Zurich American Insurance Company v. Barbara G. Goodwin

IN THE SUPREME COURT OF MISSISSIPPI

NO. 2003-CA-02439-SCT

ZURICH AMERICAN INSURANCE COMPANY

v.

BARBARA G. GOODWIN, INDIVIDUALLY;
RAPHAEL GOODWIN, JR., INDIVIDUALLY; EMMA
DELORES GOODWIN, A MINOR, BY AND
THROUGH HER MOTHER AND NEXT FRIEND,
VALERIE HUGHES; THE ESTATE OF RAPHAEL
GOODWIN, SR., BARBARA G. GOODWIN,
ADMINISTRATRIX; ROBIN C. THRASHER; LAURA
NAUDITT; LIZABETH NUTTER; KELLY
THRASHER, INDIVIDUALLY AND ON BEHALF OF
ALL WRONGFUL DEATH BENEFICIARIES OF
GUY STEPHEN THRASHER; AND ROY C. GRAFE
AND HELEN KAY GRAFE

DATE OF JUDGMENT: 10/28/2003
TRIAL JUDGE: HON. ROBERT G. EVANS
COURT FROM WHICH APPEALED: COVINGTON COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: EDWARD J. CURRIE, JR.
BRITTANY ELIZABETH REID
ATTORNEYS FOR APPELLEES: HENRY PALMER
WILLIAM B. PARKER
O. STEPHEN MONTAGNET, III
GROVER CLARK MONROE, II
NATURE OF THE CASE: CIVIL - INSURANCE
DISPOSITION: REVERSED AND REMANDED - 01/26/2006
MOTION FOR REHEARING FILED:
MANDATE ISSUED:

EN BANC.

COBB, PRESIDING JUSTICE, FOR THE COURT:
¶1. Zurich American Insurance Company (Zurich) filed this appeal from the Covington

County Circuit Court’s grant of summary judgment to three sets of plaintiffs involved in a

multi-vehicle accident. Zurich, one of many defendants, provides liability insurance to another

defendant, West Side Transport, Inc. (West Side). The summary judgment addressed the limit

of liability under the Zurich policy, specifically whether Zurich’s liability is limited to $1

million due to a “single accident,” or $1 million for each vehicle connected to the collision.

The circuit court held that Mississippi law controlled, found the insurance policy ambiguous,

held that under Mississippi law there were eight accidents rather than one, and that the “per

accident” limit of $1 million would apply to each vehicle. We hold that the circuit court erred,

because the question of the limit of liability must be determined under Iowa law.

FACTS

¶2. On June 20, 2002, road work being done by other defendants caused a backup of traffic

on Interstate 20/59 in Lauderdale County, Mississippi. An eighteen-wheel truck, operated by

Joseph McCrary, a West Side employee, encountered the backup of traffic, was unable to stop,

and collided with eight other vehicles, causing two fatalities, numerous injuries and property

damage. The driver of the truck was insured under West Side’s Truckers Policy, issued

by Zurich, which provided a liability limit of $1 million for any one accident. Subsequently

three separate actions were filed in Mississippi state courts, and a federal interpleader action

was also filed.1

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On July 2, 2002 West Side and Zurich filed a federal action for interpleader relief,
naming all known plaintiffs and defendants as defendants, and depositing $1 million with
the court, asking the court to find $1 million to be the limit of their liability covering all
plaintiffs’ claims. There were several other complaints and proceedings involved in this
case that are not discussed here, including the removal of all cases to federal court and

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¶3. The first complaint was by the wrongful death beneficiaries of Raphael Goodwin

(Goodwin) in the Lauderdale County Circuit Court. Defendants included Joseph McCrary, the

driver of the truck, and West Side, owner of the truck. Next, plaintiffs Kay and Roy Grafe

(Grafe) filed a personal injury complaint in the Covington County Circuit Court. A month

later, the wrongful death beneficiaries of Stephen Thrasher (Thrasher) filed suit in the

Covington County Circuit Court, also naming as defendants all known plaintiffs and defendants,

and seeking a declaratory judgment regarding the Zurich insurance policy.

