                              UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT


                              No. 11-2057


MITSUI SUMITOMO INSURANCE COMPANY OF AMERICA,

                 Plaintiff - Appellee,

           v.

DUKE UNIVERSITY HEALTH SYSTEM, INC.,

                 Defendant - Appellant,

           and

AUTOMATIC ELEVATOR COMPANY, INC.,

                 Defendant.



Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro.  L. Patrick Auld,
Magistrate Judge. (1:09-cv-00480-LPA-LPA)


Argued:   October 25, 2012                  Decided:   February 11, 2013


Before KING and FLOYD, Circuit Judges, and R. Bryan HARWELL,
United States District Judge for the District of South Carolina,
sitting by designation.


Affirmed by unpublished opinion. Judge Floyd wrote the majority
opinion, in which Judge Harwell joined.     Judge King wrote a
dissenting opinion.


ARGUED: Charles Holton, WOMBLE CARLYLE SANDRIDGE & RICE, PLLC,
Durham, North Carolina, for Appellant.  Richard H. Nicolaides,
Jr., BATES CAREY NICOLAIDES, LLP, Chicago, Illinois, for
Appellee. ON BRIEF: Julie B. Bradburn, WOMBLE CARLYLE SANDRIDGE
& RICE, PLLC, Raleigh, North Carolina; Hada de Varona Haulsee,
WOMBLE CARLYLE SANDRIDGE & RICE, PLLC, Winston-Salem, North
Carolina, for Appellant.     Barbara I. Michaelides, Paula M.
Carstensen, BATES CAREY NICOLAIDES, LLP, Chicago, Illinois, for
Appellee.


Unpublished opinions are not binding precedent in this circuit.




                                2
FLOYD, Circuit Judge:

     In   2004,   Appellant    Duke   University        Health   System,      Inc.,

engaged Automatic Elevator Company to renovate two elevators in

a hospital’s parking deck.           After Automatic Elevator completed

its work, it placed barrels full of used hydraulic fluid in its

designated storage area at the hospital.            Duke employees saw the

barrels, mistakenly thought they contained surgical detergents

and lubricants, and ultimately used the hydraulic fluid to wash

hundreds of surgical instruments.             Approximately 127 patients

who may have come into contact with the tainted instruments sued

Duke, who settled the claims for over $6 million.                     Duke then

sued Automatic Elevator.        Thereafter, Appellee Mitsui Sumitomo

Insurance   Company     of    America—Automatic          Elevator’s     insurer—

brought this action seeking a declaratory judgment that it owed

no further obligation to Automatic Elevator.                 Mitsui Sumitomo

argued    that    the   hydraulic     fluid      mistake    constituted        one

“occurrence,”     obligating    it    to   pay     $1    million      under    the

applicable insurance policy, which it had already paid to settle

the surgical patients’ claims against Automatic Elevator.                      The

district court agreed, and we now affirm.




                                       3
                                         I.

                                         A.

      We draw the following facts from Duke and Mitsui Sumitomo’s

stipulations of fact, dated June 15, 2010.                       From 1978 to 2004,

Automatic     Elevator     worked       with    Duke        on    various       elevator

projects.       In   keeping     with    this       arrangement,         Duke    engaged

Automatic    Elevator     to   renovate       two    elevators      in    Duke    Health

Raleigh     Hospital’s    (DHRH)    parking         deck.        Automatic      Elevator

began its work on the first elevator (Elevator 1) in April 2004,

and   the    North    Carolina     Department         of    Labor    inspected      and

approved its work on June 24, 2004.                    In July 2004, Automatic

Elevator     commenced     its     renovation        of     the    second       elevator

(Elevator 2).        The North Carolina Department of Labor approved

its work on Elevator 2 on September 15, 2004.

      During Automatic Elevator’s work on Elevator 1, Duke made

available several empty fifteen-gallon plastic barrels.                            These

barrels     previously    contained      surgical         detergents      called    “Mon

Klenz” and “Klenzyme” and a surgical lubricant known as “Hinge

Free,” which Duke had purchased from Cardinal Health 200, Inc.

As part of Automatic Elevator’s renovation of Elevator 1, it

removed hydraulic fluid from the elevator and stored it in the

plastic barrels.         Automatic Elevator’s employees then disposed

of the hydraulic fluid at a waste disposal site.                           During the

course of Automatic Elevator’s work on Elevator 2, it used the

                                         4
same    plastic     barrels    to    store       hydraulic       fluid     from    that

elevator.

