Case Title: Pharmacists Mutual Ins. Co. v. Advanced Specialty Pharmacy, LLC

Citation: 

Docket Number: 1140046

State: alabama

Court: Alabama Supreme Court

Date: 2016-11-18T00:00:00Z

Document:
Rel: 11/18/2016
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2016-2017
____________________
1140046
____________________
Pharmacists Mutual Insurance Company
v.
Advanced Specialty Pharmacy LLC et al.
Appeal from Jefferson Circuit Court
(CV-12-901477)
PARKER, Justice.1
This case was originally assigned to another Justice on
1
this Court; it was reassigned to Justice Parker.
1140046
Advanced Specialty Pharmacy LLC,  Meds I.V., Inc.
2
(Advanced Specialty Pharmacy LLC and Meds I.V., Inc., are
hereinafter referred to collectively as "Meds I.V." ), and
3
several individual defendants were sued by individuals
asserting various wrongful-death and personal-injury claims
("the claimants").  Meds I.V., a company that performs
pharmaceutical services, is insured by Pharmacists Mutual
Insurance Company ("Pharmacists Mutual").  Pharmacists Mutual
filed an interpleader complaint in the action and submitted $4
million to the Jefferson Circuit Court ("the circuit court"),
which Pharmacists Mutual alleged was the policy limits of Meds
I.V.'s insurance policies with it, and requested that the
circuit court divide the insurance moneys among 
the 
claimants. 
The claimants alleged that the policy limits of Meds I.V.'s
insurance policies with Pharmacists Mutual were $7 million
rather than $4 million.  The parties filed cross-motions for
a summary judgment, and the circuit court entered a summary
This appellee is also referred to in the record as
2
Advance Specialty Pharmacy LLC.
The 
nature 
of 
the 
relationship 
between 
Advanced 
Specialty
3
Pharmacy LLC and Meds I.V., Inc., is unclear from the record,
although it is clear that the entities are related.
2
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judgment in favor of the claimants.  We affirm in part,
reverse in part, and remand.
Facts and Procedural History
During the time relevant to this case, Meds I.V. produced
total parenteral nutrition ("TPN") that was used by hospitals
and administered to patients.  TPN is "widely used in
healthcare settings to deliver critical nutrients to patients
unable to tolerate enteral
feeding."  Neil Gupta et al.,
[4] 
"Outbreak of Serratia marcescens Bloodstream Infections in
Patients Receiving Parenteral Nutrition Prepared by a
Compounding Pharmacy," 59 Clinical Infectious Diseases 1 (May
13, 2014)(Exhibit B to the claimants' motion for a summary
judgment).  TPN is nutrition "maintained entirely by central
intravenous injection or other nongastrointestinal route." 
Stedman's Medical Dictionary 1245 (27th ed. 2000).  The
"'intravenous formulation is intended to provide all daily
nutritional requirements, such as electrolytes, amino acids,
dextrose, and lipids, and is considered to be one of the most
complex pharmaceuticals to prepare because of the need for
Enteral is defined as "[w]ithin, or by way of, the
4
intestine 
or 
gastro-intestinal 
tract, 
especially 
as
distinguished from parenteral."  Stedman's Medical Dictionary
597 (27th ed. 2000).
3
1140046
careful titration and combination of multiple components.'" 
The claimants' motion for a summary judgment (quoting Gupta et
al., 
"Outbreak 
of 
Serratia 
marcescens 
Bloodstream 
Infections,"
59 Clinical Infectious Diseases 1).
According to a memorandum from the Centers for Disease
Control and Prevention ("the CDC"), attached as Exhibit A to
the claimants' motion for a summary judgment, at Meds I.V.'s
facility, "TPN products were compounded by a pharmacy
technician in consultation with a licensed pharmacist."  Most
ingredients for TPN, including an amino-acid solution, were
provided by a manufacturer in sterile, multidose vials. 