¶4. West Side is an Iowa corporation with its principal place of business in Iowa. West

Side’s insurance policy was negotiated and issued in Iowa by Cottingham and Butler, Inc.,

which has its principal place of business in Iowa. Zurich is a New York corporation with its

principal place of business in Illinois. The main state of operation for West Side’s drivers is

Iowa, although West Side admits its drivers travel to and from various states to facilitate the

corporation’s business. The truck was licensed in Iowa. The Zurich policy includes policy

extensions for a covered vehicle, when it is away from the state where it is licensed, that will

increase the limit of insurance for liability coverage to meet the limit specified by a

compulsory or financial responsibility law of the jurisdiction where the covered vehicle is

being used. The insurance contract contained no choice of law provision.

¶5. In January 2003, Thrasher filed a summary judgment motion against Zurich in which

Goodwin and Grafe joined. This motion requested the court find Mississippi law controlled

subsequent agreed order to remand to the respective trial courts; declaratory judgment
relief filed by Zurich in federal court; and requests for stays by both sides in their
respective preferred venues.

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the issue of Zurich’s limit of liability, and that the $1 million liability limit applied separately

to each plaintiff. Zurich filed a response and cross-motion for summary judgment arguing that

Iowa law should apply and, in the alternative, that under either Iowa or Mississippi law all of

the plaintiffs’ claims arose from a single “accident.”

¶6. In May 2003, after a hearing on the motion for summary judgment, the circuit court

held that Mississippi law controlled, but reserved ruling on the issue of the number of

accidents involved, to give the parties additional opportunity to be heard. The order read, in

pertinent part:

As to the choice of law question, the Court finds that Mississippi law
applies. Because all plaintiffs are Mississippi residents, the accident occurred
in Mississippi, and since it was foreseeable to Zurich that its insured would be
involved in accidents along Mississippi highways, the Court finds that
Mississippi law applies to this declaratory judgment action for reasons of public
policy and under the “center of gravity test”.

In October 2003, the circuit court entered three substantially identical orders granting

summary judgment to the plaintiffs, overruling Zurich’s cross-motion for summary judgment,

and directing entry of final judgment pursuant to M.R.C.P. 54(b). In these orders the court

held:

1) Mississippi law should be applied in the construction of the insurance policy
in question by reason of the “center of gravity test” and as a matter of public
policy;

2) that the policy is ambiguous with regard to the phrase “accident or loss”; and

3) the Court views the occurrence of June 20, 2002 from the viewpoint of the
injured parties, and from such viewpoint there were eight (8) accidents with $1
million coverage for each accident, or stated differently, $1 million in liability
coverage per vehicle struck by the Westside Transport, Inc./insured vehicle.

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It appears the circuit court’s analysis substituted one typical of personal jurisdiction. We have

previously cautioned against this error. Choice of law analysis is entirely different from that

of minimum contacts. Choice of law does not depend upon minimization of contacts, but

rather upon maximization of contacts. Even though a defendant may have availed itself of

Mississippi so that personal jurisdiction is proper, it does not necessitate the application of

Mississippi law. Zurich appeals from these orders, asking this Court to hold that the circuit

court erred in each of its three holdings. We hold the trial court erred in its determination that

Mississippi law applied and remand for further proceedings consistent with this opinion.

ANALYSIS

¶7. This Court reviews de novo the granting or denying of a summary judgment. Monsanto

Co. v. Hall, 912 So. 2d 134, 136 (Miss. 2005). The burden of demonstrating no genuine issue

of fact exists is on the moving party. McCullough v. Cook, 679 So. 2d 627, 630 (Miss. 1996).

If, in this view, there is no genuine issue of material fact and the moving party is entitled to

judgment as a matter of law, summary judgment should be entered in that party's favor.

