(CN) - The negligence fight over elevator hydraulic fluid mistakenly used to clean surgical tools should not involve the elevator company's insurer, the 4th Circuit ruled.
American Elevator Co. had removed the hydraulic fluid from a hospital elevator it was renovating for Duke University Health System in 2004. Duke had provided the 15-gallon barrels to store the fluid, but it previously used those now-empty containers to store surgical detergents.
After American Elevator left the refilled containers in its designated storage area on the Duke parking deck, a Duke employee mistook them for surgical detergents or lubricants, and the fluids were used to wash surgical instruments in November and December 2004.
Duke has paid more than $6 million to resolve claims over the tainted instruments, which may have been used on any of 3,650 patients.
As for the claims against Automatic Elevator, its insurer, Mitsui Sumitomo Insurance Co. of America, paid $1 million under its policy limit.
After Duke sued Automatic Elevator for breach of contract, indemnity, and negligence, Mitsui filed a complaint for declaratory judgment.
The insurer said it had already paid out its policy limit since American Elevator's allegedly negligent storage of the barrels constituted a single occurrence.
Though Duke argued that the mistake involved multiple occurrences, a federal judge in Greensboro, N.C., ultimately found that Mitsui no longer needed to defend or indemnify either Duke or Automatic Elevator.
A divided three-judge panel of the 4th Circuit affirmed Monday.
"Looking at the number of surgeries or instances of using hydraulic fluid to wash surgical instruments to determine the number of occurrences would turn the focus from Automatic Elevator's alleged negligence to Duke's actions," Judge Henry Floyd wrote for the panel in Richmond, Va.
In a dissenting opinion, Judge Robert King said Mitsui should have been held liable for the full $6 million.
"Automatic Elevator, after servicing the Duke Health parking garage, intentionally left the barrels of used hydraulic fluid in the parking lot," King wrote. "Those actions do not satisfy the definition of an accident and thus, at that point, there had been no occurrence. When scores of surgeries were conducted using instruments that had been 'cleaned' with the content of those barrels, however, there were multiple occurrences, as each of the surgeries caused severe injury and damage."
He added: "Insurance coverage for such injuries is what the policy is all about."
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