Illinois Federal Judge John Robert Blakey, applying Illinois law, found that ten underlying actions were related, and thus, based on the policy language, constituted a single “Claim”.  Therefore, the policy at issue was exhausted because the insurer had already satisfied the single “Claim” limit.

Lloyd’s Syndicate 3624 (“Hiscox”) issued a renewal professional liability and general liability policy to Biological Resource Center of Illinois, LLC (“BRCI”).  Hiscox was funding the defense in ten cases brought against BRCI all involving the alleged unlawful mishandling and/or sale of human body parts.  Hiscox brought a coverage suit against BRCI seeking a declaration as to the scope of liability coverage.  Hiscox moved for partial summary judgment on the issue that the policy’s $2 million single “Claim” limit applied to all ten underlying cases, and therefore, it was no longer obligated to defend or indemnify BRCI because it had already satisfied the $2 million limit in defense costs.

Each of the underlying complaints alleged: (1) BRCI induced the plaintiffs to agree to donate the descendants’ remains for medical or scientific uses, but that BRCI instead sold, mishandled, and/or desecrated the remains; (2) BRCI breached its duties to the underlying plaintiffs to handle the decedents’ bodies with respect and to use the remains only for medical or scientific purposes; and (3) the plaintiffs discovered BRCI’s alleged wrongful conduct following a January 2015 raid on BRCI.

Per Hiscox’s policy, the limit of liability for professional liability was $2 million for “Each Claim” and $3 million “in the Aggregate for all Claims.”  The limit of liability included “Damages, Claim Expenses, and Supplemental Payments.”  The policy also provided that “All claims based upon or arising out of any and all continuous, repeated or related Wrongful Acts or Accidents committed or allegedly committed by one or more of the Insureds shall be considered a single Claim…”  “

The court’s analysis focused on the meaning of the word “related.”  The court determined that the concept of relatedness incorporates both logical and causal connections.  Thus, given the breadth of the term “related”, the court agreed with Hiscox that the underlying cases all arose out of BRCI’s alleged acts of mishandling decedents’ bodies, and that the alleged acts were “related” under the policy.  BRCI unsuccessfully argued that the underlying cases could not be considered a single “Claim” because some variation existed among the complaints.  The court found, however, that the underlying actions were related because “[e]ach of the underlying cases alleges a specific course of wrongdoing: BRCI’s unauthorized mishandling and/or sale of body parts.”  For the same reason, the court also rejected BRCI’s argument that the underlying cases cannot be considered a single “Claim” because they asserted different theories of liability.

Therefore, because the court held that the underlying cases constituted a single “Claim” under the policy, it also concluded that because Hiscox had satisfied the $2 million single “Claim” limit, the policy was exhausted, and Hiscox had no further duty to defend or duty to indemnify BRCI in the underlying cases. Lloyd’s Syndicate 3624 v. Biological Resource Center of Illinois, LLC, No. 18-cv-115 (N.D. Ill.  Sept. 19, 2018).