Monsanto, 912 So. 2d at 136. The party opposing the motion must be diligent and may not rest

upon allegations or denials in the pleadings but must set forth specific facts showing a genuine

issue for trial. Richmond v. Benchmark Constr. Corp., 692 So. 2d 60, 61 (Miss. 1997).

I. CHOICE OF LAW

¶8. Choice of law analysis arises only when there is a true conflict between the laws of two

states, each having an interest in the litigation. Boardman v. United Servs. Auto. Ass’n, 470

So. 2d 1024, 1038 (Miss. 1985). In this case there is a true conflict between the law of Iowa

5
and Mississippi. Under Iowa law the court will determine whether an event was an “accident”

by viewing the event from the perspective of the insured. Am. Family Mut. Ins. Co. v.

Petersen, 679 N.W.2d 571, 579-81 (Iowa 2004); Farm & City Ins. Co. v. Potter, 330 N.W.2d

263, 265 (Iowa 1983). Under Mississippi law, unless the policy specifically states that it is

viewed from the perspective of the insured, it will be viewed from the perspective of the

injured. Allstate Ins. Co. v. Moulton, 464 So. 2d 507, 510 (Miss. 1985); Georgia Cas. Co.

v. Alden Mills, 156 Miss. 853, 853, 127 So. 555, 557 (1930).

¶9. Choice of law analysis involves a multi-step process. First it must be determined

whether the conflicting laws are substantive or procedural. Regardless of the substantive law

to be applied, Mississippi courts will apply their own procedural law. Ford v. State Farm Ins.

Co., 625 So. 2d 792, 793 (Miss. 1993). However, few laws are classified as procedural. In

addition to the Mississippi Rules of Civil Procedure, and Rules of Evidence, we have only

found the definition of “procedural” to include statutes of limitations, awards of attorney’s

fees and awards of prejudgment interest. Sentinel Indus. Contracting Corp. v. Kimmins

Indus. Serv. Corp., 743 So. 2d 954, 960 (Miss. 1999)(finding awards of attorney’s fees and

prejudgment interest procedural); Ford, 625 So. 2d at 793-794 (finding statutes of limitations

procedural). The present case does not deal with any of those; rather it deals with contract

construction, and we have held that contract construction is substantive. Boardman, 470 So.

2d at 1039. As a result, this appeal is resolved under the Restatement (Second) of Conflict of

Laws (Restatement).

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¶10. In determining which State’s law to apply, Mississippi relies on the “center of gravity”

doctrine of the Restatement. Mitchell v. Craft, 211 So. 2d 509, 510 (Miss. 1968). In

Mitchell this Court described the center of gravity doctrine:

This doctrine is a rule whereby the court trying the action applies the law of the
place which has the most significant relationship to the event and parties or
which, because of the relationship or contact with the event and parties, has the
greatest concern with the specific issues with respect to the liabilities and rights
of the parties to the litigation.

Id. at 514-15 (citing Craig v. Columbus Compress & Warehouse Co., 210 So. 2d 645, 648-

49 (Miss. 1968)).

¶11. The second step in choice of law analysis is to classify the substantive area of law. Each

area of law, whether tort, property or contract, has its own analytical provisions. Because the

present case is capable of sounding both in tort and contract, a classification of one or the

other could result in a different conclusion. In Boardman we determined that in actions

interpreting contract provisions which arise from a tort committed by one of the parties, the

appropriate classification is under contract. Boardman, 470 So.2d at 1039.

¶12. For analysis under contract, the Restatement supplies both general and specific

provisions. However, the drafters of the Restatement did not explicitly state whether analysis

should begin with the general or specific provisions. In Boardman we held the drafters

intended the specific provisions of sections 188 and 193 to be guiding and the general

provisions of section 6 to have secondary importance. Id. at 1032.2 This holding is backed by

2
The federal courts have commented that this Court favors the application of the
specific provisions of the Restatement and, only after determining which state has the most
significant interest in the subject matter of the litigation, uses section 6 to balance state
policy interests. Dees v. Hallum, 721 F. Supp. 789, 791 n.3 (N.D. Miss. 1989). This

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Comment c to section 6 and Comment b to section 188 which state that one should look to

section 6 to find the underlying principles or guideposts.