However, as a result of a shortage in the manufacturer's
supply of amino-acid solution, Meds I.V. began preparing its
own amino-acid solution.  According to the same memorandum, to
prepare the amino-acid solution, Meds I.V. mixed amino-acid
"[p]owders ... with sterile water in a 100-liter non-sterile
container."  Then, pursuant to a prescription written by a
physician, Meds I.V. compounded the amino-acid solution with
other ingredients to produce the prescribed TPN.  The
affidavit of Donald Bendure, an independent consultant hired
by the claimants whose expertise included matters pertaining
4
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to risk management, commercial insurance, and insurance
litigation, described Meds I.V.'s process for producing TPN:
"[T]here were two separate and distinct operations
by Meds I.V. that led to the final TPN product
delivered from Meds I.V. to the end-user patients:
1) a bulk manufacturing process of [amino-acid
solution] not subject to a prescription requirement
... which were [sic] then stored for future use as
one ingredient ..., followed by 2) a series of
subsequent 
compound 
drug 
preparations, 
each
a c c o r d i n g  
t o  
s p e c i f i c  
i n d i v i d u a l
prescriber/patient/pharmacist requirements ...."
(Emphasis omitted.)  Meds I.V. received requests daily from
physicians to fill prescriptions for TPN.
In October 2010, Pharmacists Mutual issued to Meds I.V.
two insurance policies: 
(1) 
the Business Owners Special Policy
("the business-owners policy") and (2) the Commercial
Umbrella/Excess Liability Coverage Policy ("the excess
policy") (the business-owners 
policy 
and the excess policy are
hereinafter referred to collectively as "the policies").  The
policies provided coverage to Meds I.V. from October 28, 2010,
until October 28, 2011, during which the events giving rise to
this case occurred.
The business-owners policy has a "general aggregate
limit" of $3 million, a "products/completed work hazard
aggregate limit" of $2 million, and an "each occurrence limit"
5
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of $1 million, as detailed on the declarations page of the
policy.  The excess policy provides additional coverage in
conjunction with Pharmacists Mutual's obligation to provide
coverage under the business-owners policy.  Under the excess
policy, Pharmacists Mutual agreed to pay, "up to [its] limit,
all sums in excess of 'underlying insurances' [the business-
owners policy] for which [Meds I.V.] becomes 
legally 
obligated
to pay as 'damages' to which this insurance applies."  The
excess policy has an "each occurrence limit" of $1 million, a
"general 
aggregate 
limit" 
of 
$1 
million, 
and 
a
"products/completed work hazard aggregate limit" of $1
million, as detailed on the declarations page of the policy.
The business-owners policy provides two main categories
of coverage: "Property Coverages" and "Commercial Liability
Coverages."  "Commercial Liability Coverages" include four
coverage categories: "Coverage L -- Bodily Injury 
and 
Property
Damage 
Liability"; 
"Coverage 
M 
-- 
Medical 
Payments"; 
"Coverage
O -- Fire Legal Liability"; and "Coverage P -- Personal and
Advertising Injury Liability."  It is undisputed that
"Coverage L" of the business-owners policy, which covers
bodily injury, is the only coverage applicable in this case.
6
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In March 2011, the CDC was notified of five patients in
a hospital located in Birmingham, Alabama, who had contracted
bloodstream infections ("BSIs") as a result of the presence in
their 
bodies 
of 
bacteria 
Serratia 
marcescens 
("S.
marcescens").  According to the memorandum from the CDC, S.
marcescens is "an opportunistic pathogen of the respiratory
tract, urinary tract, and wounds [that] has been implicated in
outbreaks 
of 
[BSIs] associated with 
contamination 
of
intravenous products."  After receiving notification that
those patients had contracted BSIs, the CDC began an
investigation and determined that the BSIs were caused by TPN
produced by Meds I.V. that was contaminated with S.
marcescens.  Later, the CDC discovered at least 19 patients in
6 Alabama hospitals who had contracted BSIs as a result of
contaminated TPN produced by Meds I.V. between January 2011
and March 2011; of those patients, 17 tested positive for the
presence of S. marcescens.  Nine deaths occurred as a result.