       When    Automatic      Elevator         completed    its     renovation       of

Elevator 2, it left the barrels containing hydraulic fluid in

its designated storage area at DHRH’s parking deck.                              A DHRH

employee      saw   the   barrels    and       mistakenly    thought       that    they

contained     surgical     detergents      and       lubricants.     The     employee

therefore contacted Cardinal and asked it to return the barrels

to Cardinal’s warehouse, and Cardinal complied with the request.

On November 4, 2004, Cardinal sold the barrels to DHRH, Durham

Regional Hospital (DRH), and two other hospitals, believing that

they contained surgical detergents and lubricants rather than

hydraulic fluid.          The barrels that Cardinal delivered to DHRH

and DRH were labeled “Mon Klenz.”

       After receiving the deliveries from Cardinal, employees at

DHRH    and   DRH   mistakenly      used       the   hydraulic     fluid    to    clean

surgical instruments.         At DRH, hundreds of surgical instruments

came into contact with the hydraulic fluid when employees used

hydraulic fluid in three different washing machines in December

2004.      Hundreds of surgical instruments were also exposed to

hydraulic fluid at DHRH, where employees used hydraulic fluid in

two different washing machines in November and December 2004.

Duke employees discovered the error in late December 2004 and

sent letters explaining the situation to 3,650 surgical patients

                                           5
who may have come into contact with the affected instruments.

Approximately      150    of       these      patients        asserted    claims     against

Duke,    Cardinal,      and    Automatic             Elevator,    alleging      negligence,

negligent       infliction         of    emotional           distress,     and      loss     of

consortium.        By May 2008, Automatic Elevator had settled with

every individual who brought a claim against it.                             Duke entered

into    settlement      agreements         with        approximately      127    claimants,

resolving its liability for over $6 million.



                                               B.

       Mitsui Sumitomo issued two insurance policies to Automatic

Elevator    that    coincide        with       the     time    periods    when    Automatic

Elevator    worked      on    the       two    DHRH     elevators:         the   2003-2004

policy, which was effective from August 1, 2003, to August 1,

2004, and the 2004-2005 policy, which was effective from August

1, 2004, to August 1, 2005.                   Both policies include a $1 million

limit     for    “any        one    occurrence.”                 The     policies     define

“occurrence” as “an accident, including the continuous repeated

exposure    to     substantially           the       same     harmful    condition,”       but

neither policy defines “accident.”                          The policies include a $3

million    aggregate         limit,      and     both       policies     contain     a     “per

elevator” endorsement that applies the aggregate limit to “each

and every elevator . . . that is either serviced, repaired,

installed, renovated, refurbished or worked upon by [Automatic

                                                 6
Elevator] during the policy period.”                      Thus, if the hydraulic

fluid mistake involved at least three occurrences and the “per

elevator” endorsement applies, Mitsui Sumitomo is obligated to

pay $6 million on Automatic Elevator’s behalf.

     After    settling      the    tort     claims     against      it,    Duke     sued

Automatic    Elevator      for     breach     of     contract,      indemnity,       and

negligence    in   the    General     Court     of     Justice,     Superior      Court

Division, in Wake County, North Carolina, in a case styled Duke

University Health System, Inc. v. Automatic Elevator Co., Inc.,

Case No. 08 CVS 011270.              That court stayed the case, which

remains pending.      Mitsui Sumitomo then brought this suit against

Automatic Elevator and Duke, seeking a declaratory judgment that

it owed no further defense or indemnity obligation to Automatic

Elevator    because   the       insurance     policy      set   a   $1    million    per

occurrence limit, which Mitsui Sumitomo satisfied when it paid

$1 million to settle the claims that surgical patients brought

against Automatic Elevator.            To support its contention, Mitsui

Sumitomo argued that Automatic Elevator’s alleged negligence in

storing the barrels was a single “occurrence” under the policy.

Mitsui     Sumitomo      also     contended        that     the     “per    elevator”

endorsement did not apply because Automatic Elevator serviced

only one elevator—Elevator 2—during the 2004-2005 policy year.

Mitsui Sumitomo and Duke each moved for summary judgment.