¶13. The third step, which is the heart of the analysis, begins by turning to the contract-

specific provisions of the Restatement. Two controlling sections of the Restatement have

been adopted in Mississippi – section 188 governing contracts in general and section 193

governing casualty insurance contracts. Id. at 1032-33. The plaintiffs argue section 193 is

controlling because the insured risk, the truck, was in Mississippi and Zurich could have

foreseen its exposure to liability in states other than Iowa. Section 193 states:

The validity of a contract of fire, surety or casualty insurance and the rights
created thereby are determined by the local law of the state which the parties
understood was to be the principal location of the insured risk during the term
of the policy, unless with respect to the particular issue, some other state has
a more significant relationship under the principles stated in § 6 to the
transaction and the parties, in which event the local law of the other state will
apply.

Restatement (Second) of Conflicts of Laws § 193 (1971) (emphasis added). For several

reasons, we find section 193 cannot be applied. The primary question here, like the question

in Boardman, is one of coverage. The location of the risk is irrelevant for considerations of

the question of coverage. As a result, the issue invokes the exception to the rule. Boardman,

470 So. 2d at 1033-34.

¶14. The lynchpin of section 193 is that the parties must be able to identify a principal

location of the risk. That cannot be done in the present case. Comments a, b, and d to section

creates a de facto presumption of the appropriate law which can be rebutted by application
of the principles of section 6. Allison v. ITE Imperial Corp., 928 F.2d 137, 143 (5th Cir.
1991). The Fifth Circuit has gone so far as to say that, subsequent to Mitchell, this Court
has “given little, if any, actual weight to the policy considerations in § 6.” Id. at 141.

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193 provide guidance. The insurance policy covered West Side’s entire fleet and not just the

one truck driven by McCrary. Therefore it is difficult to determine a principal location of the

risk because the risk is so diffuse. Comment a to section 193 states:

There may be no principal location of the insured risk in the case of contracts
for the insurance of things, such as ships, trucks, airplanes and railroad cars, that
are constantly on the move from state to state. In such a case, the location of
the risk can play little role in the determination of the applicable law. The law
governing insurance contracts of this latter sort must be determined in
accordance with the principles set forth in the rule of § 188.

Restatement (Second) of Conflict of Laws § 193 cmt. a (1971) (emphasis added). Section 193

was drafted to deal with immovables and chattel whose location remained geographically

localized. Boardman, 470 So. 2d at 1033. The plaintiffs argue that under Comment d the

drafters of the Restatement foresaw this problem and provided a mechanism of transferring

the principal location of the insured risk after the creation of the insurance contract. Put

another way, a principal location of the risk can be moved from place-to-place after the

creation of the contract, allowing courts to apply substantive law that is different than the

contract parties’ understanding, but only if it was originally foreseeable.

¶15. The Court of Appeals has agreed with that argument, but we find application to the

present set of facts inappropriate. See Baites v. State Farm Mut. Auto. Ins. Co., 733 So. 2d

320, 323 (Miss. Ct. App. 1998). In Baites the Court of Appeals held the principal location of

the risk shifted to Mississippi, but held that Mississippi law would not apply because the shift

was not foreseeable because of the insured’s deception. Id. at 323-24. Key in Baites was that

the risk, an automobile, had been present in Mississippi for months preceding the incident. We

find this analysis correct and adopt the holding of the Court of Appeals in Baites that it is

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possible for the principal location of a risk to change but only if a substantial period of time

has elapsed and it was both prospectively foreseeable and concurrently visible to the insurer.

In the present case it is not clear how long West Side’s truck had been in Mississippi.

However McCrary, the driver of the truck, was a resident of Alabama, and he was on a stretch

of interstate which connects Alabama and Mississippi in a county on the border between the

two states.

¶16. The truck driven by McCrary was not the only risk that Zurich insured for West Side.

