It was an accident waiting to happen.  Christopher Davis, of Albany, Oregon, went into Fitch’s, a large drug store chain in the Pacific Northwest, to purchase diapers for his newborn daughter.  He found the right package and headed to the self-serve checkout.  With his credit card approved, the machine began to print a receipt.  And print.  And print.  And print.  When it at last came to a stop, Davis’s receipt was 53 inches long.

The portion of the paper that proved his purchase was two inches.  The rest was coupons for future purchases at Fitch’s, a solicitation to download the Fitch’s app to get even more coupons and coupons for local businesses, such as the car wash (save $2 on Tuesday), a pizza place (one free topping on Thursday) and nail salon (2 free fingers on Wednesday).  Lastly, in case the new father had extra time on his hands, there was a sudoku puzzle. 

Davis read the receipt as he exited the store and the lengthy paper became tangled in his feet.  He tripped and broke his wrist as he hit the ground.

Davis filed suit against Fitch’s, alleging that the drug store chain was negligent in providing such a long register receipt.  Davis’s complaint alleged that Fitch’s knew, or should have known, that a 53 inch register receipt could become entangled in a customer’s legs and cause him to fall.  As the complaint noted, the register receipt was 32 inches longer than has daughter for whom the diapers had been purchased.

Fitch’s sought coverage from its general liability insurers.  As a drug store chain, Fitch’s general liability insurance was handled by two policies – one policy was specifically limited to “products and completed operations,” given the pharmaceutical risks associated with the chain’s operations.  The other policy, issued with a “products and completed operations” exclusion, was designed to cover all other exposures.  Out of an abundance of caution, it was Fitch’s practice to always place both insurers on notice of claims.

However, both insurers denied coverage for Davis’s claim.  As the “products and completed operations” insurer saw it, Fitch was still in the store when he fell.  While he had completed his purchase of diapers, his presence in the store exposed him to other products and promotional displays as he existed.  Therefore, at the time of his fall, Davis was still a customer and his injury was not arising out of a completed operation.

The other insurer took a narrower approach, arguing that its “products and completed operations” exclusion applied.  An operation is “complete,” the insurer maintained, when the purpose of the customer’s visit – here, Davis buying diapers – is complete.  Therefore, Davis’s injury was clearly arising out of a completed operation.   

The two insurers agreed to jointly fund a settlement of the claim and file a coverage action in Linn County, Oregon circuit court to determine which is liable for the full settlement.  Cross motions for summary judgment have been briefed.  I’ll keep you posted.