Mr. Custadio's accident because, while European Colour employees made numerous business visits to the United States, the accident did not "aris[e] out of" those visits.
The following facts are undisputed; we view them in the light most favorable to the appellants, Hartford and Federal. Galera v. Johanns, 612 F.3d 8, 10 n. 2 (1st Cir.2010).
The business visits underlying Hartford's and Federal's claims occurred during
Myles visited the Fall River facility approximately eighteen times between February 2000 and July 2003. He was responsible for overseeing health and safety at the facility, and he observed several issues there that concerned him. During approximately three of his six visits in 2001, Myles spoke with Michael Clayton and John White, Roma Color's general manager and technical director, respectively, about the materials lift.
In 2002, Myles conducted a preliminary health and safety review and then recommended to the European Colour board that a full audit be conducted by Michael Cooper, the environmental manager at EC Pigments, Ltd., a European Colour subsidiary. Cooper visited Fall River in February 2003 and spoke with Clayton. Clayton commented that he would rather spend money on "a new elevator"
Neil McKinlay, European Colour's Supply Chain Director, and George Hughes, European Colour's Managing Director, visited Fall River from October 6 to 10, 2003, at which time McKinlay conducted a broad health and safety review of the facility. McKinlay's most important responsibility during the trip was to ensure that the facility's safety procedures were sufficient to prevent accidents to employees. This goal was part of the "Zero Standards" program introduced by Stephen Smith, chairman of the European Colour board, which dictated that the only acceptable number of accidents was zero.
At the time of his visit, McKinlay was aware of a January 2002 incident in which the emergency braking device on the materials lift had failed. He also knew that the lift had been repaired, inspected, and placed back into service. He had not been told, however, that the lift had fallen again in September 2003, shortly before his visit, and indeed did not discover that fact until years later, at his deposition in the Custadio lawsuit. During the visit, both Clayton and Nadilio Almeida, Custadio's supervisor at Roma Color, told McKinlay that they wanted to replace the materials lift, in order both to increase capacity and improve safety. Despite the requests and McKinlay's duty to review the safety at the facility, he did not inspect or inquire about the materials lift's emergency braking device. Moreover, McKinlay knew that Custadio maintained the lift and was the most knowledgeable among the Fall River personnel about its condition, but the two did not discuss it.
During the return trip to the United Kingdom, on approximately October 10, 2003, McKinlay told Hughes that there had been a request for a large capital expenditure to add an additional lift at the Fall River facility. McKinlay advised that another lift was unnecessary, however, and that spending $100,000 on a new one was wasteful. After he returned, McKinlay discussed several of the facility's safety issues with Smith, the chairman of the European Colour board, but McKinlay did not mention the materials lift.
The plaintiffs moved for partial summary judgment and the defendants cross-moved for summary judgment. In granting the defendants' motion, the district court construed the phrase "arising out of" in the CNA Europe policy to require "a strong and close causal connection with some specific conduct on the part of the director when involved in a business visit," and found that Hartford and Federal "failed to articulate any colorable causal connection, let alone a strong and close connection, between Mr. Custadio's accident and business visits by European Colour directors and non-manual employees." Hartford Fire Ins. Co. v. CNA Ins. Co. (Europe), 678 F.Supp.2d 1, 11 (D.Mass. 2010).
We review de novo the district court's grant of summary judgment. Mass. Museum of Contemporary Art Found., Inc. v. Büchel, 593 F.3d 38, 52 (1st Cir.2010). "`The presence of cross-motions neither dilutes nor distorts this standard of review.'" Id. (quoting Scottsdale Ins. Co. v. Torres, 561 F.3d 74, 77 (1st Cir.2009)). Rather, where the parties filed cross-motions for summary judgment, as they did here, we must determine based on the undisputed facts whether either the plaintiffs or the defendants deserve judgment as a matter of law. Id. (citing Littlefield v. Acadia Ins. Co., 392 F.3d 1, 6 (1st Cir.
The parties agree that the phrase "arising out of" should be interpreted according to English law.
In Scott, the court concluded that the theft of a Kuwait Airways fleet and the destruction of a British Airways plane were not losses "arising from one event," namely Iraq's invasion of Kuwait and closure of Kuwait International Airport. [2003] EWCA (Civ) 688, [83]. The court held that the phrase "arising from one event" requires a "significant causal link," which was not present in that case. Id. at [68].
In Dunthorne, the insured's car ran out of gas on the side of a road. [1999] Lloyd's Rep. I.R. at 561. After an acquaintance pulled over on the opposite side, the insured ran across, presumably to get help. The claimant, who was driving on the road, hit the insured and suffered injuries. The insured was killed. The court concluded that the claimant's injuries "ar[ose] out of the use of the [insured's] vehicle." Id. at 561. The court explained that the phrase "`arising out of' contemplates more remote consequences than those envisaged by the words `caused by,'" but "`excludes cases of bodily injury in which the use of the vehicle is a merely casual concomitant, not considered to be, in a relevant causal sense, a contributing factor.'" Id. at 562 (citing Gov't Ins. Office of New S. Wales v. Green & Lloyd (1965) 114 C.L.R. 437, 447 (Aust.)).
