Number of Occurrences in Dispute
The insurer appeals from the trial court's grant of summary judgment in favor of parents of two children who drowned in a swimming pool. The insurer argued that the trial court erred in determining that there were two occurrences in this incident. This case is Austin Mutual Insurance Company v. Aldecoa, 2011 WL 4794936 (Ariz.App. Div.2). (Note that at this time only the Westlaw citation is available.)
Two children drowned in their grandparents' swimming pool. On the day before the drowning, the grandmother left the gate to the pool unlatched and unlocked. On the day of the drowning, while the grandmother was resting, the grandfather left the children in a room and went to watch TV and left the exterior sliding glass door open and the screen unlocked. The children then left the house through the unlocked door, entered the pool area, and drowned.
Aldecoa and his wife brought an action for wrongful death against the grandparents. The grandparents had a homeowners policy with Austin Mutual, and the insurer agreed to pay the policy limits to settle the claim. However, Austin took the position that the policy limit was $500,000 because there was only one occurrence under the terms of the policy. The parents demanded a settlement on one million dollars, arguing that there were two occurrences covered by the policy. The insurer filed a declaratory judgment action to determine whether there was one occurrence or two in this loss. The trial court ruled in favor of Aldecoa and his wife; this appeal followed.
The appeals court said that, in determining the meaning of occurrence under the policy, its inquiry centers on whether there was but one proximate, uninterrupted, and continuing cause that resulted in all of the injuries and damages. The number of causative acts was the key for the court in determining the number of occurrences.
Austin interpreted “occurrence” to include a series of events that work together to cause harm and to exclude actions that would not in isolation cause injury. The court disagreed. The court said that Arizona case law does not permit this interpretation of one proximate, uninterrupted, and continuous cause. Multiple acts that cause a single injury constitute multiple occurrences under the law.
Austin also argued that the policy includes the phrase “repeated exposures to similar conditions” in the definition of occurrence to avoid the circumstance where acts or omissions could be broken down to an infinite number of occurrences. The insurer said that the acts of each grandparent merged into a single occurrence. The court found that the repeated exposure clause had no bearing on the meaning of occurrence as defined in the policy because the injury in this matter was not an incremental injury caused by repeated exposures to harm; the injury was essentially instantaneous. Moreover, the acts of the grandparents were of a different nature and could not reasonably constitute similar conditions.
The court ruled that in this case, the actions of each grandparent (leaving the pool gate unlocked and failing to supervise the children properly) constituted two causative acts and therefore, two occurrences. Each act was necessary to produce the injuries that otherwise would not have occurred. The actions were taken by separate actors on separate days, each presumably acting without actual knowledge of the other's act. Under these circumstances, the court could not conclude that the separate acts of the grandparents constituted one occurrence. The opinion of the trial court was affirmed.
Editor's Note: The Arizona Court of Appeals in determining that there were two occurrences in this tragedy analyzed causative acts and continuous exposure as those words pertain to “occurrence”. The court emphasized that the number of causative acts is the key to determining the number of occurrences, and the court saw two causative acts, one by the grandmother and one by the grandfather, neither of which would have alone caused the deaths of the grandchildren. As for continuous exposure, the acts of the grandparents were not one, uninterrupted, natural and continuous sequence leading to an incremental injury; they were separate and different acts that allowed the loss to occur rather instantaneously.