PICKETT, Circuit Judge.
The American Employers Insurance Company issued to plaintiff, Albuquerque Gravel Products Company, an insurance policy in which it agreed:
Actions were brought against the insured in the New Mexico State courts by various persons, alleging that damages had resulted from insured's negligent construction of a loading ramp across the natural water course of Hahn arroyo in northeastern Albuquerque, New Mexico, which diverted the flow of water onto adjoining premises, causing the damages complained of. The insurance company refused the insured's request to defend the actions upon the ground that the allegations of the various complaints did not bring the actions within the coverage of the policy.
The insured operated a ready mixed concrete business and its plant was located in the northeastern section of the City of Albuquerque, New Mexico. Adjoining the plant was an arroyo,
The terms of the insured's policy fix the right of recovery. Imperial Fire Ins. Co. v. Coos County, 151 U.S. 452, 14 S.Ct. 379, 38 L.Ed. 231. It is a general rule that the duty of the insurer to defend an action against an insured is to be determined from the allegations of the complaint, Lee v. Aetna Casualty & Surety Co., 2 Cir., 178 F.2d 750; Annotation 51 A.L.R.2d 461, unless the insurer knows that the true, but unpleaded, factual basis for the claims brings them within the coverage of the policy.
The term "accident" as used in insurance policies, is usually defined as "an undesigned, sudden, and unexpected event, usually of an afflictive or unfortunate character, and often accompanied by a manifestation of force * * *." Neale Construction Co. v. United States Fidelity & Guar. Co., 10 Cir., 199 F.2d 591, 593. In Midland Const. Co. v. United States Cas. Co., 10 Cir., 214 F.2d 665, 666, we said:
See also Hutchinson Water Co. v. United States Fidelity & Guar. Co., 10 Cir., 250 F.2d 892; United States Fidelity & Guar. Co. v. Briscoe, 205 Okl. 618, 239 P.2d 754; Webb v. New Mexico Publishing
The evidence discloses that during any summer season the arroyos and canyons adjacent to the mountains east of Albuquerque are subject to flooding conditions of varying degrees of volume, intensity and velocity. The district court said: "It is well known that what may be a dry arroyo in the morning may be a raging torrent in the afternoon of the same day." It was found that the flooding described in the complaints was not "unprecedented, unpredictable or unforeseeable, or beyond the ordinary experience of man," and "persons resident or doing business within the vicinity of the arroyos should anticipate that the floods will occur and that they may diminish or increase in volume and intensity, depending only upon the uncertain vagaries of nature."
Clearly the gravaman of the state court action was the insured's negligence in constructing and maintaining the loading ramp across the arroyo which retarded and diverted the natural flow of water. We said in Neale Construction Co. v. United States Fidelity & Guar. Co., supra, 199 F.2d at page 593, — "The natural and ordinary consequences of a negligent act do not constitute an accident." As we pointed out in Hutchinson Water Co. v. United States Fidelity & Guar. Co.,
The evidence establishes without conflict that throughout the past generations floods of varying degrees have occurred during almost every summer in the usually dry arroyos east of Albuquerque. Although the rains were heavier and more frequent than usual during the summer of 1955, and the flooding was more extensive, we cannot say as a matter of law that the floods were accidental rather than the normal consequence of heavy rains which were foreseeable by a prudent person. Consequently, assuming negligence in the construction of the ramp, the results of the floods were not accidental. C. Y. Thomason Co. v. Lumbermans Mutual Casualty Co., 4 Cir., 183 F.2d 729; United States Fidelity & Guar. Co. v. Briscoe, 205 Okl. 618, 239 P.2d 754.
"2. The plaintiffs are credibly informed and believe and therefore allege that the defendant built and used a loading ramp near the Atchison Topeka & Santa Fe Railway Company tracks and Pleasant Drive in or near Albuquerque, New Mexico. That such ramp was negligently built and maintained across a natural water course or arroyo, known as the Hahn arroyo.
3. The defendant negligently constructed and maintained said ramp in the bed of said Hahn arroyo, which said ramp dammed or retarded the natural flow of water in said arroyo and caused the water flowing down said arroyo to be diverted onto the lands of the plaintiffs.
4. Defendant knew or in the exercise of reasonable care should have known that the said ramp so constructed and maintained by it in said arroyo would prevent the flow of water in said arroyo from following a course down said arroyo, as it had done for many years prior to the construction of said ramp, but would back up and retard said water and cause the same to be diverted to and upon the plaintiffs' lands."
"Apparently we did not contemplate whither this logic would lead us. For, if the policy did not cover the loss because the natural and probable consequences of the negligent act did not constitute an accident, then by the same logic, there would be no liability where the damage was the unexpected, hence unforeseen result of the negligent act. In the first instance, the damage would be foreseeable and therefore not accidental; in the latter instance, the damage would not be foreseeable and hence no liability upon the insured for his negligent acts. In either instance, the insurer would be free of coverage and the policy would be rendered meaningless."