West Side had a large fleet which was insured by Zurich. Zurich has stated, and the plaintiffs

have not contradicted, that West Side’s principal location of business was at all times in Iowa,

but that its trucks did engage in interstate travel to serve its corporate business. As a result,

these trucks were scattered and constantly on the move. Because of this, we find that

Comment b controls and thus section 193 does not apply. Comment b states:

The location of the insured risk will be given greater weight than any other
single contact in determining the state of the applicable law provided that the
risk can be located, at least principally, in a single state. Situations where
this cannot be done, and where the location of the risk has less significance,
include (1) where the insured object will be more or less constantly on the
move from state to state during the term of the policy and (2) where the
policy covers a group of risks that are scattered through two or more states.

Restatement (Second) of Conflict of Laws § 193 cmt. b (1971) (emphasis added).

¶17. Because section 193 does not apply, the determination must be made under section

188. Section 188 in relevant parts states:

(2) In the absence of an effective choice of law by the parties (see § 187), the
contacts to be taken into account in applying the principles of § 6 to determine
the law applicable to an issue include:

(a) the place of contracting,

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 (b) the place of negotiation of the contract,

(c) the place of performance,

(d) the location of the subject matter of the contract, and

(e) the domicile, residence, nationality, place of incorporation and place of
business of the parties.

These contacts are to be evaluated according to their relative importance with
respect to the particular issue.

(3) If the place of negotiating the contract and the place of performance are in
the same state, the local law of this state will usually be applied, except as
otherwise provided in §§ 189-199 and 203.

Restatement (Second) of Conflict of Laws § 188 (2)-(3) (1971) (emphasis added). This Court

does not apply the principles of section 188 mathematically; rather, it balances them to find

a practical application. Boardman, 470 So. 2d at 1034.3 It is undisputed the place of

contracting and the place of negotiation were both in Iowa. The plaintiffs assert that the place

of performance will be in Mississippi because that is where Zurich will pay the proceeds of

the policy. However, we find the place of performance is in Iowa. All the relevant activities

between the parties take place in Iowa. They conduct business with each other in Iowa. All

payments of premiums are made in Iowa. Any action taken on the insurance contract will likely

be settled between the parties in Iowa. That Mississippians receive the benefit of proceeds

3
In Association of Trial Lawyers Assurance v. Tsai, 879 So.2d 1024, 1028 (Miss.
2004), we held that “because the insurance policy in question involves questions of
interpretation of the policy,” the state of issuance (Illinois) of the policy governs. No
further analysis was given. The result of this holding was correct, but the reasoning was
incorrect. Illinois law applied not because that was where the contract was issued but
because the parties included a choice of law provision in their contract making such
analysis unnecessary. We make it clear today that the place a contract was issued is
irrelevant in choice of law cases, and the reasoning in Tsai was incorrect.

11
paid in Iowa is incidental to the action, and it is only fortuitous that Mississippi courts are even

involved.

¶18. It is undisputed that West Side’s primary place of operation is Iowa. The bulk of its

equipment, capital and manpower are in Iowa. Therefore, it stands to reason that the location

of the subject matter of the contract is in Iowa. While it has been admitted that West Side

operates outside of Iowa, there is no indication that these activities take place with any

frequency in Mississippi, and even if they do, the frequency is much less than in Iowa. Lastly,

the domicile of the parties to the contract are in Iowa, Illinois and New York, not in

Mississippi. Subsection e speaks in terms of the parties to the contract, not those who may

become unintended beneficiaries. These factors point toward application of Iowa law.

Therefore, we hold that under section 188 Iowa law should apply.

¶19. As mentioned supra, this Court has interpreted section 188 as creating a presumption

that can be rebutted by weighing the relative interests of the forum and other interested states

under section 6. The relevant parts of section 6 state:

(1) A court, subject to constitutional restrictions, will follow a statutory
directive of its own state on choice of law.

(2) When there is no such directive, the factors relevant to the choice of the
applicable rule of law include:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of
those states in the determination of the particular issue,

(d) the protection of justified expectations,

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 (e) the basic policies underlying the particular field of law,

(f) certainty, predictability and uniformity of result, and

(g) ease in the determination and application of the law to be applied.

