Roman Catholic Diocese of Brooklyn v. National Union Fire Insurance

OPINION OF THE COURT

Rivera, J.

This insurance coverage dispute involves the apportionment of liability for a settlement between the Roman Catholic Diocese of Brooklyn (the Diocese), and a minor plaintiff in an underlying civil action charging sexual molestation by a priest. We agree with the Appellate Division that the incidents of sexual abuse constituted multiple occurrences, and that any potential liability should be apportioned among the several insurance policies, pro rata. We therefore affirm.

In November 2003, Jeanne M. N.-L., individually and as mother and natural guardian of Alexandra L., a minor under the age of 18 years, commenced a civil action against the Diocese and one of its priests. The complaint, as amplified by the bill of particulars, alleged that the priest sexually abused Alexandra on several occasions from August 10, 1996 through May 2002, and that the molestation took place in several locations including the rectory, office and other areas of a church in Queens, New York; the priest’s vehicle; the plaintiffs home; and a home in Amityville, New York.

In August 2007, the Diocese settled the action for $2 million and “additional consideration.” The appeal before us involves a dispute between the Diocese and defendant National Union Insurance Company of Pittsburgh, Pa. (National Union), one of its insurance carriers, regarding the Diocese’s demand for reimbursement for the settlement.

National Union provided primary insurance to the Diocese, and issued three consecutive one-year commercial general liability policies for August 31, 1995 to August 31, 1996; August 31, 1996 to August 31, 1997; and August 31, 1997 to August 31, 1998. Nonparty Illinois National Insurance Company provided primary coverage for the next three years from August 31, 1998 to August 31, 2001. Defendant Westchester Fire Insurance Company, who settled with the Diocese and is not a party on *144this appeal, provided excess umbrella coverage for all seven years under consecutive annual policies. The National Union policies provide coverage for damages resulting in bodily injury during the policy period, and include a liability limitation of $750,000 and a $250,000 self-insured retention (SIR) applicable to each occurrence.1 The parties, thus, agreed that for each occurrence resulting in bodily injury within the policy period, National Union would be liable for covered damages after the first $250,000 (in excess of the SIR), and its liability would cap at $750,000.

When the Diocese sought coverage under the 1996-1997 and 1997-1998 National Union policies, National Union responded by letter dated July 15, 2004, disclaiming coverage based on, inter alia, two exclusionary provisions referring to sexual abuse,2 and also asserted that the “policies have $750,000 policy limits *145over a $250,000 self-insured retention,” and coverage is applicable only if the “bodily injury” occurred during the policy period. In response to a subsequent request for coverage under the 1995-1996 policy, National Union again disclaimed coverage in a December 1, 2004 letter, based on the previously cited exclusionary provisions.3

In January 2009, the Diocese sought a declaratory judgment that National Union was required to indemnify the Diocese for the $2 million settlement and certain defense fees and costs, up to the liability limits of the 1995-1996 and 1996-1997 policies. National Union asserted two affirmative defenses relevant to this appeal. First, it claimed that “to the extent coverage exists for plaintiffs’ claim, it is subject to multiple self-insured retentions under the Policies.” Second, it asserted that “coverage obligation is limited by the availability of other ‘valid and collectible’ insurance for which plaintiffs may be entitled to coverage.”

National Union moved for partial summary judgment, seeking an order that the incidents of sexual abuse in the underlying action constituted a separate occurrence in each of the seven implicated policy periods, and required the exhaustion of a separate $250,000 SIR for each occurrence covered under a policy from which the Diocese sought coverage. National Union also sought a ruling requiring that the $2 million settlement be paid on a pro rata basis across each of the seven policies. In opposition, the Diocese argued that the sexual abuse constituted a single occurrence requiring the exhaustion of only one SIR, and that allocation of liability should be pursuant to a joint and several allocation method, under which the entire settlement amount could be paid for with National Union’s 1995-1996 and 1996-1997 policies. The Diocese also cross-moved for partial summary judgment, seeking a declaration that National Union waived the two affirmative defenses by failing to timely include those bases in their notices of disclaimer of coverage.

Supreme Court denied National Union’s motion for partial summary judgment and granted the cross motion of the Diocese, concluding that National Union, in contravention of the requirements of Insurance Law § 3420 (d), failed to timely disclaim coverage. The court further determined that the incidents of sexual abuse constituted a single occurrence, but *146observed that the language of the policies required the exhaustion of the SIR for each implicated policy.