Concerning the cause of the contamination of the TPN that
resulted in the BSIs in the claimants or those whom the
claimants represent, Don McGuire, general counsel for
Pharmacists Mutual, stated in an e-mail to Pharmacists
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Mutual's reinsurer that one "pharmacy technician" at 
Meds I.V.
had indicated that there were "a number of procedure
violations that could have resulted in a contaminated
solution" of the TPN, and that "[o]ne important lapse was that
... on at least 3 occasions, bags were not quarantined and
tested prior to their being used in compounding patient
orders."  McGuire further explained that "[i]t is difficult to
point to one piece of faulty equipment, for example, as the
sole cause of these claims," given "the number of breaches
allegedly committed by" Meds I.V.
Pharmacists Mutual's outside counsel, Michael Ryan,
reached a similar conclusion, as illustrated in the following
excerpt from a letter he wrote to McGuire:
"The information provided by defense counsel
[for Meds I.V.] ... suggests that there may be a
number of different, independent violations of the
standard of care which caused the contamination,
including:
"Using non-sterile barrel;
"Using distilled water instead of
sterile water to compound TPN;
"Failing to put finished bags of TPN
through the quarantine process;
"Diluting amino acid solution with
distilled water to make it go further; 
8
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"Using filters that were overworked or
possibly dysfunctional; and 
"Failing to respond to amino acid that
was not the proper color and was too dark."
According to Ryan, there were "a number of independent acts[,]
each one of which could constitute a violation of [the]
standard of care and each one of which could have caused the
contamination," and, for that reason, he stated, "[w]e are not
... dealing with a single act or omission that affects
multiple 
prescriptions" 
but, 
"[i]nstead, 
we 
have 
multiple 
acts
or 
omissions 
that 
appear 
to 
have 
affected 
multiple
prescriptions."
Through its investigation, the CDC concluded that "the
tap water or the amino acid powder may have been the likely
source for introduction, and subsequent contamination, of the
TPN products."  Moreover, the CDC identified the following
deviations by Meds I.V. from the United States Pharmacopeia
guidelines that likely 
contributed 
to the contamination of the
TPN:
"Excessive particulate matter in the pre-
filtered amino acid solution interrupted flow across
the filter membrane and likely interfered with the
efficiency of the filter.
9
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"Replacement of the filter caused a break in the
system and served as a potential source for the
contamination of the laboratory hood and solutions
downstream of the filter.
"Storage of the mixed amino acid powders in
sterile water 1-2 days prior to filtration on some
occasions may have contributed to overgrowth of
bacteria and generation of bacterial endotoxins.
"Sampling of a small volumes (<25mL) of the
100L-amino acid solution was likely insufficient to
detect bacterial growth on sterility testing."
In 2011, the claimants filed wrongful-death actions and
personal-injuries claims against Meds I.V., among others, to
recover damages for the bodily injuries and deaths allegedly
suffered as a result of the BSIs, which were caused by the
contaminated TPN produced by Meds I.V.
On May 10, 2012, Pharmacists Mutual filed a "complaint in
interpleader" in the action in the circuit court and sought a
discharge from its indemnity obligations under the 
policies by
depositing $4 million with the clerk of the circuit court. 
Pharmacists Mutual alleged that the $4 million represented
"the full amount of primary liability insurance coverage and
excess/umbrella insurance coverage" available under the
policies.  The $4 million was based solely on the general
aggregate limits of the policies ($3 million under the
10
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business-owners policy and $1 million under the excess
policy), without regard to the products/completed-work-hazard
aggregate limits.  Pharmacists Mutual requested immediate
discharge from all liability on the underlying claims
subsequent to its deposit of $4 million with the circuit court
clerk.
