The heyday of playing games with the definition of “occurrence” has passed but it remains a perennial pastime for those trying to inflate the value of an insurance policy.

Two apprentice linemen were injured when the power pole they were working on collapsed. They agreed to settle for the apprentice-programs’ policy limits. The question became what those limits were, so the carrier filed this declaratory judgment case to decide that.

The limits in the declarations were $1,000,000 per occurrence, $2,000,000 aggregate. Cincinnati said there was one occurrence, relying on the policy’s definition of “occurrence,” which is nowadays fairly standard language: “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” The claimants cited Helme (1987) for the proposition that the number of occurrences depends on the number of negligent acts, of which they counted five. The trial court agreed with Cincinnati.

The Court of Appeals affirms. There was clearly one accident and therefore one occurrence. Helme is inapplicable because in that case (in which injury was caused by the independent negligence of two physicians) the policy defined “occurrence” as “any incident, act, or omission,” or series of related acts or omissions, causing an injury. The opinion isn’t quite clear on how the claimants attempted to square that circle. They argued that the two policies were “functionally the same”; the court politely but firmly disagrees. And they suggested that Cincinnati’s policy language was an attempt “to avoid Helme“; the court notes this without comment but apparently the claimants really were saying, or at least implying, that the interpretation of a policy should depend not on what it says, nor even on what the drafters intended it to mean, but on their alleged bad motives for having it mean that.

(Opinion: Cincinnati Indemnity v. Southwestern Line Contractors)

We’ve blogged a number of notice-of-claim cases before. This one follows the established pattern: a defendant urging a strained construction of the statute and a plaintiff trying to get by it while saying as little as possible.

A community-college employee was allegedly harmed by mold in her place of employment. Her notice-of-claim letter set out multiple causes of action against multiple public entities but one settlement amount: she would “accept the sum of $450,000 as full and final settlement.” Yavapai College argued that this was defective, that the notice should have set forth a separate settlement amount as to it. Apparently (one has to read between the lines a bit here) the argument was that the stated settlement amount was so large that it must have been a total for several claims against several claimants rather than what the college alone could settle for. The trial court agreed and granted the college summary judgment.

The Court of Appeals reverses. The statute (12-821.01) requires a specific amount for which the case can be settled. Plaintiff’s notice provided that. “The . . . statute does not require that the . . . amount be objectively reasonable.” The defendant may not like that amount, in which case it can try to negotiate a better one, but “the public entity remains assured that, for the specific amount stated (reasonable or otherwise), it can satisfy its liability.”

We don’t mean to be too hard on Yavapai College; its position is understandable but would be better directed to the legislature.

(Opinion: Donovan v. Yavapai)