                                          7
      The    district       court    entered       judgment     in    favor     of    Mitsui

Sumitomo,      finding         that       Automatic         Elevator’s          negligence

constituted one occurrence and the “per elevator” endorsement

did not apply.           Mitsui Sumitomo Ins. Co. of Am. v. Automatic

Elevator     Co.,     No.     1:09-CV-00480,         2011     WL      4103752,       at    *14

(M.D.N.C. Sept. 13, 2011).                  The district court also held that

this case involves only the 2004-2005 policy, a finding that

Duke does not dispute.              Id.     Duke timely appealed,             and we have

jurisdiction pursuant to 28 U.S.C. § 1291.                         Automatic Elevator

has   been    administratively            dissolved      by     the     North     Carolina

Secretary of State and is not a party to this appeal.



                                             II.

      Pursuant      to    Rule      56(a)    of    the   Federal       Rules     of       Civil

Procedure, summary judgment is appropriate only if “there is no

genuine     dispute      as   to    any     material     fact   and     the     movant       is

entitled to judgment as a matter of law.”                             A district court

considering a summary judgment motion must view the facts in the

light most favorable to the non-moving party.                         United States v.

Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam).                                Because

we review de novo the district court’s decision to grant Mitsui

Sumitomo’s motion for summary judgment, we must use the same

standard that applies at the district court level.                                   Shaw v.

Stoud, 13 F.3d 791, 798 (4th Cir. 1994).

                                              8
      We are sitting in diversity, so the choice of law rules of

the state in which the district court sat—North Carolina—apply

in this case.        Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S.

487, 496-97 (1941).          Under North Carolina law, the law of the

place where the contract was made governs a contract dispute.

Fast v. Gulley, 155 S.E.2d 507, 509-10 (N.C. 1967).                       Automatic

Elevator and Mitsui Sumitomo executed the insurance contract at

issue    in   this   case    in    North    Carolina.        Consequently,    North

Carolina law applies, and “our role is to apply the governing

state law, or, if necessary, predict how the state’s highest

court would rule on an unsettled issue.”                   BP Prods. N. Am., Inc.

v. Stanley, 669 F.3d 184, 188 (4th Cir. 2012) (quoting Horace

Mann Ins. Co. v. Gen. Star Nat’l Ins. Co., 514 F.3d 327, 329

(4th Cir. 2008)) (internal quotation marks omitted).



                                          III.

      Duke    alleges      that    the   hydraulic    fluid     mistake   involved

multiple occurrences, entitling Automatic Elevator to more than

$1   million     under    the     2004-2005      policy.      Specifically,      Duke

argues    that   (1)      Automatic      Elevator’s    decision     to   leave   the

barrels in its designated storage area at DHRH cannot constitute

an   occurrence      in    and    of   itself     because    that   choice   was   a

“volitional act” rather than an “accident” and (2) the district

court should have looked to the “most immediate cause” of the

                                           9
injury—such as each surgery or each use of hydraulic fluid to

wash     surgical       instruments—to          determine       the      number     of

occurrences.        For the reasons we outline below, the district

court    correctly     determined      that    the   hydraulic       fluid    incident

involved a single occurrence.



                                          A.

       Automatic       Elevator’s         insurance         policy     defines      an

“occurrence” as an “accident.”             Duke therefore contends that the

“question of how many occurrences there are is answered in the

most straight-forward fashion by counting how many accidents, or

unforeseen events, occurred and resulted in injury.”                      To support

its    argument    that    this    case    involves     multiple      accidents    and

hence multiple occurrences, Duke looks to two definitions of the

word     “accident.”         First,       Black’s     Law     Dictionary       defines

“accident”     as      “[a]n      unintended      and       unforeseen       injurious

occurrence; something that does not occur in the usual course of

events or that could not be reasonably anticipated.”                           Black’s

Law Dictionary 15 (8th ed. 2004).                    Second, in Gaston County

Dyeing    Machine    Co.   v.     Northfield      Insurance     Co.,    the    Supreme

Court of North Carolina defined “accident” as an “unplanned and

unforeseen     happening          or   event,     usually       with     unfortunate

consequences.”         524 S.E.2d 558, 564 (N.C. 2000).                      Duke then

juxtaposes     these      definitions      with      Black’s    Law    Dictionary’s

                                          10
definition     of   “volition”—“[t]he       ability     to   make       a   choice     or

determine      something; . . . the         act   of    making      a       choice    or

determining something”—and concludes that Automatic Elevator’s

volitional act of leaving the barrels in its storage space could

not be an accident.         Black’s Law Dictionary 1605 (8th ed. 2004).