The Appellate Division reversed the order of Supreme Court, declaring that the alleged acts of sexual abuse constituted multiple occurrences, and that the settlement amount should be allocated on a pro rata basis over the seven policy periods, requiring the concomitant satisfaction of the SIR attendant to each implicated policy (87 AD3d 1057 [2011]). The court granted the Diocese leave to appeal (2012 NY Slip Op 64632[U] [2012]), and certified the following question to this Court: “Was the decision and order of this court dated September 20, 2011, properly made?”

I

As a threshold matter, the Diocese contends that, by failing to timely disclose certain grounds for disclaimer in violation of Insurance Law § 3420 (d), National Union waived the right to assert those contentions in defense: specifically, that exhaustion of the SIR is required for each implicated policy; the incidents of sexual abuse constituted multiple occurrences; and that pro rata allocation is appropriate in this case. Although the Diocese correctly points out that failure to comply with section 3420 (d) notice requirements bars an insurer from seeking to disclaim coverage, National Union was under no statutory duty to disclose a liability limitation, and therefore is not barred from making its arguments regarding the application of the SIR, and allocation.

In the event an insurer seeks to disclaim coverage, section 3420 (d) (2) imposes a timeliness requirement on the issuance of a written notice of disclaimer. It provides:

“If under a liability policy issued or delivered in this state, an insurer shall disclaim liability or deny coverage for death or bodily injury arising out of a motor vehicle accident or any other type of accident occurring within this state, it shall give written notice as soon as is reasonably possible of such disclaimer of liability or denial of coverage to the insured and the injured person or any other claimant.”

Failure to raise a ground for disclaimer “as soon as is reasonably possible” precludes an insurer from later asserting it as a defense (see General Acc. Ins. Group v Cirucci, 46 NY2d 862, *147863 [1979]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 319 [2007] [“(T)he failure by Travelers to seek verification of tbe assignment in a timely manner prevents the carrier from litigating the issue now”]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]).

In Zappone v Home Ins. Co. (55 NY2d 131 [1982]), we previously recognized a narrow exception to the timeliness requirement of section 3420 (d), holding that a notice of disclaimer is not required in the event there “is no insurance at all and, therefore, no obligation to disclaim or deny” (55 NY3d at 139). This Court concluded that the notice requirement only applied to “situations in which a policy of insurance that would otherwise cover the particular accident is claimed not to cover it because of an exclusion in the policy (id. at 138 [emphasis added]).

Here, the defenses at issue do not relate to an argument of exclusion or disclaimer, but rather, focus on the extent of alleged liability under the various policies. Put simply, they are not subject to the notice requirements of section 3420 (d) because they “do[ ] not bar coverage or implicate policy exclusions” (Pav-Lak Indus., Inc. v Arch Ins. Co., 56 AD3d 287, 288 [1st Dept 2008]). Thus, National Union did not have to give notice of the SIR requirement because the SIR is not a basis for disclaimer or denial of coverage (see Power Auth. of State ofN.Y. v National Union Fire Ins. Co. of Pittsburgh, 306 AD2d 139, 140 [1st Dept 2003] [“Thus, the time requirements for disclaiming coverage under Insurance Law § 3420 (d) are inapplicable; since the retention amount does not implicate exclusions in the policy”]). The SIR, which is effectively a deductible to the policies, is not a basis for the denial of coverage. Similarly, arguments pertaining to the appropriate methodology for allocating liability do not provide an exclusionary basis to evade coverage. Accordingly, section 3420 (d) does not apply, and National Union is not precluded from arguing that the incidents of sexual abuse amounted to multiple occurrences, and that any liability should be apportioned on a pro rata basis.

II

Turning to the merits, we now decide whether the several acts of sexual abuse constitute multiple occurrences. This is the first time we address the meaning of “occurrence” in the context of claims based on numerous incidents of sexual abuse of a minor by a priest, which spanned several years and several *148policy periods. However, our prior consideration of the complexities associated with interpreting this term provide a roadmap for resolving the issues presented in this case.

It is well established that “[i]n determining a dispute over insurance coverage, we first look to the language of the policy” (Consolidated Edison Co. of N.Y. v Allstate Ins. Co., 98 NY2d 208, 221 [2002], citing Breed v Insurance Co. of N. Am., 46 NY2d 351, 354 [1978]). In doing so, we must “construe the policy in a way that ‘affords a fair meaning to all of the language employed by the parties in the contract and leaves no provision without force and effect’ ” (Consolidated Edison, 98 NY2d at 221-222, quoting Hooper Assoc. v AGS Computers, 74 NY2d 487, 493 [1989]).

