Illinois and Wisconsin High Courts Apply "Time and Space" Considerations in Quantifying the Number of Occurrences

Recent rulings from the Supreme Courts of Illinois and Wisconsin demonstrate that these states have joined the increasing number of jurisdictions that have applied “time and space considerations” in quantifying the number of occurrences in claims involving multiple losses.
 
The Illinois case, Addison Insurance Co. v. Fay, et al,(Jan. 23, 2009 Docket No. 105752), arose from the deaths of two boys in a water-filled excavation pit in the vicinity of their home.  The owner of the property on which the pit was located evidently failed to properly secure and control his property.  The record reflects that investigators theorize that the boys became trapped in the pit while returning home to get out of a storm.  Evidently, one of the boys became trapped while attempting to jump across the pit, and the other became trapped while trying to help the first.  Doctors who performed autopsies of the boys’ bodies concluded that one drowned, while the other died of hypothermia.  Significantly, neither doctor could determine with any certainty when – and how closely in time – the boys had perished. The relevant liability policy defined the term ‘occurrence’ to mean “an accident, including continuous or repeated exposure to substantially the same general conditions.” (emphasis supplied)
 
The trial court found that the boys’ deaths resulted from two occurrences, a decision reversed by an intermediate appeals court that reasoned that the deaths were “so closely linked in time and space as to be considered by a reasonable person as one ‘occurrence.’”  Id. at 4.  The Illinois Supreme Court subsequently overturned the intermediate appeals court ruling and reinstated the trial court ruling finding that the boys’ deaths constituted two separate occurrences.
 
At the outset of its opinion, the Addison court noted that Illinois has endorsed the “cause theory” for quantifying the number of occurrences in multiclaim losses.  At first glance, application of that test here might lead one to conclude that the two boys’ deaths resulted from a single cause –the negligence of the owner of the property where the pit was located in failing to  properly secure his property.  Nevertheless, the Illinois high court also found that in applying the “cause” approach to a given set of facts, a “time and space” test must be used.  The Addison court noted that the intermediate court properly used a “time and space” test in its number-of-occurrences analysis, although the court disagreed with its conclusion: “[a]lthough we conclude that the appellate court properly analyzed the facts under a time and space test, we cannot accept the [intermediate] court’s opinion that the facts conclusively demonstrate that the injuries to [the boys] constitute only a single occurrence.”  Id. at 12.
 
Continuing, the Addison court noted, “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 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 boys had died.”  Id. at 12-13.  “Any opinions on these issues,” the high court said, “would be inappropriately speculative.”  Id.  In view of this, the Illinois Supreme Court concluded, “The substantial uncertainty on this issue persuades us that [the insurer] 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 [the insurer] cannot meet its burden, we hold that the injuries to [the boys] constituted two occurrences.”  Id.
 
In the Wisconsin case, Plastics Engineering Co. v. Liberty Mutual Ins. Co., et al., 2009 Wisconsin LEXIS 9 (2009), the number-of-occurrences issue arose in the context of numerous asbestos claims brought against a manufacturer of compounds containing asbestos.  Significantly, the record confirms that the claimants were exposed to asbestos at varying geographic locations over many years.  The “occurrence” definition in the relevant policies was substantially identical to the definition at issue in Addison.  Moreover, like Illinois, Wisconsin has embraced a “cause” approach for quantifying the number of occurrences.
 
The Plastics Engineering court found the underlying asbestos claims to involve multiple occurrences.  In so ruling, the Wisconsin high court noted, “The occurrence in this case is the repeated exposure to asbestos-containing products because the policy states that an occurrence is the ‘continuous or repeated exposure’ to conditions.  Multiple occurrences arise because each individual’s injury stems from his or her repeated exposure to asbestos containing products.”  (emphasis supplied)  Id.at 26.
 
The court also rejected the argument that the occurrence should be considered from the insured’s standpoint, and, under that view, there is only one occurrence – the insured’s sale of its asbestos-containing compounds, without adequate warnings. The Plastics Engineering court noted that the policy language defined ‘occurrence’ as the “continuous or repeated exposure to conditions,” and that “[t]he exposure must, quite obviously, be exposure to the injured person and not exposure to [the insured].” Id. at 27.  In conclusion, the Wisconsin Supreme Court declared, “Accordingly, when we apply the policy language to the facts of this case, we conclude that each individual’s repeated and continuous exposure constitutes an occurrence.”  (emphasis supplied)  Id.
 
Addison and Plastics Engineering are indicative of a trend in an increasing number of jurisdictions: They technically endorse the “cause theory” for quantifying the number of occurrences in multiclaim losses, yet they employ a “time and space” test for determining whether injuries to multiple claimants – particularly those happening over many years at varying locations – should be treated as one occurrence or multiple occurrences.