On April 19, 2013, the claimants filed amended answers to
Pharmacists 
Mutual's 
complaint 
in 
interpleader 
and
counterclaims, which sought judgments declaring the coverage
under the policies.  The claimants argued that their claims
against Meds I.V. included both professional negligence and
products liability.  Thus, the claimants alleged that -- in
addition to the $4 million general aggregate limits ($3
million under the business-owners policy and $1 million under
the excess policy) applicable to the professional-negligence
claims -- the products/completed-work-hazard aggregate limits
of $2 million  under the business-owners policy and $1 million
under the excess policy should apply based on the claimants'
products-liability claims.  Thus, the claimants sought 
a 
total
of $7 million, representing "the sum of the two aggregate
limits listed on the Declaration Sheets" -- $4 million for the
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professional-negligence claims and $3 million for the
products-liability claims.
On November 6, 2013, the claimants filed a motion for an
order of disbursement of the $4 million.  The claimants also
asked that the circuit court retain jurisdiction to determine
the amount of additional insurance coverage, if any,
available.  The circuit court ordered the disbursement, as
follows:
"There being no dispute about the fact that
[Pharmacists Mutual] is obligated to pay at least $4
million in coverage ... the [circuit court] is
hereby 
directing 
the 
Clerk 
to 
disburse 
the
approximately $4 million that is not in dispute. ...
The 
[circuit 
court] 
retains 
jurisdiction 
to
adjudicate 
the 
issue 
of 
whether 
[Pharmacists
Mutual's] liability limits exceed the admitted $4
million, and a separate order addresses the
procedure for adjudicating that remaining issue."
The parties later filed cross-motions for a summary
judgment.  On August 26, 2014, the circuit court granted the
claimants' summary-judgment motion and denied Pharmacists
Mutual's motion.  In its summary-judgment order, the circuit
court determined that
"the 
Serratia 
marcescens 
likely 
reached 
the
claimants and their decedents because of (1)
multiple contaminations during the manufacturing by
Meds I.V. of an amino acid solution, which was
produced without a physician's prescription or
12
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involvement and, among other ingredients, was
ultimately used by Meds I.V. as a component of the
compound TPN; and (2) multiple contaminations,
separate and distinct from those contaminations that
occurred during the manufacturing of the amino acid
solution, during the compounding of the TPN by Meds
I.V. pursuant to physicians' prescriptions."
The circuit court concluded:
"1. Pursuant to the [business-owners policy],
Pharmacists Mutual owes Meds I.V. the following in
indemnity obligations:
"a. As acknowledged by Pharmacists
Mutual, Pharmacists Mutual owes $3 million
in indemnity to Meds I.V. as a result of
the 'bodily injuries,' suffered by the
claimants and their decedents, that were
caused 
by 
the 
multiple 
'occurrences'
associated with the 'pharmacy services' at
Meds I.V.;
"b. Pharmacists Mutual owes $2 million
in indemnity to Meds I.V. as a result of
the 'bodily injuries,' suffered by the
claimants and their decedents, that were
caused by the multiple 'occurrences' -- of
which 
there 
were, 
at 
least, 
three
'occurrences' 
distinct 
from 
the
'occurrences' that happened during the
'compounding' of the TPN -- associated with
the 'manufacturing' activities at Meds
I.V.; and
"c. Pharmacists Mutual's indemnity
obligations to Meds I.V. under the general
aggregate limit and the products/completed
work hazard aggregate limit are not
mutually exclusive and, as applied to these
circumstances, must be aggregated for
purposes of indemnifying Meds I.V. as a
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result of the 'bodily injuries' suffered by
the 
claimants 
and 
their 
decedents.
Accordingly, there is $5 million in
coverage available to the claimants under
the [business-owners policy].
