Facts
- Harry Kurchner underwent cancer chemotherapy and feared resulting sterility.
- Before treatment, Harry and Suzanne Kurchner arranged for a medical facility to cryopreserve five sperm samples for potential future conception.
- The facility allegedly agreed to store samples in separate tanks with alarms but stored them together in one tank.
- The cooling apparatus failed, the storage tank warmed, and the sperm samples were destroyed.
- Harry became sterile due to chemotherapy.
- The Kurchners sued the facility for damages tied to the loss of the cryopreserved sperm.
- The facility was insured under a comprehensive business liability policy covering, among other things, “bodily injury” and “property damage”; “bodily injury” was defined as “bodily injury, sickness or disease sustained by a person.”
- The policy excluded property damage to personal property in the insured’s care, custody, or control.
- The insurer denied coverage and refused to defend; the facility sought declaratory relief on the insurer’s duties.
- The facility settled with the Kurchners, who assumed the facility’s rights against the insurer.
Issues
- Whether destruction of cryopreserved sperm stored outside the body constitutes “bodily injury” under a liability policy defining bodily injury as “bodily injury, sickness or disease sustained by a person.”
- If the loss is treated as property damage, whether coverage is barred by an exclusion for personal property in the insured’s care, custody, or control.
Decision
- The appellate court affirmed summary judgment for the insurer.
- The court held that sperm stored outside the body is personal property, not part of a person’s body, and its destruction is not “bodily injury” within the policy’s definition.
- The court further treated the claim, at most, as property damage to personal property in the insured’s care, custody, or control, which the policy excluded.
- As a result, the insurer owed no duty to defend or indemnify the insured for the underlying claim.
Legal Principles
- Unambiguous insurance policy terms are applied according to their plain meaning; courts do not rewrite coverage.
- “Bodily injury” coverage for injury, sickness, or disease “sustained by a person” does not extend to loss of biological material voluntarily removed from the body and stored externally.
- Human cells or tissue removed from the body and held in storage are treated as personal property for purposes of standard liability coverage analysis.
- A care-custody-or-control exclusion bars coverage for property damage to personal property while it is in the insured’s possession and control.
Conclusion
The court concluded that cryopreserved sperm destroyed while stored outside the body is personal property rather than “bodily injury” to a person under the policy, and that any resulting property-damage theory was excluded by the care-custody-or-control provision; therefore, the insurer had no duty to defend or indemnify.