The National Union policies at issue on this appeal define an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” They define “bodily injury” to mean “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time,” and limit liability to bodily injury that “occurs during the policy period.”

Generally, the issue of what constitutes an occurrence has been a legal question for courts to resolve (see Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169 [1973]). In Arthur A. Johnson Corp. v Indemnity Ins. Co. of N. Am. (7 NY2d 222, 227 [1959]) this Court addressed how to determine whether “there [are] one or more [occurrences] within the meaning of [an insurance] clause limiting coverage to a certain amount per [occurrence].” We adopted the “unfortunate event” test, specifically rejecting other approaches that would equate the number of occurrences with either “the sole proximate cause” (id. at 227-228) or by the “number of persons damaged” (id. at 228).

In Appalachian Ins. Co. v General Elec. Co. (8 NY3d 162 [2007]) we stated that absent policy language indicating an intent to aggregate separate incidents into a single occurrence, the unfortunate event test should be applied to determine how occurrences are categorized for insurance coverage purposes (see Appalachian, 8 NY3d at 173). We determined that the unfortunate event test requires consideration of “whether there is a close temporal and spatial relationship between the incidents giving rise to injury or loss, and whether the incidents can be viewed as part of the same causal continuum, without intervening agents or factors” (id. at 171-172). This Court has *149further observed that "[t]his approach of determining simply whether there was one unfortunate event or occurrence seems to us to be the most practical of the three methods of construction which have been advanced because it corresponds most with what the average person anticipates when he [or she] buys insurance and reads the [occurrence] limitation in the policy” (Johnson, 7 NY2d at 229-230 [internal quotation marks omitted]).

Here, nothing in the language of the policies, nor the definition of “occurrence,” evinces an intent to aggregate the incidents of sexual abuse into a single occurrence (cf. Consolidated Edison, 98 NY2d at 222 [a policy expressly providing that “(a)ll such exposure to or events resulting from substantially the same general conditions during the policy period shall be deemed one occurrence” (emphasis added)]). Applying the unfortunate event test we conclude that the incidents of sexual abuse within the underlying action constituted multiple occurrences. Clearly, incidents of sexual abuse that spanned a six-year period and transpired in multiple locations lack the requisite temporal and spatial closeness to join the incidents (see Johnson, 7 NY2d at 230 ["(W)e conclude that the collapses of separate walls, of separate buildings at separate times, were in fact separate disastrous events, and, thus, two different accidents within the meaning of the policy”]). While the incidents share an identity of actors, it cannot be said that an instance of sexual abuse that took place in the rectory of the church in 1996 shares the same temporal and spatial characteristics as one that occurred in 2002 in, for example, the priest’s automobile (see Appalachian, 8 NY3d at 174 [“On this record, it appears that the incidents share few, if any, commonalities, differing in terms of when and where exposure occurred”]).

Moreover, the incidents are not part of a singular causal continuum. The causal continuum factor is best illustrated by the facts of Wesolowski (33 NY2d 169 [1973]). In that case, this Court held that a three-car collision amounted to a single occurrence "[w]here the insured’s automobile struck one oncoming vehicle, ricocheted off and struck a second more than 100 feet away” (33 NY2d at 170). Under those facts, “the two collisions here occurred but an instant apart” and "[t]he continuum between the two impacts was unbroken, with no intervening agent or operative factor” {id. at 174 [emphasis added]). Thus, contrary to the Diocese’s and dissent’s view that the negligent *150supervision was the sole causal factor, and thus requires a finding of a single occurrence, the unfortunate event test requires us to focus on “the nature of the incident[s] giving rise to damages” (Appalachian, 8 NY3d at 171; see also H.E. Butt Grocery Co. v National Union Fire Ins. Co. of Pittsburgh, Pa., 150 F3d 526, 531 [5th Cir 1998]; Interstate Fire & Cas. Co. v Archdiocese of Portland in Or., 35 F3d 1325, 1329-1330 [9th Cir 1994]). As we stated in Appalachian, “cause should not be conflated with the incident” (8 NY3d at 172). Accordingly, where, as here, each incident involved a distinct act of sexual abuse perpetrated in unique locations and interspersed over an extended period of time, it cannot be said, like the uninterrupted, instantaneous collisions in Wesolowski, that these incidents were precipitated by a single causal continuum and should be grouped into one occurrence.4

The Diocese argues that the policies define occurrence as including “continuous or repeated exposure to substantially the same general harmful conditions.” Therefore, the definition encompasses and anticipates multiple claims, losses and incidents within the meaning of a single occurrence. We agree that the term “occurrence” as defined in the policies may include situations involving multiple events. Our analysis does not end with that conclusion for it fails to resolve the crucial issue in this case, which is what types of claims, issues or incidents may be associated with a single occurrence for purposes of the per occurrence liability limitation and the SIR.