"2. Pursuant to the excess policy, Pharmacists
Mutual owes Meds I.V. the following in indemnity
obligations:
"a. As acknowledged by Pharmacists
Mutual, Pharmacists Mutual owes $1 million
in indemnity to Meds I.V. as a result of
the 'bodily injuries,' suffered by the
claimants and their decedents, that were
caused 
by 
the 
multiple 
'occurrences'
associated with the 'pharmacy services' at
Meds I.V.;
"b. Pharmacists Mutual owes $1 million
in indemnity to Meds I.V. as a result of
the 'bodily injuries,' suffered by the
claimants and their decedents, that were
caused by the multiple 'occurrence' -- of
which 
there 
were, 
at 
least, 
three
'occurrences' 
distinct 
from 
the
'occurrences' that happened during the
'compounding' of the TPN -- associated
with, the 'manufacturing' activities at
Meds I.V.; and
"c. Pharmacists Mutual's indemnity
obligations to Meds I.V. under the general
aggregate limit and the products/completed
work aggregate limit are not mutually
exclusive 
and, 
as 
applied 
to 
these
circumstances, must be aggregated for
purposes of indemnifying Meds I.V. as a
result of the 'bodily injuries' suffered by
the 
claimants 
and 
their 
decedents.
Accordingly, there is $2 million in
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coverage available to the claimants under
the excess policy.
"Finally, Pharmacists Mutual has already paid
the sum of $4 million into court, and that $4
million has been disbursed to the claimants in
accordance with the procedures previously approved
by the court and the parties. In order to be
discharged from the indemnity obligations under the
[policies], Pharmacists Mutual is ordered to pay
into court an additional sum of $3 million, which
shall then be disbursed ... to the claimants in
accordance with the same procedures previously
approved by the court and the parties and used to
disburse the initial $4 million."
Pharmacists Mutual appealed.
Standard of Review
"Our standard of review for a summary judgment
is as follows:
"'We review the trial court's grant or
denial of a summary-judgment motion de
novo, and we use the same standard used by
the trial court to determine whether the
evidence presented to the trial court
presents a genuine issue of material fact.
Bockman v. WCH, L.L.C., 943 So. 2d 789
(Ala. 2006). Once the summary-judgment
movant shows there is no genuine issue of
material fact, the nonmovant must then
present substantial evidence creating a
genuine issue of material fact. Id. "We
review the evidence in a light most
favorable to the nonmovant." 943 So. 2d at
795. We review questions of law de novo.
Davis 
v. 
Hanson 
Aggregates 
Southeast, 
Inc.,
952 So. 2d 330 (Ala. 2006).'"
15
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Lloyd Noland Found., Inc. v. HealthSouth Corp., 979 So. 2d
784, 793 (Ala. 2007) (quoting Smith v. State Farm Mut. Auto.
Ins. Co., 952 So. 2d 342, 346 (Ala. 2006)).  "Additionally,
'[w]hen a circuit court interprets an insurance policy as a
matter of law, that interpretation is subject to de novo
review.' Hartford Cas. Ins. Co. v. Merchants & Farmers Bank,
928 So. 2d 1006, 1009 (Ala. 2005)."  Ex parte State Farm Mut.
Auto. Ins. Co., 118 So. 3d 699, 704 (Ala. 2012).
Discussion
The issues before this Court concern the interpretation
of the policies.  Concerning the interpretation of an
insurance policy, this Court has stated:
"'When analyzing an insurance policy,
a court gives words used in the policy
their 
common, 
everyday 
meaning 
and
interprets them as a reasonable person in
the 
insured's 
position 
would 
have
understood them. Western World Ins. Co. v.
City of Tuscumbia, 612 So. 2d 1159 (Ala.
1992); St. Paul Fire & Marine Ins. Co. v.
Edge Mem'l Hosp., 584 So. 2d 1316 (Ala.
1991). If, under this standard, they are
reasonably certain in their meaning, they
are not ambiguous as a matter of law and
the rule of construction in favor of the
insured does not apply. Bituminous Cas.
Corp. v. Harris, 372 So. 2d 342 (Ala. Civ.
App. 1979). Only in cases of genuine
ambiguity or inconsistency is it proper to
resort to rules 
of construction. Canal Ins.
