Addison Insurance Company v. Fay

Summary

The Illinois Supreme Court considered whether the deaths of two boys injured on an insured property constituted one or two occurrences under the property owner’s liability insurance policy. Applying a time-and-space test to the insured’s ongoing negligent omission, the court held that the insurer failed to prove the injuries were sufficiently linked to constitute a single occurrence. The court reversed the appellate court and affirmed the circuit court, subjecting the claims to the policy’s $2 million general aggregate limit.

Holdings

1. When the evidence before the trial court consists of depositions, transcripts, or evidence otherwise documentary in nature, and the trial court heard no live testimony, the reviewing court may review the record de novo and is not bound by the trial court's factual findings.
2. After the insured demonstrates that its claim falls within policy coverage, the insurer bears the burden of proving that a limitation applies; therefore, Addison bore the burden of proving that the two deaths constituted one occurrence subject to the lower per-occurrence limit.
3. Where an insured's negligence consists of an ongoing omission rather than separate affirmative negligent acts, the number of occurrences is determined using a time-and-space test: injuries are one occurrence only if their cause and result are simultaneous or so closely linked in time and space that an average person would consider them one event.
4. The deaths of Carr and Hodgins constituted two separate occurrences, and the claims were subject to the policy's $2 million general aggregate limit rather than the $1 million each-occurrence limit.
5. The court declined to decide whether an injured person's rescue attempt can constitute a separate intervening act under Nicor because the sequence and timing of events were too uncertain to support such a determination.

Questions Presented

1. What standard of review applies to factual findings based solely on deposition and documentary evidence when the trial court heard no live testimony?
2. Which party bears the burden of proving whether the accident constituted one or two occurrences under the insurance policy?
3. Whether the deaths of Justice Carr and Everett Hodgins constituted one occurrence or two separate occurrences under Parrish's insurance policy.
4. Whether Nicor should be extended to treat Hodgins's alleged rescue attempt as a separate intervening act increasing the insured's liability.

Disposition

reversed