In its recent decision in Fellowship of Christian Athletes v. AXIS Ins. Co., 2014 U.S. App. LEXIS 13176 (8th Cir. July 11, 2014), the United States Court of Appeals for the Eighth Circuit, applying Missouri law, had occasion to consider whether an incident involving two fatalities happening at or about the same time should be considered one or two occurrences for the purpose of a general liability policy.
The Fellowship of Christian Athletes decision involved the tragic drowning of two children at a summer camp run by the Fellowship of Christian Athletes (“FCA”). The children’s bodies were discovered at the same time, lying side-by-side at the bottom of the deep end of the camp’s swimming pool. Autopsy reports concluded that the boys died within two minutes of each other. Lawsuits were brought by the families of the children, both of which alleged various theories of negligence against FCA.
FCA had primary general liability through AXIS with limits of liability of $1 million per occurrence and $5 million in the aggregate. FCA also had two layers of umbrella coverage in excess of the AXIS policy: a $10 million first-layer umbrella policy issued by Ironshore and a $5 million second-layer umbrella policy issued by RSUI. On motion for summary judgment, the United States District Court for the Western District of Missouri held that the underlying incident constituted a single occurrence, thereby limiting AXIS’ exposure to $1 million and triggering the Ironshore policy for all amounts in excess of $1 million.
On appeal, Ironshore argued that there were two occurrences, and that as such, AXIS’ liability extended to the first $2 million awarded in the underlying suits. In support of its argument, Ironshore maintained that under Missouri’s “cause approach” to determining number of occurrence questions, which looks to the single act from which all claims flow, there is a requirement that the “accidents occur simultaneously or almost simultaneously” in order to constitute a single occurrence, and that to be considered “almost simultaneous,” the occurrences must happen within a few seconds of each other. Ironshore, therefore, asserted that the two deaths, which happened within minutes of each other, could not be considered “almost simultaneous,” and thus were legally two separate occurrences.
Relying on Missouri case law, primarily the decision by the Missouri Court of Appeals in Kansas Fire & Casualty Co. v. Koelling, 729 S.W.2d 251 (Mo. Ct. App. 1987), the court rejected Ironshore’s number of occurrence position, finding no support under Missouri case law for the “time and space” analysis for which Ironshore advocated. Such a test, explained the court, would improperly “focus on the effect of the insured’s negligent act or acts—not the cause or causes of the injuries—and arbitrarily require that the injuries occur within seconds of each other to be considered a single occurrence.” Rather, the court agreed that under Missouri law, multiple occurrences will be found only when an intervening act causes the second claim.”
Having rejected Ironshore’s “time and space” test, the court affirmed the lower court’s ruling that the underlying drownings involved a single occurrence. In so concluding, the court rejected the assertion that deaths involved negligence committed by multiple FCA employees and thus constituted multiple occurrences. Rather, the court found that:
Here, FCA is the insured entity and the alleged tortfeasor, and thus we consider its conduct. The underlying litigation alleges that the FCA was negligent in allowing [the children] to attend the pool party while knowing that the boys could not swim and in failing to properly train and supervise the camp counselors. Moreover, it is undisputed that the boys arrived at the Pella Aquatic Center at the same time, swam in the pool during the same one-hour period, and were discovered at the bottom of the pool at the same time. Accordingly, the FCA’s alleged negligent conduct constituted one occurrence under the Axis policy because the underlying lawsuit alleges that the drownings were caused by “exposure to substantially the same general harmful conditions.”