16
1140046
Co. v. Old Republic Ins. Co., 718 So. 2d 8
(Ala. 1998). A policy is not made ambiguous
by the fact that the parties interpret the
policy differently or disagree as to the
meaning of a written provision in a
contract. Watkins v. United States Fid. &
Guar. Co., 656 So. 2d 337 (Ala. 1994). A
court must not rewrite a policy so as to
include or exclude coverage that was not
intended. 
Upton 
v. 
Mississippi 
Valley 
Title
Ins. Co., 469 So. 2d 548 (Ala. 1985).'
"B.D.B. v. State Farm Mut. Auto. Ins. Co., 814 So.
2d 877, 879–80 (Ala. Civ. App. 2001). However, if a
provision in an insurance policy is found to be
genuinely ambiguous, 'policies of insurance should
be construed liberally in respect to persons insured
and strictly with respect to the insurer.' Crossett
v. St. Louis Fire & Marine Ins. Co., 289 Ala. 598,
603, 269 So. 2d 869, 873 (1972)."
State Farm Mut. Auto. Ins. Co. v. Brown, 26 So. 3d 1167, 1169-
70 (Ala. 2009).
A basic overview of the business-owners policy is
necessary to understand 
the 
parties' arguments.  The business-
owners policy states that Coverage L "applies only to 'bodily
injury' ... caused by an 'occurrence.'"  An "occurrence" is
defined in the business-owners policy as "an accident and
includes 
continuous 
or 
repeated 
exposure 
to 
similar
conditions."  As stated above, the parties agree that numerous
occurrences caused the 
claimants to suffer bodily injuries, to
which Coverage L applies.
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Coverage L of the business-owners policy states that
"[t]he amount [Pharmacists Mutual] will pay for 'damages' is
limited as described under How Much We Pay."  "Damages" is
defined in the business-owners policy as "compensation in the
form of money for a person who claims to have suffered an
injury."  The "How Much We Pay" section of the business-owners
policy, which was amended by the "pharmacy services
professional liability coverage" endorsement, states, in
pertinent part:
"How Much We Pay ...
"1. 
The 
'limits' 
shown 
on 
the 
'declarations' and
subject to the following conditions, are the most
[Pharmacists Mutual will] pay regardless of the
number of:
"a) 'insureds' under the Commercial
Liability Coverages;
"b) persons or organizations who
sustain injury or damage; or
"c) claims made or 'suits' brought; or
"d) policy periods involved.
"[Pharmacists Mutual's] total liability under
Commercial Liability Coverages for damages resulting
from one loss will not exceed the 'limits' shown on
the declarations page.  All 'bodily injury' ...
resulting from one 'occurrence' ... is considered
the result of one loss.
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"2. The General Aggregate Limit is the most
[Pharmacists Mutual] will pay for the sum of:
"a. all 'damages' under Coverage L,
except 'damages' due to 'bodily injury' ...
included in the 'products/completed work
hazard';
"....
"3. 
The 
Products/Completed 
Work 
Hazard 
Aggregate
Limit is the most [Pharmacists Mutual] will pay for
'damages' due to 'bodily injury' ... included in the
'products/completed work hazard.'
"....
"8. The General Aggregate Limit and the
Products/Completed Work Hazard Aggregate Limit apply
separately to each consecutive 12-month period
beginning with the inception date of the Commercial
Liability Coverage shown on the 'declarations.'"
In order to determine which limit applies to Pharmacists
Mutual's liability under Coverage L, it is necessary to
determine whether the damages claimed by the claimants are the
result of bodily injury "included in the 'products/completed
work 
hazard.'" 
 
The 
business-owners 
policy 
defines
"products/completed work hazard" as follows:
"17. 'Products/completed work hazard' --
"a. 'Products hazard' means 'bodily
injury' ... arising out of 'products' after
physical possession of the products has
been relinquished to others.
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"The 'bodily injury' ... must occur
away from premises [Meds I.V.] own[s] or
rent[s] unless [Meds I.V.'s] business
includes 
selling, 
handling, 
or 
distributing
'products' for consumption on premises
owned by or rented to [Meds I.V.]; and
"b. 'Completed work hazard' means
'bodily injury' ... occurring away from
premises [Meds I.V.] own[s] or rent[s] and
arising out of '[Meds I.V.'s] work.'"
