Last week, the United States District Court for the Western District of Texas concluded that 124 separate cases of food poisoning caused by single restaurant over a four-day period was a single “occurrence” under the insurance policy. In Travelers Casualty Ins. Co. of America v. Mediterranean Grill & Kabob Inc., No. SA-20-CA-0040-FB, 2020 WL 6536163 (W.D. Texas [San Antonio Division], Nov. 4, 2020, mem. op.), Mediterranean Grill & Kabob Inc. d/b/a Pasha Mediterranean Grill (“Pasha”) operated a restaurant in San Antonio, Texas. Between August 29 and September 1, 2018, nearly 200 of Pasha’s customers contracted food poisoning from salmonella bacteria. The food poisonings gave rise to multiple lawsuits, each of which alleged that Pasha was negligent in the manufacture and preparation of the food. 

Travelers Casualty Insurance Company of America (“Travelers”) was Pasha's insurer at the time of the food poisonings.  The policy contained a $1 million “per occurrence” coverage limit.  The policy defined the term “occurrence” as “an accident, including continuous or repeated exposure to the same general harmful conditions.”

Travelers paid approximately $450,000 of its $1 million “per occurrence” limit to settle some of the claims.  However, Travelers’ offer to settle the remaining 124 claims for the remainder of the $1 million limit was rejected. Therefore, Travelers filed a declaratory judgment action against Pasha and the remaining 124 claimants to establish that the food poisoning cases were all a single “occurrence.”

The Western District concluded that the food poisonings were a single “occurrence” under the policy. The court began its analysis by noting that “the proper focus in interpreting ‘occurrence’ is on the events that cause the injuries and give rise to the insured's liability, rather than on the number of injurious effects.” The court reasoned that although Pasha’s closures each night and preparation of new batches of food paused or interrupted the poisonings, “only one cause gave rise to Pasha's liability, and that was Pasha's allegedly contaminated food.” The court further reasoned that “there was no allegation or evidence that Pasha returned to preparing food safely, allowed the food to become contaminated again, and then, because of Pasha's negligence, exposed more patrons to contaminated food.” Lastly, the court reasoned that the conclusion that there was only one “occurrence” was consistent with Texas case law, citing Evanston Insurance Co. v. Mid-Continent Casualty Co., 909 F.3d 143, 150 (5th Cir. 2018) (finding single “occurrence” when ongoing negligence of a runaway Mack truck was uninterrupted, continuing cause of a multi-vehicle accident, with no indication the driver regained control of the truck or that his negligence was otherwise interrupted between collisions) and Foust v. Ranger Insurance Company, 975 S.W.2d 329, 331 (Tex. App.–San Antonio 1998, writ denied) (finding single “occurrence” when a pilot dusting a farmer's fields with herbicide caused some of the herbicide to drift onto neighboring tracts of land, despite the fact that the dusting procedure required the plane to land for refueling on several occasions or change altitude).

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