Although this semantic argument is intriguing, it lacks merit.

     Contrary       to   Duke’s   assertions,     North      Carolina        precedent

indicates that the definition of “accident” has no bearing on

the number of occurrences.            Instead, the cases that Duke cites

prove   that    the      definition   of     “accident”      is     relevant         when

determining whether the insurance company must provide coverage

at all or pinpointing the date an event triggered coverage.                          See

Gaston Cnty., 524 S.E.2d at 564-65 (considering whether there

was an occurrence and the trigger of coverage date); Waste Mgmt.

of Carolinas, Inc. v. Peerless Ins. Co., 340 S.E.2d 374, 379-380

(N.C. 1986) (whether there was an occurrence); Alliance Mut.

Ins. Co. v. Guilford Ins. Co., 711 S.E.2d 207 (N.C. Ct. App.

2011) (unpublished table decision) (trigger of coverage date);

Davis v. Dibartolo, 625 S.E.2d 877, 880-83 (N.C. Ct. App. 2006)

(whether there was an occurrence); McCoy v. Coker, 620 S.E.2d

691, 694-95 (N.C. Ct. App. 2005) (same); Wash. Hous. Auth. v.

N.C. Hous. Auths. Risk Retention Pool, 502 S.E.2d 626, 630 (N.C.

Ct. App. 1998) (same); City of Wilmington v. Pigott, 307 S.E.2d

857, 859 (N.C. Ct. App. 1983) (same).                  Because Mitsui Sumitomo

                                       11
does not dispute the trigger of coverage date or whether the

hydraulic    fluid   mistake    constituted     an    occurrence,      Duke’s

definitional argument is misplaced.            As discussed below, the

Supreme Court of North Carolina has adopted a specific test for

calculating the number of occurrences.



                                    B.

     North    Carolina     courts   have    adopted    a   cause    test   to

determine how many occurrences an event encompassed.               See Gaston

Cnty., 524 S.E.2d at 565.        Under this type of test, the number

of occurrences “is determined by the cause or causes of the

resulting injury.”       Appalachian Ins. Co. v. Liberty Mut. Ins.

Co., 676 F.2d 56, 61 (3d Cir. 1982).           The cause test stands in

opposition to the effect test, which treats each injury as a

separate     occurrence.       Michael     Murray,    Note,   The    Law   of

Describing Accidents: A New Proposal for Determining the Number

of Occurrences in Insurance, 118 Yale L.J. 1484, 1499 (2009).

Therefore, to determine how many occurrences stemmed from the

hydraulic fluid mistake, we must evaluate the cause or causes of

the incident rather than its effects.

     Courts have adopted various formulations of the cause test.

Under the “proximate cause theory,” courts consider an event to

constitute one occurrence when “there was but one proximate,

uninterrupted, and continuing cause which resulted in all of the

                                    12
injuries and damage.”             Id. at 1496 (quoting Appalachian Ins.

Co., 676 F.2d at 61) (internal quotation marks omitted).                              In

contrast, courts employing the “liability event theory” look to

the immediate event or events that gave rise to liability to

determine the number of occurrences.                   Id. at 1497.      For example,

in Michigan Chemical Corp. v. American Home Assurance Co., the

Sixth Circuit held that each shipment of toxic flame retardant

that had been mislabeled as animal feed supplement qualified as

a   separate     occurrence,      even    though   the       problem   arose   from    a

single event:          the mislabeling itself.            728 F.2d 374, 383 (6th

Cir.   1984).         Duke    implies    that   North     Carolina’s     courts    have

adopted the liability event theory because it argues that they

look to “the most immediate cause of the injury” to calculate

the number of occurrences.                The district court rejected this

approach and employed the proximate cause theory, finding that

the “proper application of the cause approach . . . requires

asking which negligent act, or continuum of negligent acts, on

the    part    of     the    insured    gave    rise    to    liability.”      Mitsui

Sumitomo, 2011 WL 4103752, at *13.                      As discussed below, the

district court did not err in making this determination.

