Opinion ID: 2098172
Heading Depth: 2
Heading Rank: 1

Heading: The Number of Occurrences

Text: Stonewall's policies provide that [t]he term `Occurrence,' wherever used herein, shall mean an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in personal injury, property damage or advertising liability during the policy period. All such exposure to substantially the same general conditions existing at or emanating from one premises location shall be deemed one occurrence. Stonewall contends that the motion judge erroneously invaded the jury's province by resolving the number-of-occurrences question as a matter of law, where several issues of material fact were in dispute. Stonewall identifies two purportedly disputed facts. The first concerns how many separate causes of system failure gave rise to the polybutylene system liability claims. DuPont claims that the liabilities arose from the product's susceptibility to chemical degradation alone (inside-out cracks). Stonewall claims that fault lies with two separate and independent causeschemical degradation and the product's inability to resist mechanical stresses (outside-in cracks). Stonewall's two independent causes contention misguidedly attempts to turn the number-of-occurrences analysis into a number-of-conditions question. Whether the failure resulted from the product's susceptibility to chemical degradation from the inside of the pipe or from its inability to withstand mechanical stress from the outside, or both, the product itself was the source of the leaking polybutylene systems and the resultant property damage. Indeed, both sides' experts agreed that the product was unsuitable for use in that type of system. Whether it was one condition or two that made the product unsuitable for use in polybutylene systems, is of no legal significance. The second alleged factual dispute arises from the second sentence of the occurrence definition in Stonewall's policies; namely that [a]ll such exposure to substantially the same general conditions existing at or emanating from one premises location shall be deemed one occurrence. Stonewall queries whether there was only one occurrence, because the relevant premises location was a plant in West Virginia where DuPont manufactured the product; or whether each of the 469,000 plus liability claims constituted a separate occurrence because each claim involved an individual building where polybutylene systems failed and damage occurred. Not surprisingly, Stonewall argues that the latter interpretation is the correct one. In E.I. du Pont de Nemours & Co. v. Admiral Ins. Co., [3] a Superior Court judge analyzed how other jurisdictions treated the number-of-occurrences issue and concluded that generally, an occurrence is determined by the cause or causes of the resulting injury. [4] Following that conclusion, the court adopted the commonly accepted [cause] test and reaffirmed the principle that where a single event, process or condition results in injuries, it will be deemed a single occurrence even though the injuries may be widespread in both time and place and may affect a multitude of individuals. [5] Consistent with Admiral, the motion judge here correctly identified and applied the cause test to the facts set forth by Stonewall and DuPont. Specifically, the judge held that when determining the number of occurrences in a products liability case, the [p]roper focus is ... on production and dispersalnot on the location of injury or the specific means by which injury occurred. Therefore, DuPont's production of an unsuitable product triggered only one single occurrence under the policies. Despite the judge's application of the reasoning in Admiral to the set of facts before him, Stonewall (relying on non-Delaware cases) contends that product manufacturers are subject to multiple occurrences findings in the property damage context. [6] We note that the courts in Stonewall's cases reached that result based on their interpretation of the specific policies at issue. Those cases did not apply the cause test, did not involve substantially similar policy language, and did not concern the same type of products liability issue facing DuPont. [7] Further, if Stonewall's interpretation of the occurrence provision is correct, then each separate claim would constitute its own separate occurrence. As a consequence, DuPont must first expend $50 million per occurrence for a total of approximately $23,450,000,000,000 before being entitled to look to its excess insurers. It is inconceivable to imagine 469,000 occurrences generating almost $24 trillion in damages. [8] Such an interpretation would produce an absurd, unacceptable result that would render meaningless the excess insurance purchased by DuPont and deprive DuPont of the protection for which it paid. Stonewall's policies are, by definition and by choice, occurrence-based policies, not claims-made policies. The use of the former instead of the latter signifies that neither DuPont nor Stonewall intended to base coverage on individual accidents that gave rise to claims. Rather, they intended to base coverage on the underlying circumstances (or occurrences) that resulted in the claims for damages. [9] Even if Stonewall's interpretation of the deemer [10] clause was somehow tenable, the motion judge correctly declined to require a jury trial, because Stonewall's argument does not involve any issues of fact. Whether the relevant premises location for purposes of determining the number of occurrences was the plant in West Virginia or each individual building where damage occurred, is not a factual issue. Rather, it involves the interpretation of policy language that is generally a question of law for the court and not a factual dispute for a jury to decide. [11] Accordingly, we hold that the motion judge correctly concluded that only a single occurrence triggered the Stonewall policies.