Injury suffered by children of different families living at different times in the same apartment was limited to one occurrence under the policy's noncumulation clause. Nesmith v. Allstate Ins. Co., 2014 N.Y. LEXIS 3350 (N.Y. Nov. 25, 2014).
The landlord had a liability policy issued by Allstate. The declarations page stated there was a $500,000 limit for "each occurrence." The policy contained the following noncumulation clause:
Regardless of the number of insured persons, injured persons, claims, claimants or policies involved, our total liability . . . for damages resulting from one accidental loss will not exceed the limit shown on the declarations page. All bodily injury . . . resulting from one accidental loss or from continuous or repeated exposure to the same general conditions is considered the result of one accidental loss.
The Young family lived in the apartment from November 1992 to September 1993. In July 1993, the Department of Health notified the landlord that one of the children had an elevated blood lead level and that several areas in the apartment were in violation of state regulations. Repairs were made and the Department advised the landlord in August 1993 that the violations had been corrected.
After the Young family moved out, the Patterson family moved into the apartment. Again, one child was found to have an elevated blood lead level. The Department of Health sent another letter stating that violations had been found and needed to be corrected.
In 2004, Young and Jannie Nesmith, on behalf of the Patterson children (her grandchildren), brought two separate actions against the landlord for personal injury caused by exposure to lead paint. Young settled in 2006 for $350,000, which Allstate paid. In 2008, Nesmith settled her claim pursuant to a stipulation that reserved the issue of the applicable policy limit. Allstate paid the $150,000 that it claimed was the remaining coverage under the landlord's policy. Nesmith then sued Allstate for a declaratory judgment, asserting that a separate $500,000 limit applied to each family's claim, and that her grandchildren could recover an additional $350,000.
The trial court agreed with Nesmith, finding it could not conclude that the children in the two cases were injured by exposure "to the same conditions." The Appellate Division reversed. In a prior case, Hiraldo v. Allstate Ins. Co., 5 NY3d 508 (2005), the Court of Appeals interpreted a noncumulation clause found in successively-issued liability policies. The court held that a person suing for exposure to lead paint during the terms of all the policies could recover no more than one policy limit. Therefore, under the plain terms of the noncumulation clause here, the number of claims and claimants could not make an additional limit available.
The Court of Appeals affirmed. The court rejected Nesmith's argument that the injuries to the Young children and Nesmith's grandchildren were separate losses because they did not result "from continuous or repeated exposure to the same general conditions." Young's children and Nesmith's grandchildren were exposed to the same hazard, lead paint, in the same apartment. The landlord's remedial efforts were not wholly successful, and the same general conditions – the presence of lead paint that endangered children's health – continued to exist. Because Young's children and Nesmith's grandchildren were injured by exposure to the same general conditions, their injuries were part of a single "accidental loss," and only one policy limit was available to the two families.