       Duke argues extensively that Gaston County Dyeing Machine

Co. v. Northfield Insurance Co. supports its argument that the

Supreme       Court    of    North     Carolina    determines      the    number      of

occurrences by pinpointing the most immediate cause or causes of

                                           13
the harm.     In Gaston County, the Supreme Court of North Carolina

considered     whether     the     rupture      of   a    pressure     vessel        and   the

resulting contamination of multiple lots of medical imaging dye

qualified     as    a     single    occurrence           or    multiple      occurrences.

However, rather than engaging in this inquiry to determine how

much the policy obligated the insurer to pay, the court was

evaluating     whether      the    incident      had      triggered       one    insurance

policy or multiple policies.               524 S.E.2d at 565.             Duke contends

that Gaston County supports its position that the Supreme Court

of    North   Carolina     looks    to    the    most         immediate   cause      of    the

injury to determine the number of occurrences because the court

considered the valve rupture—not more remote causes, such as the

vessel’s defective design or manufacturing—to be the accident.

       Duke’s reliance on Gaston County is inappropriate for at

least two reasons.         First, as noted above, Duke implies that the

Gaston County court actively considered whether it was the valve

rupture or the product defects that constituted the occurrence.

However,      the       court     never    analyzed            this   issue,         instead

considering only whether the valve rupture was an occurrence at

all    and,   if    so,   when     it    happened.            524   S.E.2d      at   564-65.

Second, Duke overlooks the Gaston County court’s conclusion that

the incident involved a single occurrence because, when “all

subsequent damages flow from the single event, there is but a

single occurrence.”             Id. at 565.          This statement evokes the

                                           14
proximate cause theory.                 Consequently, even if Gaston County

applies to this case—which is debatable in light of its focus on

the    trigger       of    coverage      issue—it           does   not     support        Duke’s

argument.

       Both    the    district         court    and     Mitsui      Sumitomo       relied     on

Christ Lutheran Church v. State Farm Fire & Casualty Co. as an

indication       that      North       Carolina’s        courts         have     adopted    the

proximate cause theory.                 471 S.E.2d 124 (N.C. Ct. App. 1996).

In Christ Lutheran, a North Carolina appeals court concluded

that     multiple         acts    of     embezzlement          constituted         a      single

occurrence.      Id. at 126.           However, the insurance policy at issue

in that case defined an “occurrence” as “[a]ll loss involving a

single act, or series of related acts, caused by one or more

persons,”      and the court was specifically concerned with whether

the acts of embezzlement were a “series of related acts.”                                   Id.

at 125-26 (internal quotation marks omitted).                                  The insurance

policy    at   issue       in    this    case        contains      no    similar        grouping

language, so the district court erred in using Christ Lutheran

to determine the number of occurrences in this case.

       In light of the distinctions between Gaston County’s and

Christ    Lutheran’s            holdings       and    this      case,      North        Carolina

precedent      does       not     strongly       favor       either       Duke     or     Mitsui

Sumitomo.        However,         we   believe        the    Supreme      Court     of     North

Carolina would find that this case involves one occurrence for

                                               15
three reasons.            First, there is no reason to suspect that the

Supreme Court of North Carolina would not apply the test that it

enunciated         in     Gaston    County        to     determine       the       number     of

occurrences         in     contexts    other           than    trigger        of    coverage.

Numerous other courts have applied a similar test to determine

the    number      of    occurrences       in   cases         analogous    to      this     one,

including     the        United    States    District          Court    for    the    Eastern

District of North Carolina in a case interpreting North Carolina

law.    See W. World Ins. Co. v. Wilkie, No. 5:06-CV-64-H, 2007 WL

3256947,      at    *4-5    (E.D.N.C.       Nov.       2,     2007);    see    also,      e.g.,

Fireman’s Fund Ins. Co. v. Scottsdale Ins. Co., 968 F. Supp.

