Number of occurrences is such an interesting issue.  There are no shortage of cases addressing it, but I wouldn’t mind a few more to address in CO.  The issue is like King Midas.  Not enough coverage?  In the right scenario, policyholders (or underlying plaintiffs) look for a solution by making more.  Find more occurrences.  It is an attempt at insurance alchemy.   

Number of occurrences was at issue in Western National Mutual Ins. Co. v. Rainbow Ranch Holdings, No. 23-05 (D. Mont. Nov. 20, 2023).  The court addressed coverage for Rainbow Ranch, which operates a hotel in Gallatin County, Montana.  Catharine Hudgens and her husband stayed there and experienced carbon monoxide exposure in their room.  Hudgens suffered injuries and her husband died from the exposure.

Rainbow Ranch was insured by Western National under a commercial general liability policy with a $1 million per occurrence limit and an umbrella policy with a $5 million limit and $20,000 in medical payments coverage.

Western National tendered the undisputed policy limits of $6,020,000, representing the sum of the $1 million per occurrence limit under the primary policy, the $5 million limit under the umbrella policy and $20,000 in medical payments.

The insurer sought a determination that its $1 million payment, under the primary CGL policy, satisfied its good faith obligations under Montana’s Unfair Trade Practices Act. 

The decision does not say this, but presumably the CGL policy had an aggregate limit greater than the $1,000,000 “occurrence” limit.  Hence, there was a need to know if there was more than one “occurrence” to reach the aggregate limit.  The umbrella policy was not at issue, likely because its $5,000,000 limit was both per “occurrence” and aggregate.

Having noted that the Montana Supreme Court has adopted the “cause” test for purposes of determining number of occurrences -- look to the cause or causes of the damage or injury rather than the number of injuries or claims -- the Rainbow Ranch court’s single “occurrence” decision was not surprising:

“Western National’s policy defines occurrence the same way as the policies in Casino West, Inc. and Scottsdale Ins. Co., including ‘continuous or repeated exposure to substantially the same general harmful conditions.’  The Underlying Litigation alleges faulty installation of the spa boiler, faulty maintenance of the boiler, and faulty construction of the room in which Hudgens stayed.  The Underlying Litigation also alleges that Rainbow Ranch failed to check on Hudgens and her husband when asked by concerned family members. These negligent acts allegedly led to a buildup of carbon monoxide. Hudgens’s bodily injuries and her husband’s death stem from one cause, carbon monoxide poisoning.”