10th Circuit Holds Food Poisoning Claims Arose Out of Single Occurrence

by Traub Lieberman Straus & Shrewsberry LLP

In its recent decision in Republic Underwriters Ins. Co. v. Moore, 2012 U.S. App. LEXIS 14907 (10th Cir.), the United States Court of Appeals for the Tenth Circuit, applying Oklahoma law, had occasion to consider whether numerous incidents of food poisoning was the result of a single occurrence or multiple occurrences.
The coverage dispute related to a ten-day period in 2008 during which the insured, The Country Cottage Restaurant, prepared and served E. coli-contaminated food, causing 341 persons becoming sickened, one of which resulted in a fatality. Notably, The Country Cottage prepared and served a portion of this food  away from its restaurant at a church function. This event resulted in 21 persons becoming infected. All other affected individuals were sickened as a result of having eaten food prepared at Country Cottage’s restaurant.
The Country Cottage had primary coverage through Republic Underwriters, with limits of liability of $1 million per occurrence and $2 million in the aggregate, with a separate $2 million aggregate limit applicable to products/completed operations. The Country Cottage also had an excess policy through Southern Insurance Company with limits of liability of $2 million per occurrence and in the aggregate. The insurers filed an interpleader action and argued that the various bodily injuries all happened out of a single event; namely, “Country Cottage’s preparation, handling or storage of food that purportedly became contaminated with E. coli.” Thus, insurers, argued, all injuries arose out of a single occurrence, and as such, only $3 million in total insurance proceeds were available for the losses ($1 million per occurrence limit under the Republic Underwriters’ policy and $2 million under the Southern policy). The individual claimants argued on the other hand that the E. coli outbreak could have resulted from a number of factors, such as contamination by the food handlers and cross-contamination from various sources. Given these uncertainties, they argued, the court must find multiple occurrences based on the number of possible causes. Certain claimants also argued that each individual sale of contaminated food constituted a separate occurrence.
The lower court concluded that there were two occurrences in light of the “geographical distinction” between the two places of food preparation: the restaurant and the church. Citing to its decision in Business Interiors, Inc. v. Aetna Casualty & Surety Co., 751 F.2d 361 (10th Cir. 1984), however, the Tenth Circuit disagreed. In Business Interiors, the court considered a situation in which a dishonest employee forged or altered forty separate checks. The Tenth Circuit concluded that cause of the insured’s loss was the “continued dishonesty” of a single employee and could not be considered multiple, independent acts. The court found this reasoning applicable to Country Cottage’s food preparation:
Here, all the injuries were proximately caused by the restaurant’s ongoing preparation of contaminated food. Hence, there was but one occurrence. It does not matter that the food was served with other food items prepared at another location because the contamination originated at the restaurant. Nor does it matter that the precise underlying cause of the contamination is unknown because the fact remains that the contamination originated at the restaurant.
Thus, finding that all injuries were caused by Country Cottage’s“ ongoing preparation of contaminated food,” the court concluded that the number of locations at which the food was prepared or served was not a relevant consideration. Instead, the injuries arose out of a single occurrence, thus triggering only a single occurrence limit under the Republic policy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Traub Lieberman Straus & Shrewsberry LLP | Attorney Advertising

Written by:

Traub Lieberman Straus & Shrewsberry LLP

Traub Lieberman Straus & Shrewsberry LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.