Restatement (Second) of Conflict of Laws § 6 (1)-(2) (1971) (emphasis added). The plaintiffs

contend Mississippi has a greater interest in this case than does Iowa because Mississippi

plaintiffs will be affected by the outcome. Further, the plaintiffs assert that Zurich has

consented to the application of Mississippi law by originally filing a federal interpleader action

in Mississippi federal court. However, these factors do not rebut the presumption that the

“center of gravity” in this litigation is in Iowa. We have held that the fact that a cause of action

arose in Mississippi and that Mississippians are involved does not in itself generate an interest

in Mississippi that is superior to that of another state. Owens v. Miss. Farm Bureau Cas. Ins.

Co., 910 So. 2d 1065, 1072 (Miss. 2005); O’Rourke v. Colonial Ins. Co., 627 So. 2d 84, 87

(Miss. 1993). The focus must be placed on the state of real interest, which in this case is Iowa.

See McDaniel, 556 So.2d at 311. These are Iowa parties, an Iowa transaction, and an Iowa

contract. The interest of Iowa in the regulation of its businesses and contracts is superior to

that of Mississippi even if it means that Mississippians receive less compensation for their

injuries. See generally O’Rourke, 627 So. 2d at 87. The occurrence of the accident in

Mississippi and injury to Mississippians is fortuitous because they arise from an incident

which is not specifically relevant to the true dispute. Boardman, 470 So. 2d at 1032; Allison,

928 F.2d at 141(citing Davis v. Nat’l Gypsum Co., 743 F.2d 1132 (5th Cir. 1984)).

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¶20. The trial court found Mississippi public policy prevents application of Iowa law. The

plaintiffs raise two public policy arguments: (1) protection of Mississippi plaintiffs, and (2)

application of Iowa law violates the settled rule in Mississippi of viewing the term “accident”

based on its “effect” and not on its “cause”. We find the plaintiffs’ arguments without merit.

¶21. Courts of this state will not give effect to the substantive law of another state if to do

so would be “offensive to the deeply ingrained or strongly felt public policy of the state.”

Boardman, 470 So. 2d at 1038. Every piece of legislation enacted by the Legislature is a

reflection of the public policy of Mississippi. This Court recognizes that the laws of other

states sometimes conflict with Mississippi law. Conflict between the law of our state and

another state does not itself mean that the foreign law is so offensive that it must be set aside.

Id.

¶22. We have found only two examples of another state’s law which were offensive to

Mississippi’s deeply ingrained public policy. The first involved application of Louisiana’s

contributory negligence statute as opposed to Mississippi’s comparative negligence statute

when it would have barred recovery to a Mississippi plaintiff. Mitchell, 211 So. 2d at 514.

The second involved application of Louisiana law to allow a widow and child to sue a deceased

in tort. McNeal v. Administrator of McNeal’s Estate, 254 So. 2d 521, 524 (Miss. 1971)

(abrogated by Burns v. Burns, 518 So. 2d 1205 (Miss. 1988)). We have declined to find

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offensive differences in highway safety regulations,4 guest statutes,5 and real property laws.6

¶23. The under-compensation of injured Mississippi plaintiffs is a serious concern.

Nevertheless, it does not rise to the same level as does the complete, albeit sometimes

arbitrary, bar of contributory negligence. The public policy, of adequate compensation to

injured motorists is not strong enough to override the contracting parties’ expectations of

which state’s substantive law will apply. Baites, 733 So.2d at 324.

II. “ACCIDENT” UNDER IOWA LAW

¶24. Under Iowa law, the construction and interpretation of an insurance policy is a question

of law reviewed by this Court de novo. Am. Family Mut. Ins. Co. v. Petersen, 679 N.W.2d

571, 575 (Iowa 2004); Iowa Comp. Petroleum Underground Storage Tank Fund Bd. v.