Previously, in Continental Cas. Co. v Rapid-American Corp. (80 NY2d 640, 648 [1993]), we observed that the insurance industry had shifted from accident-based coverage “to *151occurrence-based coverage in 1966 to make clear that gradually occurring losses would be covered so long as they were not intentional.” Consequently, a number of our occurrence-based insurance coverage cases have dealt with injuries caused by exposure to environmental, or other external, hazards (see id.; Appalachian, 8 NY3d 162 [2007]; Consolidated Edison, 98 NY2d 208 [2002]). Certainly, in those cases, the injuries at issue comported with the general meaning of an “occurrence” as “continuous or repeated exposure to conditions” (Continental Cas. Co., 80 NY2d at 648).

In our view, sexual abuse does not fit neatly into the policies’ definition of “continuous or repeated exposure” to “conditions.” This “sounds like language designed to deal with asbestos fibers in the air, or lead-based paint on the walls, rather than with priests and choirboys. A priest is not a ‘condition’ but a sentient being” (Lee v Interstate Fire & Cas. Co., 86 F3d 101, 104 [7th Cir 1996]; see also Champion Intl. Corp. v Continental Cas. Co., 546 F2d 502, 507-508 [2d Cir 1976, Newman, J., dissenting] [noting that an “exposure to conditions” involves physical exposure to “phenomenon such as heat, moisture, or radiation”]; ExxonMobil, 15 Misc 3d 1144[A], 2007 NY Slip Op 51138[U], *9 [“the purpose of a continuous exposure clause is to combine claims that occur ‘when people or property are physically exposed to some injurious phenomenon such as heat, moisture, or radiation’ ”]). The settlement in the underlying claim addresses harms for acts by a person employed by the Diocese. The Diocese’s argument that the parties intended to treat numerous, discrete sexual assaults as an accident constituting a single occurrence involving “conditions” is simply untenable.

Although our focus is the language of the policies and the parties’ intent, the Diocese characterizes the victim’s experience as a “pattern” in support of its argument that this is a single occurrence. While the nature of the incidents that caused injuries is relevant to our assessment under the unfortunate event test, it is not readily apparent how the victim’s own perceptions of sexual molestation shed light on the parties’ intent and the meaning of the terms in the policies. However, it is certainly at least as tenable to conclude that from the victim’s perspective each event is marked by its own serious, individualized set of facts with particularized harms, further supporting a multiple occurrence interpretation of the molestation.

The Diocese analogizes this case to State Farm Fire & Cas. Co. v Elizabeth N. (9 Cal App 4th 1232, 12 Cal Rptr 2d 327 *152[1992]) where two children attending a day care center “had been sexually molested over a period of a month or more” (9 Cal App 4th at 1235, 12 Cal Rptr 2d at 328). There, the Court of Appeal for the First District, Division 3, of California held that the multiple instances of sexual molestation constituted a single occurrence for insurance coverage purposes. We decline, however, to follow that holding because of certain materially distinguishable differences. First, unlike the plain language at issue here, the policy in Elizabeth N. expressly provided that “[a]ll bodily injury and property damage resulting from any one accident or from continuous or repeated exposure to substantially the same general conditions shall be considered to be the result of one occurrence” (9 Cal App 4th at 1236, 12 Cal Rptr 2d at 329 [emphasis added]). Again, there is no language within National Union’s policies indicating an intent to aggregate the sexual abuse into a single occurrence. Second, and more significantly, the parties in Elizabeth N. “agree[d] that the number of occurrences depends on the cause of injury rather than the number of injurious effects” (9 Cal App 4th at 1236-1237, 12 Cal Rptr 2d at 329). The California Court of Appeal reasoned that the negligent failure of the day care owner to adequately care for, and supervise the children, subjected them to repeated molestation by the perpetrator (see 9 Cal App 4th at 1238, 12 Cal Rptr 2d at 330). We, on the other hand, have typically applied the unfortunate event test, an inquiry primarily focused on “the nature of the incident[s] giving rise to damages” (Appalachian, 8 NY3d at 171). Thus, unlike this appeal, a finding of a single occurrence was warranted in Elizabeth N. under the analytical framework employed by the California court and the particular definition of “occurrence” in the policy at issue.5

