Mitsui Sumitomo Ins. Co. ofAmericav. Duke University Health Sys. No. 11-2057, United States Court of Appeals for the Fourth Circuit. February 11, 2013
The Fourth Circuit held that Duke University Health System was limited to policy limits for one occurrence when a mishap occurred where surgical instruments were sterilized with elevator hydraulic fluid. The facts of the case involve elevator workers placing hydraulic fluid into buckets distributed to them by Duke University, which had originally stored surgical detergents. Duke employees then used the hydraulic fluid to clean surgical equipment. The surgical equipment was used in many surgeries and Duke eventually settled with 127 patients for an amount of $6 million.
The insured in this case was Automatic Elevator Co. Automatic Elevator had insurance which provided $1 million in coverage on a per accident basis, up to a maximum of $3 million aggregate. Duke argued that there were multiple occurrences and thus it was entitled to the $3 million aggregate amount. Duke argued that each instance of surgery which was performed utilizing an instrument sterilized by the elevator hydraulic fluid was an occurrence. Duke argued that the most immediate cause of injury resulted from the numerous surgeries.
In a 2-1 decision, the court disagreed with Duke, stating that “[b]ecause Automatic Elevator is the insured party, calculating the number of occurrences based on Duke’s conduct would contradict other courts’ conclusions that it is more appropriate to focus on the act of the insured that gave rise to their liability.” The court also found that the original error with the buckets was the act that linked the injuries together. Therefore, the court limited the amount the insurer had to pay to the limits for one occurrence.