The opinion of the court was delivered by: William T. Hart, District Judge.
MEMORANDUM OPINION AND ORDER
This action is brought by Aetna Casualty & Surety Company of
Illinois ("Aetna"), an "excess" liability insurer, against The
Medical Protective Company of Fort Wayne, Indiana ("Medpro")
the primary liability insurer of a physician specializing in
pediatrics. The matter is currently before the Court upon
cross motions for summary judgment. Because of the superlative
efforts of both parties to narrow the issues presented, the
Court has been provided with a comprehensive stipulation of
the underlying facts. Those stipulations render this action a
proper one for summary disposition.
This dispute among the primary and excess liability insurers
arises from a judgment of $1,500,000 entered by an Illinois
Circuit Court*fn1 against the insured pediatrician for
medical malpractice. The plaintiff in that malpractice action,
Janice Thurston, was stricken with glaucoma and blinded as a
result of continuous exposure to a drug prescribed by her
pediatrician over a period of two years.
The series of events at issue began on August 1, 1972, when
Mrs. Thurston brought her daughter Janice to their
pediatrician's office. Janice was suffering from
conjunctivitis, an inflammation of the mucous membrane which
lines the eyelids and the front portion of the eyeball. On
that occasion, the doctor prescribed Neodecadron ointment, to
be applied topically to the inside of the eyelid.
Neodecadron contains a steroid which, when used continuously
for extended periods, can elevate the pressure within the
eyeball (intraocular pressure). Such pressure elevation is
called steroid induced glaucoma. Janice Thurston's use of
Neo-decadron was continuous and extended, resulting in a sharp
increase in her intraocular pressure, damage to her optic
nerves, and ultimately, blindness.
Janice Thurston returned to see her pediatrician on several
occasions after the initial visit of August 1, 1972. Not all
of these visits dealt with her recurring conjunctivitis. There
was a visit on April 30, 1973, three visits during the summer
of 1973, a visit on November 5, 1973 and a final visit on June
27, 1974. During the course of this nearly two year period,
six refills of the original Neodecadron prescription were
authorized. On no occasion did Janice's pediatrician check her
intraocular pressure. Indeed, the stipulated facts indicate
that the doctor never reexamined Janice's eyes in any way
until the final visit in June of 1974 and failed to properly
monitor Janice's usage of Neodecadron. The stipulations
indicate that there was little, if any discussion of her usage
of the drug, only a series of refilled prescriptions.
Aetna and Medpro have joined issue over whether this series
of events constitutes a single "occurrence" or a series of
several "occurrences" within the terms of Medpro's liability
insurance contract. Should the events comprise a single
"occurrence," Medpro's liability on the policy would be
limited to $200,000. However, if they are instead a series of
"occurrences," Medpro's liability could rise as high as
$1,200,000, the annual policy limit for each of two
years. Aetna's liability as excess insurer would, of course,
Whether the events in question are properly characterized as
a single "occurrence" or multiple is a question of causation.
A series of related injuries comprise a single "occurrence,"
for the purposes of an insurance contract, where they all flow
from a single cause. See, e.g., Appalachian Ins. Co. v. Liberty
Mutual Ins. Co., 676 F.2d 56, 61-62 (3d Cir. 1982) (series of
backpay awards arising from a single discriminatory company
policy constitute a single occurrence). Where each injury
results from an independent cause, there are a series of
"occurrences." See, e.g., Liberty Mutual Ins. Co. v. Rawls,
404 F.2d 880 (5th Cir. 1968) (Second collision after driver of
vehicle regained control a separate occurrence from first
collision). Here, Aetna argues that Janice's pediatrician
regained control over the situation each time Janice visited
the office. Therefore each prescription was the result of an
But the stipulated facts indicate that Janice's pediatrician
never regained "control" over the situation. Indeed, the
theory of malpractice upon which the Thurstons prevailed in
state court was that her doctor failed to properly control
Janice Thurston's usage of Neodecadron. The original diagnosis
of Janice's conjunctivitis was never reevaluated. Nor did her
doctor ever attempt to discern whether Janice's usage of the
drug had exceeded safe levels. During the subsequent series of
office visits, many for standard childhood "cuts and bruises,"
attention was focused only rarely upon Janice's conjunctivitis
and her use of Neodecadron. While opportunities to regain
control may have presented themselves, they were never
exercised by a reevaluation of the original diagnosis or the
original form of treatment that was prescribed.
Absent some independent evaluation of the prior diagnosis
and treatment, the succeeding office visits cannot be regarded
as the causes of the prescription refills. To so characterize
these events would be to cut short the search for the cause of
Janice's injury. There was one diagnosis and one course of
treatment prescribed. All prescription refills and all the
resulting injuries to Janice Thurston flowed from that single
"occurrence" just as surely as the back-pay awards flowed from
the single policy of discrimination in Appalachian Ins. Co.
There, as here, only one decision was made. Any subsequent acts
simply implemented that prior decision.
Further, the Court notes that Aetna's notion of "injury" is
a very troubling aspect of its argument. Underlying Aetna's
argument that each office visit was a separate occurrence is
an argument that each application of Neodecadron to Janice's
eyes resulted in independent, compensable injuries. Accepting
this controversial position as true, the Court is still unable
to ascertain the extent of each of these independent injuries.
A trained opthamologist examined Janice on December 20, 1973,
after she had applied five of the seven prescribed tubes of
Neodecadron. That examination revealed no elevation of
intraocular pressure, no damage to the optic nerves. Therefore,
even if each office visit were an occurrence that caused some
injury to Janice's eyes, there is no proof that the extent of
these injuries met or exceeded Medpro's $200,000 per occurrence
policy limit. Even if the Court were convinced that there were
a series of "occurrences" under the Medpro policy, summary
judgment for Aetna would be inappropriate absent proof of the
extent of damages resulting from each occurrence.
Since the malpractice award resulted from a single
occurrence, as defined in the Medpro insurance policy, Aetna
is not entitled to any amount in excess of the $200,000
previously paid by Medpro.
IT IS THEREFORE ORDERED that
(1) Aetna's motion for summary judgment is ...