444,    448     (E.D.      Ark.    1997)    (concluding          that     preparation         of

contaminated food was one occurrence despite multiple sales of

that food); Doria v. Ins. Co. of N. Am., 509 A.2d 220, 224-25

(N.J. Super. Ct. App. Div. 1986) (holding that insureds’ failure

to properly fence their pool was one occurrence regardless of

the number of resulting injuries).                      Second, Koikos v. Travelers

Insurance Co., 849 So.2d 263 (Fla. 2003)—the primary case that

Duke relies on to support its contention than an occurrence is

the “most immediate cause of the injury”—has been discredited by

other courts.            See Wilkie, 2007 WL 3256947, at *3-4 (declining

to apply Koikos in part because it was inconsistent with Gaston

County); Donegal Mut. Ins. Co. v. Baumhammers, 938 A.2d 286, 295

(Pa. 2007).         There is no indication that the Supreme Court of

                                             16
North Carolina would adopt the rule that the Florida Supreme

Court developed in Koikos rather than turning to the standard it

enunciated in Gaston County.

     Third, looking to the number of surgeries or instances of

using hydraulic fluid to wash surgical instruments to determine

the number of occurrences would turn the focus in this case from

Automatic    Elevator’s     alleged     negligence      to     Duke’s     actions.

Because Automatic Elevator is the insured party, calculating the

number of occurrences based on Duke’s conduct would contradict

other courts’ conclusions that it is more appropriate to “focus

on the act of the insured that gave rise to their liability.”

Donegal, 938 A.2d at 295; see also RLI Ins. Co. v. Simon’s Rock

Early Coll., 765 N.E.2d 247, 251 (Mass. App. Ct. 2002) (“[W]e

must look to the ‘cause’ of the injury by reference to the

conduct of the insured for which coverage is afforded.”); Bomba

v. State Farm Fire & Cas. Co., 879 A.2d 1252, 1255-56 (N.J.

Super.   Ct.    App.     Div.   2005)        (holding   that    the      insureds’

negligence in storing their firearms was the appropriate focus

in   calculating       number   of    occurrences,       not       the    gunman’s

intervening acts).       The only action that Automatic Elevator took

in this case was placing the barrels of hydraulic fluid in its

designated     storage   area   at   DHRH.       Consequently,      although    we

recognize    that   these   out-of-state         holdings    are    not    binding

precedent in North Carolina, the consensus among these courts

                                        17
suggests that the Supreme Court of North Carolina would find

that the hydraulic fluid mistake involved one occurrence because

it would similarly look to Automatic Elevator’s single act of

negligence rather than Duke’s intervening actions.



                                            C.

      Duke     correctly      points       out    that     we    should   resolve       any

ambiguity in the policy’s definition of “occurrence” in Duke’s

favor   and    that    we     should   interpret         the     policy   in   favor       of

coverage as long as Duke’s argument is reasonable.                               Wachovia

Bank & Trust Co. v. Westchester Fire Ins. Co., 172 S.E.2d 518,

522-23 (N.C. 1970).            However, even in light of these rules of

construction, Duke cannot prevail.                     As explained above, Duke’s

contention that the hydraulic fluid incident involved multiple

occurrences is unreasonable.                    First, Duke makes an unfounded

semantic      argument      that     this       case     involved     more     than     one

occurrence        because   an     accident       cannot    be    a   volitional       act.

Second, Duke mischaracterizes Gaston County’s holding in a way

that obscures that case’s support of the proximate cause theory.

And   finally,      Duke    suggests       that    the     Supreme    Court    of     North

Carolina     is    likely     to   adopt    a    controversial        standard      from    a

Florida Supreme Court case rather than extending its own holding

in    Gaston        County.          Because           Duke’s     interpretation           is

unreasonable, we believe that Gaston County controls this case.

                                            18
Therefore, we hold that Automatic Elevator’s alleged negligence

in leaving the barrels in its storage area constituted a single

occurrence.



                                       IV.

      Finally,   Duke    contends     that    the   policy’s   “per   elevator”

endorsement   applies     in   this    case    because    Automatic   Elevator

serviced two elevators during the project that culminated in the

hydraulic fluid mistake.         However, we need not consider this

issue because the endorsement specifies that the policy’s $3

million aggregate limit—not its $1 million per occurrence limit—

applies to each elevator that Automatic Elevator serviced during

the policy period.       Because we hold that this case involves only

one   occurrence   and    does   not    trigger     the   policy’s    aggregate

limit, the “per elevator” endorsement cannot apply here.



                                       V.

      For the foregoing reasons, we affirm.