The term "products" is defined as "goods or products
manufactured, sold, handled, distributed, or disposed of by
[Meds I.V.]."
In summary, in order for the products/completed-work-
hazard aggregate limit to apply to limit Pharmacists Mutual's
liability under Coverage L, there must be: (1) damages (2)
based on a bodily injury and (3) the bodily injury must be
"included in the 'products/completed work hazard.'" In order
for a bodily injury to be "included in the 'products/completed
work hazard,'" that injury must be the result of either a
"products hazard" or a "completed work hazard."  In the
present case, the circuit court determined that the 
claimants'
bodily injuries were caused by a "products hazard." 
Therefore, in order for the claimants' bodily injuries to be
considered 
"included 
in 
the 
'products/completed 
work 
hazard,'"
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their bodily injuries must (1) have arisen "out of 'products'
after 
physical 
possession 
of 
the 
products 
has 
been
relinquished to others" and (2) have been incurred "away from
premises [Meds I.V.] own[s] or rent[s]."  If it is
demonstrated that the claimants' bodily injuries fit within
this definition, then the products/completed-work-hazard
aggregate limit applies to limit Pharmacists Mutual's
liability under Coverage L.  If the claimants' bodily injuries
do not fit within this definition, then the general aggregate
limit applies to the liability of Pharmacists Mutual under
Coverage L.
Based on this interpretation of the business-owners
policy, it is evident that a bodily injury cannot both arise
"out of 'products' after physical possession of the products
has been relinquished to others" and be incurred "away from
premises [Meds I.V.] own[s] or rent[s]" and, at the same time,
not arise "out of 'products' after physical possession of the
products has been relinquished to others" and be incurred
"away from premises [Meds I.V.] own[s] or rent[s]."  Under the
definition of "products hazard," why the product caused a
bodily injury is inconsequential; it is only consequential
21
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that it did cause a bodily injury.  Once it is determined that
a bodily injury has been caused by a "products hazard," the
products/completed-work-hazard aggregate limit alone applies
to limit Pharmacists Mutual's liability for damages arising
out of that bodily injury.
In the present case, it is undisputed that the claimants
suffered bodily injuries.  It is also undisputed that the
claimants' bodily injuries are not "included in the
'products/completed work hazard.'"  Pharmacists Mutual
concedes this point.  However, the circuit court determined
that the claimants' bodily injuries are, at the same time,
both "included in the 'products/completed work hazard' 
and 
not
"included in the 'products/completed work hazard.'"  The
circuit court reached this conclusion by determining that the
claimants' bodily injuries were caused by multiple, separate,
and distinct occurrences.  Specifically, the circuit court
held that "Pharmacists Mutual has admitted that ... the
claimants' 'bodily injuries' ... were caused by 'occurrences'
associated 
with 
Meds 
I.V.'s 
'pharmacy 
services' 
--
specifically, its 'compounding' of TPN."  On this basis, the
circuit court concluded that the claimants' bodily injuries
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are not "included in the 'products/completed work hazard'"
and, thus, that the general aggregate limit applied to
Pharmacists Mutual's liability under Coverage L.  The circuit
court 
also 
held 
that 
"there 
were, 
at 
least, 
three
'occurrences' within the meaning of the [policies] that
happened during the 'manufacturing' of the amino 
acid solution
by Meds I.V.," and that "those 'occurrences' likely
contributed to the bodily injuries suffered by the claimants
and, 
in 
fact, 
were 
separate 
and 
distinct 
from 
the
'occurrences' that happened during the 'compounding' of the
TPN."  The circuit court stated that "[t]hese distinct
'occurrences' resulted in Meds I.V. 'manufacturing' defective
'products' -- specifically, multiple batches of amino acid
solution contaminated with Serratia marcescens."  On this
basis, the circuit court concluded that the claimants' bodily
injuries -- that is, the same bodily injuries the circuit
court concluded are not "included in the 'products/completed
work hazard,'" thus subjecting any damages arising out of
those bodily injuries to the general aggregate limit  -- are
5
What is not explicitly stated in the circuit court's
5
order is that the circuit court determined that each
claimant's bodily injuries were caused by two distinct
occurrences.  The circuit court concluded that the amino acid
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"included 
in 
the 
'products/completed 
work 
hazard,'" 
and, 
thus,
that the products/completed-work-hazard aggregate limit
applied 
to 
limit 
Pharmacists 
Mutual's 
liability 
under 
Coverage
L.
