Applying Illinois law, a federal district court has held that ten lawsuits against an anatomical donation company for alleged mishandling and sale of human body parts are “related” and constitute a single “Claim” under a professional liability policy. Lloyd’s Syndicate 3624 v. Biological Res. Ctr. of Ill., LLC, 2018 WL 4489589 (N.D. Ill. Sept. 19, 2018).
Several individuals sued the donation company in ten underlying lawsuits alleging that it “sold, mishandled, and/or desecrated” the remains of decedents after inducing them to donate their remains for medical or scientific purposes. The donation company’s insurer provided a defense for all ten lawsuits subject to a reservation of rights. When defense costs exhausted the $2 million “Each Claim” limit of liability, the insurer sought a declaratory judgment that the lawsuits alleged “related Wrongful Acts or Accidents” and constituted a single Claim.
The court granted summary judgment for the insurer, holding that the insurer had no further duty to defend or indemnify the donation company. The court held that the underlying lawsuits constitute a single “Claim” subject to the “Each Claim” limit of liability. Under the policy, “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 focused its analysis on the meaning of the word “related.” Relying on Seventh Circuit and Illinois intermediate-court precedent, the court adopted a broad interpretation of the word, noting that it covers “a very broad range of connections, both causal and logical.” The court agreed with the insurer that the lawsuits arise out of “alleged acts of mishandling decedents’ bodies, and that these alleged acts are ‘related’ under the Policy.” The court acknowledged that the underlying complaints “vary in their precise wording,” but they all allege “related” acts and wrongdoing based on “the same specific course of conduct.”
The court rejected the donation company’s argument that the underlying lawsuits could not be considered a single “Claim” because there is “some variation” between them. Even though the lawsuits involved different factual circumstances—including allegations of mishandling or selling different decedents’ body parts at different times—they all alleged a “specific course of wrongdoing.” Likewise, the court declined to “stretch the reading of the word ‘related’ to require the underlying cases to allege the exact same theories of liability.” Thus, according to the court, the acts and wrongdoing alleged in all ten lawsuits are “related,” in “any meaningful sense of the word.”