Illinois Court Denies Insurer Claim That Boys’ Deaths Were Single Event

The accidental deaths of two teenage boys at an excavation site in 1997 were separate occurrences under the liability insurance policy of the property owner, the Illinois Supreme Court has ruled in reinstating a $2 million judgment against the insurer.

In Addison Insurance Company v. Donna Fay, in a Jan. 23 opinion written by Justice Rita Garman, the high court found that there was not enough evidence to conclude that the deaths were close enough to be considered a single occurrence as Addison Insurance and the appellate court maintained.

On May 3, 1997, the boys’ bodies were found in an excavation pit on land belonging to Donald Parrish. At the time, Parrish operated a business from the property. Parrish was insured by the plaintiff, Addison Insurance Co.

The boys were found at the edge of the pool of water, trapped in wet clay and sand. The doctor who performed the autopsies concluded that the immediate cause of one boy’s death was hypothermia and the other boy’s was drowning secondary to hypothermia. Addison’s forensic expert concurred with those findings and neither of the physicians could conclude with any certainty the time of death of either boy, or how closely in time the boys had perished.

The families of the two boys initially brought suit against Parrish. As Parrish’s insurer, Addison agreed to settle the claims for an amount equal to the policy’s limits. However, the parties disputed which policy limit applied. Addison’s insurance policy with Parrish provided for a “General Aggregate Limit” of $2 million. The policy also contained an “Each Occurrence” limit of $1 million.

Addison brought a declaratory action to resolve whether the boys’ deaths constituted one or two occurrences, and therefore whether Addison was obligated to pay $1 million or $2 million to the defendants.

The trial court found that the injuries to the boys were the result of two occurrences. The court acknowledged that the evidence could be viewed in ways that could support both positions. However, the court found the evidence sufficient to show that the causes of death were different, and that the circumstances immediately prior to the deaths were different.

The appellate court reversed, concluding under what is called the “time and space” test that the boys’ deaths were “so closely linked in time and space as to be considered by a reasonable person as one occurrence.”

The Supreme Court has now overturned the appeals court, agreeing that the appellate court used the right test but finding that the facts did not support the conclusion that the deaths were “so closely linked in time and space as to be considered by a reasonable person as one occurrence.”

The court held that Addison bore the burden of proving that the deaths constituted one occurrence. Addison contended that the deaths were one occurrence because the cause of both boys’ injuries was Parrish’s sole negligent act of failing to properly secure and control his property.

The court agreed that Parrish’s liability arose from his negligently failing to properly secure and control his property and even that Parrish committed no intervening negligent act between the injuries of each boy. However, it found that Addison’s approach resulted in an “unreasonable interpretation” of Parrish’s insurance policy because focusing on the sole negligent omission of failing to secure the property would allow two injuries, days or even weeks apart, to be considered one occurrence.

“If several injuries suffered over the course of several weeks could be bundled into a single occurrence, the likelihood that damages would exceed a per-occurrence limit is significant, as demonstrated by the damages in the instant case. Purchasers of insurance such as Parrish would be left unprotected by their insurance policy, and liable for any amount above the per occurrence limit. In accepting a per-occurrence limit, Parrish could not have intended to expose himself to greater liability by allowing multiple injuries, sustained over an open-ended time period, to be subject to a single, per-occurrence limit.
As a result, in situations where a continuous negligent omission results in insurable injuries, some limiting principle must be applied,” the decision states.

The court applied the limiting principle or “time and space” test that the appellate court used but came to a different conclusion on the facts. The court found that there was not enough evidence to know whether he boys’ death were “simultaneous or so closely linked in time and space as to be considered by the average person as one event.”

Justice Garman concluded:

“[T]here is little evidence to support Addison’s claim that the injuries suffered by these two boys were the result of a single occurrence. The police investigators could not determine how closely in time the boys became trapped. They suggested it could have been seconds or minutes apart, but acknowledged that there was no way to know. Nor could the medical experts give a time of death with certainty, or indicate how closely in time the two boys had died. Any opinions on these issues of timing would be inappropriately speculative. The substantial uncertainty on this issue persuades us that Addison cannot meet its burden of proving that the two boys’ injuries were so closely linked in time and space as to be considered one event.

“Because Addison cannot meet its burden, we hold that the injuries to Carr and Hodgins constitute two occurrences. Therefore, defendants’ claims are subject to the general aggregate limit rather than the lower per-occurrence limit.”