We need not decide which interpretation of the phrase "arising out of" applies here as a matter of law. Instead, we conclude that Custadio's injuries and death did not "aris[e] out of business visits by directors or non-manual employees," even assuming the application of appellants' broader construction of the phrase. Under the Dunthorne construction, the business visits must have been not only a contributing factor to the accident, but they also must have been a contributing factor "in a relevant causal sense." Here, the evidence proffered by appellants does not establish the necessary degree of causation.
As a majority of the English court acknowledged, the facts of Dunthorne "put [the case] close to th[e] line" demarcating the boundaries of the phrase "arising out of." Id. at 563 (Hutchison L.J.); id. (Pill L.J.) (explaining that the facts make it a "difficult" case and that "[f]inding in the plaintiff's favour ... has the danger of opening the door to situations that fall on the other side of the line"); see also Slater v. Buckinghamshire Cnty. Council, [2004] EWHC 77, [118] (stating that, in Dunthorne, the insured's "actions only just fell within the right side of the line of `arising out of the use of the vehicle'"). As the court in Dunthorne explained:
[1999] Lloyd's Rep. I.R. at 562. The court concluded that "[t]he plaintiff's injuries were caused by [the insured] seeking help to continue her journey. They arose out of her use of the car as she would not have crossed the road if she was not out of petrol and seeking help to continue her journey." Id. at 563.
Thus, in Dunthorne, the court relied on the proximity of the injuries, in both time and space, to the use of the car. The court found that the former arose out of the latter because the insured was in the road next to her car, immediately following the use of the car, in order to facilitate the continued use of the car.
Appellants argue that European Colour directors failed in their safety-related duties during their business trips to the Fall River facility, and that the accident arose from these failures within the meaning of the insurance policy. As noted, they adduced evidence of several trips by Myles, Cooper, McKinlay, and Hughes, each of whom had certain responsibilities for safety at the Fall River facility. According to appellants, some of those individuals became aware of concerns regarding the safety of the materials lift or, despite a duty to become aware of such concerns, failed to do so. Those individuals then failed to report safety issues relating to the materials lift to European Colour's board, which would have been ultimately responsible for making a capital expenditure over $10,000 to repair or replace the lift. Appellants argue that "European Colour's senior management and board were entirely dependent upon information learned on business visits and conveyed by McKinlay and Cooper," and thus,
As the district court explained, however, this argument "conflate[s] questions of liability and causation." Hartford Fire Ins. Co., 678 F.Supp.2d at 13. Even if the evidence showed that there were failures to appreciate safety issues relating to the materials lift, or failures later to communicate concerns about the materials lift developed during business visits, the question is not whether the accident arose in part out of such omissions (the liability question), but rather whether the accident arose out of a business trip within the meaning of the policy (the insurance question).
There is little doubt that the evidence adduced by the appellants would at least raise a genuine issue of material fact regarding the liability of European Colour for the accident. Without delving into the appropriate legal standard for liability, the evidence shows that four European Colour directors had various responsibilities regarding the safety of Roma Color employees at the Fall River facility. Myles was directly responsible for health and safety at the facility, Cooper was sent specifically to perform a safety audit there, and McKinlay conducted yet another health and safety review. Both Myles and Cooper were alerted by Clayton to some concerns regarding the materials lift, and McKinlay was also aware of requests for a capital expenditure on a new lift, but concluded that spending the money would be wasteful. Each of these acts and omissions arguably had some causal effect upon the state of the materials lift on the date of Custadio's accident, and thus implicated the liability of European Colour for that accident.
The insurance question requires a different analysis of the same evidence. It turns not on the culpability of the European Colour directors for the accident, but rather on the relationship between the accident and the business visits of European Colour directors to the Fall River facility, and whether that relationship is sufficiently close to trigger coverage under the CNA Europe policy. In Dunthorne, the question was not whether the insured should have crossed the road or should have filled her gas tank, and whether the accident arose out of her culpable act or omission. Answers to those inquiries would resolve the issue of whether the insured (or her estate) was liable for the other driver's injuries. Indeed, the estate "admitted that the claimant's injuries had been caused by [the insured]'s negligence." [1999] Lloyd's Rep. I.R. at 560. Rather, the question was whether the accident and resulting injuries arose out of the use of the car — the covered activity. In finding that the accident arose out of the use of the car, the court relied on the close relationship of the accident to the covered activity. The accident took place while the insured was still engaged in using — or trying to use — the car. The insured had just run out of gas and crossed the road to obtain help so she could continue using her car. Even with this proximity in time and place between the covered activity (use of the car) and the accident, the facts in Dunthorne "put [the case] close to th[e] line" marking the outer boundary of the "arising out of" language. [1999] Lloyd's Rep. I.R. at 563 (Hutchison, L.J.).
Here, the accident and the business trips to the Fall River facility are connected by a tangled web of facts, many of which are remote in time and place from the accident. The directors took business
Affirmed.
For purposes of its summary judgment order, the district court accepted that this evidence supported the contention that the budget entry related to the materials lift, not the receiving lift. On appeal, the appellants state that their argument does not depend upon that inference. That is so because they focus on the culpable omissions of the four European Colour directors. Under that theory, if Myles's capital request related to the materials lift, the omission was Myles's failure to take the request to the European Colour board for approval. If the budget item was related to a different lift, Myles's culpable omission was failing to respond to Clayton's concerns about the materials lift.