*153Consequently, the Diocese must exhaust the SIR for each occurrence that transpires within an implicated policy from which it seeks coverage (see Olin Corp. v Insurance Co. of N. Am., 221 F3d 307, 328 [2d Cir 2000] [“when multiple policies are triggered and liability is allocated to each, each policy’s deductible is applicable”]). The policies provide that the SIR “shall apply separately to each occurrence,” and only to “occurrences covered under [the] policy.” The only occurrences that are subject to the policies are those with damages resulting from bodily injuries that occur within the policy period. Therefore, for each policy from which coverage is sought, the SIR is inextricably linked to an occurrence which results in bodily injury during the policy period, and the attendant deductible must be satisfied before coverage can be triggered.6 The consequences of such policy language is that the SIR applies to an occurrence with bodily injuries within the policy period, not to an occurrence with injuries sustained in a subsequent policy year. Despite the dissent’s view, if the parties had agreed to a $250,000 SIR in the first year of coverage, we would not assume that that SIR would apply to bodily injuries occurring in a subsequent, separate policy year.

To permit the Diocese to exhaust a single SIR and then receive coverage from up to seven different policies would conflict with the plain language of the policies, and produce an outcome not intended by the parties. We reject this attempt by this insured to escape the consequences of its bargained for insurance policy provisions.

III

Finally, with respect to allocation of liability, in Consolidated Edison (98 NY2d 208 [2002]), we highlighted the distinction between the joint and several allocation and pro rata allocation *154methods. A joint and several allocation permits the insured to “collect its total liability . . . under any policy in effect during” the periods that the damage occurred (98 NY2d at 222), whereas a pro rata allocation “limits an insurer’s liability to all sums incurred by the insured during the policy period” (id. at 222-223 [internal quotation marks omitted]).

In that case, Consolidated Edison had operated a gas plant for 60 years which had caused severe environmental contamination. Consolidated Edison sought a declaratory judgment that it could allocate all liability to any one of the 24 insurers who issued policies during the 60-year period in which the gas plant was operated. This Court agreed with the insurers that pro rata allocation, while not mandated by the policies, was consistent with the language of the policies and the circumstances of that case. The extent of environmental damage could not be precisely identified with any particular year of the 60-year period; therefore, we concluded that pro rata allocation was the appropriate method of apportioning liability among all the insurers. The Court observed that joint and several allocation is particularly inappropriate where “it is impossible to determine the extent of the . . . damage that is the result of an occurrence in a particular policy period” because it “presupposes [an] ability to pin an accident to a particular policy period” (id. at 224).

A pro rata allocation is consistent with the language of the policies at issue here. By example, National Union’s 1995-1996 policy provides coverage for bodily injury only if the bodily injury “occurs during the policy period” and is caused by an “occurrence.” Plainly, the policy’s coverage is limited only to injury that occurs within the finite one-year coverage period of the policy. To that end, assuming that the minor plaintiff suffered “bodily injury” in each policy year, it would be consistent to allocate liability across all implicated policies, rather than holding a single insurer liable for harm suffered in years covered by other successive policies. There is no indication that the parties intended that the Diocese’s total liability for bodily injuries sustained from 1996 to 2002 would be assumed by a single insurer. Furthermore, like Consolidated Edison, a joint and several allocation is not applicable in this case as the Diocese cannot precisely identify the sexual abuse incidents to particular policy periods. The minor plaintiff in the underlying action could only give a broad time-frame in which the sexual abuse was perpetrated and conceded in her affidavit that she was “unable in good faith ... to state the exact date(s), time(s), [and] *155place(s) of each and every assault” (see Serio v Public Serv. Mut. Ins. Co., 304 AD2d 167 [2d Dept 2003]; State of N.Y. Ins. Dept., Liquidation Bur. v Generali Ins. Co., 44 AD3d 469 [1st Dept 2007]). Thus, “[p]roration of liability among the insurers acknowledges the fact that there is uncertainty as to what actually transpired during any particular policy period” (Consolidated Edison, 98 NY2d at 224).

