A New York District Court recently held that thousands of claims by consumers for injuries arising from use of contact lens solution would be treated as separate occurrences. Bausch & Lomb Inc. v. Lexington Ins. Co., 08-CV-6260T (W.D.N.Y. Dec. 28, 2009). For a complete copy of the opinion, please click here.
The insured – a manufacturer of a widely used contact lens solution – brought a declaratory judgment action against its umbrella insurer seeking a declaration that the insurer was obligated to provide insurance coverage with respect to thousands of claims asserted by consumers who were injured by use of the insured’s contact lens solution. The insurer denied coverage maintaining that each of the consumers’ claims was a separate “occurrence” under the policies and, as a result, the underlying limit under the umbrella policies had not been exhausted and the attachment point of the umbrella policy not reached on a per claim basis. The insured maintained that all claims brought by users for injuries resulting from use of the lens solution constitute a single “occurrence.”
The court held that in a products case involving an intentionally formulated product, the exposure of each individual to the allegedly defective product, rather than the manufacture, distribution, or sale of the product, constitutes the accident giving rise to liability. Upon concluding that the consumers’ exposure constituted the “incident” giving rise to liability, the court went on to consider whether the incidents could be combined into a single occurrence or whether they each constituted a separate occurrence. In so doing, the court examined whether there was a “close temporal and spatial relationship between the incidents giving rise to injury or loss, and whether the incidents can be viewed as part of the same causal continuum, without intervening agents or factors,” in accordance with the “unfortunate events test.” Because the consumers’ exposure to the contact lens solution occurred in thousands of different locations, as a result of different solutions manufactured at different times and in different locations, and caused different types of injuries over the course of years, the court concluded that there is no close temporal and spatial relationship between the incidents giving rise to the alleged injuries, and there is no basis for holding that the incidents can be viewed as part of the same causal continuum, without intervening agents or factors. In short, the claims did not arise from a single occurrence.
The court went on to hold that the claims could not be grouped under the policies. Grouping provisions in the policies, the court reasoned, typically confirm that one individual’s repeated or continuous exposure on multiple occasions to a harmful condition will not be treated as separate occurrences or treat as a single occurrence the continuous or repeated exposure of multiple persons to harmful conditions that result from a single accident. They are not intended “to group claims where there is no single incident that can be identified as the event resulting in injury to the numerous claimants.” The court considered that each individual’s exposure to the solution was unique and constituted the accident that caused injury. As each exposure was separate and distinct, the court found they could not be grouped under the policies.