Farmland Mut. Ins. Co., 568 N.W.2d 815, 817 (Iowa 1997).

¶25. “The controlling consideration in interpreting insurance policies is the intent of the

parties.” Interstate Power Co. v. Ins. Co. of North America, 603 N.W.2d 751, 754 (Iowa

1999); see generally, Hofco, Inc. v. Nat’l Union Fire Ins. Co., 482 N.W.2d 397 (Iowa 1992).

To determine the parties’ intent, the court looks to the language of the policy itself. Farmland

Mut. Ins. Co., 568 N.W.2d at 818. The court looks at the context of the provisions within the

4
Fells v. Bowman, 274 So. 2d 109 (Miss. 1973).
5
Vick v. Cochran, 316 So. 2d 242 (Miss. 1975).

6
Spragins v. Louise Plantation, Inc., 391 So. 2d 97 (Miss. 1980).

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entire policy not just the specific provisions. Kibbee v. State Farm Fire & Cas. Co., 525

N.W.2d 866, 868 (Iowa 1994). When the language of the policy does not define the provision,

the court will use its ordinary meaning. Farmland Mut. Ins. Co., 568 N.W.2d at 818. This

is the meaning which a reasonable person would understand the policy to have. Hofco, 482

N.W.2d at 401. The understanding given to specific provisions is done only in conjunction

with the purpose of the entire insurance policy. Hein v. Am. Family Mut. Ins. Co., 166

N.W.2d 363, 369 (Iowa 1969).

¶26. If, after the application of these rules, a policy is subject to two reasonable

interpretations it is ambiguous. Farmland Mut. Ins. Co., 568 N.W.2d at 818. Ambiguity must

be objectively present and not the result of a disagreement between the parties. Kibbee, 525

N.W.2d at 868. A provision is not ambiguous merely because it can possibly be defined in

more than two ways. Farmland Mut. Ins. Co., 568 N.W.2d at 818 (citing New Castle County

v. Hartford Acc. & Indem. Co., 933 F.2d 1162, 1193 (3d Cir. 1991), (existence of more than

one dictionary definition is not the sine qua non of ambiguity; otherwise, few words would be

unambiguous). A court should not strain the definition of provisions to find ambiguity in

places where it does not exist. Courts should not give meaning to policy provisions which

either extend or restrict coverage beyond what was intended. Hein, 166 N.W.2d at 366. This

means that unless ambiguity is genuine, the court should interpret the policy as written,

including applicable limitations and exceptions to coverage. Id. If ambiguity is genuine, then

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the policy should be interpreted strictly against the insurer in favor of the insured. Farmland

Mut. Ins. Co., 568 N.W.2d at 818.

¶27. There are three provisions in the policy that are applicable to the present case. The first

states Zurich’s coverage:

Regardless of the number of covered “autos”, “insureds”, premiums paid, claims
made or vehicles involved in the “accident”, the most we will pay for the total
of all damages and “covered pollution cost or expense” combined, resulting
from any one “accident” is the Limit of Insurance for Liability Coverage shown
in the Declarations.7

The second provision states Zurich’s limit of liability is $ 1 million for all injuries and

damages arising out of any one “accident”. The third provision defines the term “accident”, and

it is this definition which gives rise to this litigation. The policy defines the term “accident”

as:

All “bodily injury”, “property damage” and “covered pollution cost or expense”
resulting from continuous or repeated exposure to substantially the same
conditions. . . .

The parties’ sole claim of ambiguity is from whose perspective to view the term “accident”.

¶28. There is no uniform approach under Iowa law in choosing from whose perspective to

view a policy. Petersen, 679 N.W.2d at 581. The Iowa Supreme Court has declared it is futile

to create an all-inclusive definition of “accident”; rather it should be defined in the context of

the policy in which it is used. Central Bearings Co. v. Wolverine Ins. Co., 179 N.W.2d 443,

448 (Iowa 1970). The most relevant approaches are the perspective of the insured or the

7
Quotation marks were used in this manner throughout the policy.

17
injured party. If viewed from the perspective of the insured, the event will be looked at as to

its “cause” by the tortfeasor. Then all the collisions will be considered part of the same

“accident” because they were the result of one continuing “cause”. If viewed from the

perspective of the injured party, the court will look to the “effect”on the injured party. Then

the collisions will be considered part of different “accidents” because as to each injured party,

it was not a continuing event but new and independent.