Accordingly, the order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

. The initial “Self Insured Retention” endorsement proposed that each SIR “shall apply separately to each claim arising out of such ‘occurrence.’ ” However, at the request of the Diocese that the purchased coverage “was per occurrence which includes all losses arising out of that occurrence,” the language was amended in a revised endorsement to reflect that each SIR “shall apply separately to each occurrence.” There is no dispute between the parties that the $250,000 SIR and $750,000 liability limit applies “per occurrence.”

. The 1996-1997 policy’s endorsement regarding “Sexual Abuse, Sexual Molestation, [or] Sexual Assault” states:

“Not withstanding [sic] anything in the policy terms or conditions to the contrary, it is hereby understood and agreed that this contract will NOT cover any school, day care center, child care center or any other related facility for any claims resulting from any claims arising out of: sexual abuse, sexual molestation, sexual assault, sexual victimization, or mental injury or emotional injury resulting therefrom or from any coercing to engage in sexual activities on the part of any employee, assistant, or volunteer of any such facility owned by, operated by or maintained by any insured.”

The 1997-1998 policy’s endorsement regarding a “Sexual Abuse or Molestation Exclusion” provides:

“This insurance does not apply to ‘bodily injury’, ‘property damage’, ‘advertising injury’ or ‘personal injury’ arising out of:
“(a) the actual or threatened sexual abuse or molestation by anyone of any person anywhere, or “(b) the negligent:
“(i) employment;
“(ii) investigation;
“(hi) supervision;
“(iv) reporting to the proper authorities or failure to so report; or “(v) retention;
“of any person whose conduct would be excluded by (a) above.”

. The merits of National Union’s coverage defenses are still being litigated in Supreme Court and are not relevant to this appeal.

. The dissent’s focus on the underlying claims of negligence asserted in the civil action against the Diocese—negligent hiring, supervision and retention—is akin to a sole proximate cause approach previously rejected by this Court (see Johnson, 7 NY2d at 227-228 [rejecting the “proximate cause, or causa causans” test]; ExxonMobil Corp. v Certain Underwriters at Lloyd’s, London, 15 Misc 3d 1144[A], 2007 NY Slip Op 51138[U], *10 [2007] [“New York’s highest court rejected the ‘cause’ test that ExxonMobil appears to argue, in favor of the ‘unfortunate event’ test”]). The unfortunate event test does not prohibit consideration of common causation, but places it among a number of factors to be evaluated. The “fulcrum of our analysis” is the pertinent incident (Appalachian, 8 NY3d at 172). Therefore, the dissent’s focus on the cause, rather than the circumstances of the sexual molestation misses the mark. We also note that we are analyzing the language of the insurance policy, and not the victim’s personal injury action. The fact that the victim may posit a theory of negligence does not determine the meaning of the language of the insurance policies nor the parties’ intent.

. By contrast, in H.E. Butt Grocery Co. (150 F3d 526 [1998]), a case involving the sexual abuse of two children in a grocery store, the United States Court of Appeals for the Fifth Circuit rejected an argument that the underlying negligent supervision of the perpetrator warranted a finding of a single occurrence. That court remarked that “when the underlying basis for liability is negligent supervision, yet the damage is caused by an intervening intentional tort, the court cannot look past the immediate cause of the damage for purposes of the insurance policy. Thus, the two independent acts of sexual abuse ‘caused’ the two children’s injuries” (150 F3d at 531). In Archdiocese of Portland (35 F3d 1325 [1994]), a factually similar case involving numerous incidents of molestation of a minor by a priest, the United States Court of Appeals for the Ninth Circuit construed the “per occurrence” *153policy to hold that the incidents constituted multiple occurrences, observing “that the occurrence is not the Archdiocese’s negligent supervision of . . .or failure to remove [the priest], but rather, the exposure of the boy to the negligently supervised priest” (35 F3d at 1330 [internal quotation marks and emphasis omitted]).

*152 (n. cont’d)

. The dissent argues that our interpretation of the policies—that each incidence of abuse constitutes a single occurrence exposing the Diocese to multiple SIRs per policy period—could not have been intended by the parties. However, the language of the policies is clear that the SIR applies separately to each occurrence, thus anticipating the possibility of multiple occurrences per policy period. Moreover, each occurrence carries a $250,000 SIR and $750,000 liability cap, regardless of the nature of the occurrence or claim that exposes the Diocese to liability.