725 S.E.2d 532 (Va. 2012)
In 1996 to 2000 and again from 2003 to 2008, The AES Corporation, a Virginia-based energy company, purchased commercial general liability policies from Steadfast Insurance Company, an Illinois-based insurer.1
In February 2008, the Native Village of Kivalina and the City of Kivalina filed a complaint in the United States District Court for the Northern District of California against AES and other energy companies.2 The complaint alleged that AES intentionally emitted millions of tons of carbon dioxide and other greenhouse gases annually as part of its electricity-generating operations.3 This contributed to global warming that caused erosion damaging the village located on an Alaskan barrier island.4
AES requested defense and coverage from Steadfast under the policies for the Kivalina claims. Steadfast provided a defense subject to a reservation of rights and filed a declaratory judgment action in the Circuit Court of Arlington County, Virginia.5 The parties filed cross-motions for summary judgment, both relying on the eight corners of the complaint and the policies to determine coverage.6
The circuit court denied AES's motion and granted Steadfast's motion for summary judgment.7 AES appealed to the Supreme Court of Virginia, which granted review on the assignment of error challenging the ruling that the complaint did not allege an occurrence covered by the policies.8 A prior opinion issued in September 2011 was withdrawn after rehearing.9
Whether the civil complaint filed against The AES Corporation alleged an "occurrence" as that term is defined in its contracts of insurance with Steadfast Insurance Company?10
The policies provide coverage for damage caused by an occurrence, defined as an accident including continuous or repeated exposure to substantially the same general harmful condition.11 An accident is an event which creates an effect that is not the natural or probable consequence of the means employed and is not intended, designed, or reasonably anticipated.12 An intentional act is neither an occurrence nor an accident, and if the result is the natural or probable consequence of an insured's intentional act, it is not an accident.13
No. The Kivalina complaint alleges that AES intentionally emitted millions of tons of carbon dioxide and other greenhouse gases into the atmosphere as a regular part of its energy-producing activities.14 The complaint further alleges a clear scientific consensus that global warming and the resulting damage to the village are the natural and probable consequences of such emissions.15 The complaint includes language that AES acted intentionally or negligently.16 It states that AES knew or should have known of the impacts.17
These allegations do not support a claim of an accident. The gravamen of the nuisance claims is that the damages were the natural and probable consequences of AES's intentional emissions.18
The complaint did not allege an occurrence covered by the policies, so Steadfast had no duty to defend or indemnify AES.19
Related opinions on this issue
Justice Mims concurred in the judgment but wrote separately to emphasize that the result follows from longstanding precedents while warning of broader implications.20 He observed that the definition of accident as an event not the natural or probable consequence of the means employed creates a dichotomy with negligence. Negligence requires proof that the injury was the natural and probable consequence of the breach.21 Mims explained that under this reasoning allegations of negligence and allegations of accident must be mutually exclusive.22
He noted that the distinction from Parker v. Hartford Fire Insurance Co. arises from the nature of the underlying tort claims rather than policy language.23 He acknowledged that the court's approach may affect the coverage provided by the vast majority of occurrence-based CGL policies.24