                                                                       AFFIRMED




                                       19
KING, Circuit Judge, dissenting:

     I   respectfully   dissent     from   the    opinion     of   the   panel

majority, because I believe that it has incorrectly determined

the amount of insurance coverage available from Mitsui Sumitomo.

Each instance of a waste-laden medical instrument being used to

operate on an unsuspecting patient at the Duke Hospitals gave

rise to an “occurrence.”      Duke’s argument to that effect is not

simply “intriguing,” ante at 11, it is plainly correct.

     An occurrence is defined in the Mitsui Sumitomo policy as

an accident (“‘Occurrence’ means an accident”).               North Carolina

precedent counsels that to the extent possible, “every word and

every provision [of an insurance policy] is to be given effect,”

and this principle instructs us to analyze the word “accident”

within the context of the policy’s definition of an occurrence.

Gaston Cnty. Dyeing Mach. Co. v. Northfield Ins. Co., 524 S.E.2d

558, 563 (N.C. 2000) (internal quotation marks omitted).                 Mitsui

Sumitomo agreed by its policy to provide coverage to Automatic

Elevator for “bodily injury or property damage” up to $1,000,000

for “any one occurrence” (which means “an accident”), and an

aggregate limit of $3,000,000 per elevator.                 Giving effect to

the policy’s definition of an “occurrence,” the term “accident”

means an “unplanned and unforeseen happening or event.”                  Gaston

Cnty.,   524   S.E.2d   at   564.     North      Carolina    precedent    also

dictates that “[w]hether events are ‘accidental’ and constitute

                                    20
an   ‘occurrence’           depends      upon       whether      they       were       expected      or

intended from the point of view of the insured.”                                     Waste Mgmt. of

Carolinas, Inc. v. Peerless Ins. Co., 340 S.E.2d 374, 380 (N.C.

1986).      An “occurrence” is therefore not a volitional act, such

as     leaving       barrels      in     the      Duke       Health        parking      lot.         An

occurrence,          or    accident,         must      instead        be        an    unplanned     or

unforeseen happening or event from the perspective of Automatic

Elevator.        The district court thus erred in concluding that the

volitional decision of leaving the barrels of used hydraulic

fluid    in    the        parking      lot   gave       rise    to    Automatic          Elevator’s

liability.

       In   addition         to   the    requirement           that        an    accident      be   an

unplanned       happening         or    event,         the     presence          of    injuries     or

damages is a prerequisite to coverage.                            This proposition makes

sense,      inasmuch         as     there      is      nothing       for        the    insurer      to

compensate until injuries or damages have arisen.                                     For example,

if an elevator repairman intentionally leaves his tools in a

public walkway for easy access and no one uses the walkway,

there can be no accident because an unforeseen event will not

have occurred.              Moreover, there is yet no need for coverage

because no damages or injuries have been suffered.                                     If a person

uses     the     obstructed         walkway,           however,       and        injures    himself

falling       over    the     tools,         an     accident      has       occurred       and      the

resultant damages are compensable under the policy.

                                                  21
      In the foregoing example, the “occurrence” was the fall and

the resulting injuries.                The repairman’s placing of the tools

was   an    act        of    volition,    but      the    resulting    injuries       were

unintended        by        the   repairman     and      his    employer     and,    thus,

accidental.        The facts of this case present a materially similar

scenario.     Automatic Elevator, after servicing the Duke Health

parking garage, intentionally left the barrels of used hydraulic

fluid in the parking lot.                  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 contents of

those barrels, however, there were multiple occurrences, as each

of the surgeries caused severe injury and damage.                              Insurance

coverage for such injuries is what the policy is all about.

      The Supreme Court of North Carolina’s decision in North

Carolina Farm Bureau Mutual Insurance Co. v. Stox, 412 S.E.2d

318 (N.C. 1992), exemplifies the foregoing.                        In that case, Stox

suffered injuries from a fall after she was pushed by Gordon

Owens.     The insurer had issued a homeowners liability policy to

Owens,     under       which      Owens   sought      indemnification        for    Stox’s

injuries.     The state court of appeals ruled that the policy did

not cover Stox’s injuries because those injuries were subject to

an exclusion as “expected or intended.”                        Id. at 321.     The state

supreme court reversed, ruling that the court of appeals had

                                              22
improperly focused on the intentional nature of Owen’s act in

pushing Stox, rather than on the resulting injury.                   Id. at 322.

