When two boys drowned at a summer camp, the issue arose as to whether there were one or two occurrences. Fellowship of Christian Athletes v. AXIS Ins. Co., 2014 U.S. App. LEXIS 13176 (8th Cir. July 11, 2014).
The two boys could not swim, and their camp permission forms indicated that they were non-swimmers. One night, the Fellowship of Christian Athletes (FCA) had a pool party. After the party, the FCA staff realized the two boys were missing. They had drowned, and their bodies were found lying side-by-side at the bottom of the deep end of the pool. The death certificate for one boy listed the time of death as 10:44 p.m., while the other boy's time of death was listed as 10:42 p.m.
The FCA was insured under three policies. AXIS Insurance Company insured FCA under a CGL policy with $1 million limits per occurrence and $5 million in the aggregate. The FCA also had two umbrella policies, one issued by Ironshore Speciality Insurance Company, which provided up to $10 million in coverage in excess of Axis's policy. Under the second umbrella policy, RSUI Indemnity Company covered up to $5 million in excess of the Axis and Ironshore policies.
The FCA filed suit against the insurance companies, seeking a determination of whether the deaths were caused by one occurrence or two occurrences under the Axis policy. The district court granted Axis's motion for summary judgment and held that the drownings were caused by one occurrence. Therefore, Axis's liability was limited to $1 million, and Ironshore would be liable for damages over $1 million. Ironshore appealed, arguing that there were two occurrences under the Axis policy and therefore liability extended to $2 million.
The Eighth Circuit affirmed. Under Missouri law, the "cause" approach applied to determine the number of occurrences. Under the cause approach, an insured's single act was considered the accident from which all claims flowed. Some states adopted a time and space test, which found two occurrences if two injuries were not so closely linked in time and space as to be considered one event. But Missouri had not adopted the time and space test.
Ironshore argued that there were two separate occurrences because the underlying lawsuit alleged negligent supervision and the boys were under the care of two different camp counselors. However, the conduct of the insured, the FCA, not the camp counselors, was the proper focus. The underlying litigation alleged that the FCA was negligent in allowing the boys to attend the pool party while knowing they could not swim and in failing to properly train and supervise the camp counselors. Further the boys arrived at the pool 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 because the underlying lawsuit claimed that the drownings were caused by exposure to the same general harmful conditions.