¶29. The plaintiffs argue that Iowa is an “effect” state. In support of their argument they

point to three decisions of the Iowa Supreme Court. The plaintiffs contend that in Potter,

Central Bearings and Petersen, the Iowa Supreme Court creates a focus not on the negligence

that causes the injury but rather on the resultant injuries, or in other words the “effect”. In

Central Bearings the Iowa Supreme Court analyzed the term “accident” in a products-liability

case and not an automobile collision. Central Bearings, 179 N.W.2d at 447-48. As a result

Central Bearings is distinguishable from the present case.

¶30. We find Potter and Petersen controlling, but the plaintiffs’ analysis incorrect. Potter

lays out the perspective for courts to adopt when confronted with liability insurance contracts:

At the outset we should note that this insurance contract is a liability policy
which insures the tortfeasor, not the victim. Thus, whatever constituted an
accident– absent policy language to the contrary– should be decided from the
viewpoint of the tortfeasor.

Potter, 330 N.W.2d at 265. In Potter, the insured accidentally injured a third party, after

intentionally severing the brake line in her own car. The court reasoned it was an accident,

despite her intentional actions, because her sole intent was to injure herself and not others.

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Viewed from her (the insured’s) perspective, the collision with another driver was an accident

because it was not intended.

¶31. In Petersen, an uninsured motorist case, the court laid out a distinction and rationale

for viewing liability insurance contracts from the perspective of the insured. Petersen, 679

N.W.2d at 581. Even though the court in Petersen adopts the “effect” perspective, the

rationale is instructive:

The rationale for our general tendency to view an accident from the viewpoint
of the tortfeasor in the case of a liability policy is found in the fact that liability
policies provide insurance for the tortfeasor, not the victim. To the contrary,
UM (uninsured motorist) coverage provides insurance to the victim, not the
tortfeasor.

Id. The purpose of the uninsured motorist statute is to ensure minimum compensation for an

injured victim, and therefore alters the underlying intent of the parties. Id. at 578-79.

Uninsured motorist coverage is first-party coverage and provides no benefit to the tortfeasor;

rather, the tortfeasor remains liable for reimbursement to the insurance company providing

compensation. Id. at 578. A liability policy provides third-party coverage, which serves to

indemnify the insured against the injured third party. In both cases the party from whose

perspective the court is viewing the event is the “truly” insured party. Id. at 581. That is the

party who will be covered by the insurance company.

¶32. We find that under Iowa law, the lack of the phrase “from the insured’s perspective”

does not make a provision ambiguous. Under Iowa law, the court will customarily view the

provisions of a liability policy from the perspective of the insured party. Under this view, the

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events of June 20, 2002, were the result of one continuing exposure. The actions of driver

McCrary set in motion a chain reaction, which resulted in injuries from exposure to

substantially the same condition. Under the definition in the Truckers Policy, this means that

the separate collisions were part of one “accident.”

CONCLUSION

¶33. We hold that the trial court erred in applying Mississippi law to the Zurich contract.

Therefore, we reverse the trial court’s decision and remand this case to the Covington County

Circuit Court with instructions to apply Iowa law to the meaning of “accident.” Viewed from

the perspective of the insured, West Side, the entire series of collisions consisted of only one

“accident”. Therefore, the limit of Zurich’s liability is $ 1 million.

¶34. REVERSED AND REMANDED.

SMITH, C.J., WALLER, P.J., CARLSON AND DICKINSON, JJ., CONCUR.
EASLEY AND GRAVES, JJ., DISSENT WITHOUT SEPARATE WRITTEN OPINION.
DIAZ AND RANDOLPH, JJ., NOT PARTICIPATING.

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