The circuit court's conclusion is contrary to the plain
language of the business-owners policy.  Specifically, the
plain language of the business-owners policy is clear that a
bodily injury is either "included in the 'products/completed
work hazard,'" or it is not.  A bodily injury cannot
simultaneously 
be 
and 
not 
be 
"included 
in 
the
'products/completed work hazard.'"
manufactured by Meds I.V. was contaminated, which it
considered to be an "occurrence."  Based on that occurrence,
the circuit court determined that the claimants' bodily
injuries arose from a "products hazard."  That is, the circuit
court determined that the claimants suffered bodily injuries
that arose out of a product (the circuit court held that the
amino-acid solution manufactured by Meds I.V. was a product)
after physical possession of the product had 
been relinquished
to the hospitals that administered the TPN.  The circuit court
then stated that "[t]he contaminated amino acid solution was
then incorporated by Meds I.V., along with other ingredients,
to create TPN during the 'compounding' phase, which caused the
contamination to reach the claimants and their decedents." 
The circuit court considered the compounding of the TPN to be
a separate and distinct occurrence.  Based on that occurrence,
the circuit court determined that the claimants' bodily
injuries the circuit court determined are included in the
"products/completed work hazard" are also not included in the
"products/completed work hazard."
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Pharmacists Mutual conceded, and the claimants agreed,
that the claimants' bodily injuries are not "included in the
'products/completed work hazard.'"   As a result, the circuit
6
court held that Pharmacists Mutual's liability for damages
under Coverage L is limited by the general aggregate limit of
$4 million.  The circuit court then held, after adopting the
parties' position that the claimants' bodily injuries are not
"included in the 'products/completed work hazard,'" that the
claimants' bodily injuries are also "included in the
'products/completed 
work 
hazard.'" 
 
This 
holding 
is
inconsistent.  As Pharmacists Mutual argues in its brief
before this Court, a bodily injury can be caused by only one
occurrence.  In other words, Pharmacists Mutual 
is 
essentially
arguing that a bodily injury is either "included in the
'products/completed work hazard'" or it is not.  See
Pharmacists Mutual's brief, at pp. 17-22.  For the reasons set
forth above, we agree with Pharmacists Mutual that the plain
Pharmacists Mutual argued that the claimants' bodily
6
injuries were caused by "pharmacy services" provided by Meds
I.V.  Pharmacists Mutual argued that bodily injuries caused by
"pharmacy services" are necessarily not "included in the
'products/completed work hazard.'"  Pharmacists Mutual does
not direct this Court's attention to any language in the
policies requiring such a result, and nothing in this opinion
should be read as deciding that issue.
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language of the business-owners policy requires such a 
result. 
Accordingly, we hold that the circuit court erred in
determining that the claimants' bodily injuries were both
"included in the 'products/completed work hazard'" and, at 
the
same time, not "included in the 'products/completed work
hazard.'"
Conclusion
Based on the foregoing, we affirm the summary judgment
insofar as it held that the general aggregate limit applied to
limit Pharmacists Mutual's liability to $4 million.  However,
we reverse the circuit court's judgment insofar as it held
that the products/completed-work-hazard aggregate limit also
applied to expand Pharmacists Mutual's liability by 
$3 
million
to $7 million.  We remand the case to the circuit court for
proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
Stuart, Bolin, Main, and Wise, JJ., concur.
Shaw, J., recuses himself.
26