The supreme court decided that, because Stox’s injuries were

unintentional,      the    occurrence    was    not   subject   to   the   policy

exclusion.    Id.

     The    Stox    court    also   assessed     whether    Owen’s   act   was   a

covered “occurrence,” which — as in this case — was defined in

the policy as “an accident.”            Id. at 324.        Since an “accident”

was not defined in the policy, the court gave the term the

dictionary definition similarly applicable here — “‘an event

that takes place without one’s foresight or expectation; [an]

undesigned, sudden, and unexpected event; chance; contingency.’”

Id. at 325 (quoting Iowa Mut. Ins. Co. v. Fred M. Simmons, Inc.,

128 S.E.2d 19, 22 (N.C. 1962)).              Guided by the settled rule that

insurance    policy       provisions    “which    extend    coverage    must     be

construed liberally so as to provide coverage, whenever possible

by reasonable construction,” the state supreme court concluded

that the injury resulting from Owen’s intentional act of pushing

Stox was itself an unintended injury covered by the homeowners

policy.    Stox, 412 S.E.2d at 324-35.           As the court explained:

     where the term “accident” is not specifically defined
     in an insurance policy, that term does include injury
     resulting from an intentional act . . . .   Competent
     evidence supported the trial court’s finding in the
     case sub judice that the injury to Stox was an
     unintended injury resulting from Owens’ intentional
     act.   Therefore, the trial court correctly concluded

                                        23
      from that finding that Owens’ liability, if any, for
      that injury was covered under the policy as an
      “occurrence” or “accident[.”]

Id. at 325.        Put simply, the accident (i.e., the occurrence) in

that case, according to the high court of North Carolina, was

the   unintended     injury     to    Stox,    rather    than   the    intentional

conduct of Owen.

      Pursuant      to   the   foregoing,      I   am    convinced     that   North

Carolina law defines an “accident” as an unplanned or unforeseen

happening     or    event      that    carries     unfortunate       consequences.

Furthermore, the ordinary meaning of the term “accident” is an

event that was not anticipated.               As a result, an intentional or

volitional act of the insured simply cannot be an “accident.”

Accidents,    however,      may   be    unexpected       harmful    events    (i.e.,

multiple surgeries with contaminated instruments) that flow from

volitional acts such as leaving mislabeled barrels in the Duke

Health parking lot.         This interpretation of the word “accident”

is entirely reasonable, and would prevail under North Carolina

law even if “accident,” as used in the policy, could somehow be

deemed ambiguous.

      From the perspective of Automatic Elevator, its abandonment

of barrels of hydraulic fluid could not have been an accident,

let   alone   an    accident      covered     by   the    policy,     in   that   the

abandonment was volitional, that is, actually intended, and the

abandonment did not itself result in any injuries or damages.

                                         24
The   accidents   (i.e.,   the   occurrences)      took   place   when   the

damages   arose   —   when,      unintended   by    Automatic     Elevator,

surgeries were performed on unsuspecting Duke hospital patients

with contaminated medical instruments that had been unknowingly

“cleaned” with used elevator hydraulic fluid.             Such occurrences

were repeated on at least 127 occasions, and Mitsui Sumitomo, as

the insurer, is responsible for those occurrences, up to the

aggregate limits of its coverage. *

      Because there were two elevators being repaired at the Duke

Hospital, and because the hydraulic fluid came from repair work

that was performed on both of them, I would rule that Mitsui

Sumitomo is liable to its insured for coverage up to $6,000,000.

      I respectfully dissent.




      *
        The majority primarily rests its decision on North
Carolina’s adoption of a “cause test” to determine which event
constituted the occurrence.    I am not convinced, however, that
North Carolina has ever adopted such a test.      The only North
Carolina decision that the majority relies on for this test is
Gaston County, yet the opinion states that “Duke’s reliance on
Gaston County is inappropriate.” Ante at 14. In Gaston County,
the court gave weight to the term “accident,” and the accident
there was the “sudden, unexpected leakage” of a pressure vessel,
causing property damage.    “Sudden, unexpected leakage” readily
fits the definition of an accident because it was unplanned and
unintentional. In my view, Gaston County did not adopt a “cause
test,” it simply applied the definition of “accident” to the
facts of the case to determine which incident qualified as an
occurrence.




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