Opinion ID: 1879737
Heading Depth: 1
Heading Rank: 3

Heading: The Occurrence Issue.

Text: The appellants contend their policies do not provide coverage because none of the conduct and damages alleged took place during the effective period of their policies. The district court concluded the time of an occurrence under the policies is the time when the claimant sustains actual damages and not the time when the act or omission that caused such damages was committed. Although the appellants did not raise the damage issue in the district court, Travelers did. Travelers argued that the damages, rather than the conduct, was the triggering event. It argued further that although the conduct occurred during its policy period, the damages occurred beyond that period and at a time when the appellants' policies were in force. The district court agreed, concluding that the damages, as alleged in the Iske-Nearmyer petition, occurred during the period when the [appellants'] policies were in effect, and that if there is any coverage, it is under the [appellants'] policies and not under the Travelers policy. Liability policies generally fall into two classifications: an occurrence policy and a claims made policy. The occurrence policy provides coverage if the event insured against (the occurrence) takes place within the policy period, regardless of when a claim is made. In contrast, a claims made policy provides coverage only if a claim of the insured's liability arising from a covered hazard is presented during the policy period. Annotation, Event As Occurring Within Period of Coverage of Occurrence and Discovery or Claims Made Liability Policies, 37 A.L.R. 4th 382, 390 (1985). The policies here are of the occurrence type. Most jurisdictions that have considered occurrence policies have concluded that the time of the occurrence is when the claimant sustains actual damage and not when the act or omission that caused such damage was committed. Id. at 390; see, e.g., Appalachian Ins. Co. v. Liberty Mut. Ins. Co., 676 F.2d 56 (3rd Cir.1982) (apparently applying Massachusetts and Pennsylvania law); Bartholomew v. Appalachian Ins. Co., 655 F.2d 27 (1st Cir.1981) (applying Rhode Island law); Kirkham, Michael & Assocs., Inc. v. Travelers Indem. Co., 493 F.2d 475 (8th Cir.1974) (applying South Dakota law); Kansas City Insulation Co. v. American Mut. Liab. Ins. Co., 405 F.2d 53 (8th Cir.1968) (applying Pennsylvania law); Nielson v. Travelers Indem. Co., 174 F.Supp. 648 (N.D.Iowa 1959) (applying Iowa law), aff'd, 277 F.2d 455 (8th Cir.1960); State v. Glens Falls Ins. Co., 125 Ariz. 328, 609 P.2d 598 (App.1980); Wolf Machinery Co. v. Insurance Co. of N. Am., 133 Cal.App.3d 324, 183 Cal.Rptr. 695 (1982); Samuelson v. Chutich, 187 Colo. 155, 529 P.2d 631 (1974); Tiedemann v. Nationwide Mut. Fire Ins. Co., 164 Conn. 439, 324 A.2d 263 (1973); National Aviation Underwriters, Inc. v. Idaho Aviation Center Inc., 93 Idaho 668, 471 P.2d 55 (1970); Great Am. Ins. Co. v. Tinley Park Recreation Comm'n, 124 Ill.App.2d 19, 259 N.E.2d 867 (1970); United States Fidelity & Guar. Co. v. American Ins. Co., 169 Ind.App. 1, 345 N.E.2d 267 (1976); Scott v. Keever, 212 Kan. 719, 512 P.2d 346 (1973); Oceanonics, Inc. v. Petroleum Distrib. Co., 280 So.2d 874 (La.App.1973); Moss v. Shelby Mut. Ins. Co., 105 Mich.App. 671, 308 N.W.2d 428 (1981); Singsaas v. Diederich, 307 Minn. 153, 238 N.W.2d 878 (1976); Dennis Cain Motor Co. v. Universal Underwriters Ins. Co., 614 S.W.2d 275 (Mo.App.1981); Peerless Ins. Co. v. Clough, 105 N.H. 76, 193 A.2d 444 (1963); Paterson Tallow Co., Inc. v. Royal Globe Ins. Cos., 89 N.J. 24, 444 A.2d 579 (1982); American Motorists Ins. Co. v. E.R. Squibb & Sons, Inc., 95 Misc.2d 222, 406 N.Y.S.2d 658 (Sup.Ct.1978); see also 7A J.A. Appleman, Insurance Law and Practice § 4491.01, at 5 (W.F. Berdal ed. 1979). Very few jurisdictions hold that the act causing the damage is the triggering event. See, e.g., Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis.2d 722, 351 N.W.2d 156 (1984). The policies here are in accord with the majority view. The multi-peril policy defines occurrence as an accident ... which results in bodily injury or property damage. The policy defines bodily injury as bodily injury, sickness or disease sustained by any person which occurs during the policy period.  (Emphasis added.) The umbrella policy indemnifies for personal injuries and property damage caused by or arising out of each occurrence happening anywhere in the world, during the policy period.  (Emphasis added.) The policy defines occurrence as an accident or a happening or event or a continuous or repeated exposure to conditions which unexpectedly and unintentionally results in a personal injury, property damage or advertising liability during the policy period.  (Emphasis added.) We agree with the district court and First Newton that the petition alleges damages that occurred while both policies were in effect. Both policies insured First Newton from February 22, 1984 to February 22, 1985. First Newton started foreclosure proceedings against Iske Farms, Inc., and Nearmyer Farms, Inc., on December 18, 1984, during the period of both policies. On January 4, 1985, the Iskes and the Nearmyers joined in a petition against First Newton. They also filed counterclaims against First Newton in the foreclosure actions. The petition and counterclaims were identical. The petition alleges damages as of its filing date. The petition seeks damages on behalf of the Iskes and the Nearmyers for loss of real property, loss of personal property, actual or threatened loss of homes, severe emotional distress, and loss of the farming businesses, including loss of income. The petition further alleges that [b]eginning on June 21, 1984, the equipment, livestock, and other [personal] property ... were taken from the premises of Iske Farms, Inc., at the direction of Dr. Wiltfang. The petition also alleges that [o]n July 5, 1984, Dr. Wiltfang caused Iske Farms, Inc., to sell all of its real property, machinery, livestock, and other property to Beef Barons, Inc. for $2.00. As far as allegations of damages regarding the Nearmyers, the petition alleges that [o]n July 3, 1984, Beef Barons, Inc., and Nearmyer Acres, Inc., gave notice to Carroll Nearmyer of their intention to liquidate the assets of Nearmyer Acres, Inc. The petition also alleges that [o]n or about November 16, 1984, Nearmyer Acres, Inc., commenced an action in replevin which required immediate possession of farm machinery and livestock. We believe these are sufficient allegations of property and bodily injury damages occurring within the effective dates of the policies.