Number of Occurrences – Sixth Circuit (Ohio Law)

J.M. Smucker Co. v. Ace Am. Ins. Co.
No. 25-3799, 2026 WL 1893804 (6th Cir. July 1, 2026)

In a unanimous published opinion, the U.S. Court of Appeals for the Sixth Circuit affirmed the U.S. District Court for the Northern District of Ohio’s summary judgment in favor of The J.M. Smucker Company (Smucker), holding that claims arising from alleged salmonella contamination in Smucker peanut butter constituted one “occurrence,” not 225 lot-based occurrences, for purposes of ACE American Insurance Company’s (ACE) retained-limit obligations under the commercial general liability policies it issued to Smucker.

Smucker purchased insurance policies from ACE that covered bodily injuries from bacterial contamination, contained a $250,000 retained limit per occurrence, and defined “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” After Smucker recalled peanut butter made at its Lexington, Kentucky facility in 2022 due to potential salmonella contamination, consumers brought thousands of bodily injury and property damage claims against Smucker.

Smucker notified ACE of the claims, but ACE denied coverage. ACE took the position that each individual claimant’s exposure to allegedly contaminated peanut butter was a separate occurrence and that the policies’ lot endorsement aggregated those exposures into 225 occurrences organized by “lot” (a 24-hour period of peanut butter production). Under ACE’s interpretation, Smucker would potentially have to satisfy $56.25 million in retained limits under each policy, or $112.5 million across the two policies, before ACE owed payment.

After ACE denied coverage, Smucker sued for breach of contract and a declaration that the claims arose from a single occurrence. ACE counterclaimed for a declaration that Smucker had to pay the $250,000 retained limit for each of the 225 lots. Both parties filed motions for summary judgment. The U.S. District Court for the Northern District of Ohio granted Smucker’s summary judgment motion and denied ACE’s, finding that the salmonella contamination was a single occurrence and that the lot endorsement was ambiguous. The district court certified the summary judgment order for interlocutory appeal, and the appellate court reviewed the summary judgment ruling de novo.

The appellate court first focused on the policies’ occurrence definition. Because “accident” was undefined by the policies, the appellate court applied its ordinary meaning and, under Ohio law, evaluated the accident from the insured’s perspective, not from the perspective of each claimant who intentionally ate the peanut butter. Stated otherwise, the appellate court determined that each claimant’s peanut butter consumption was not the basis for determining the number of occurrences. Accordingly, the appellate court focused on Smucker’s conduct, (i.e., the unintentional production of peanut butter contaminated with salmonella), and found that this was the lone occurrence under the policies. The appellate court also noted that the remaining definition of “occurrence,” (i.e., “continuous or repeated exposure to substantially the same general harmful conditions,”) supported treating the salmonella contamination as a single, continuous accident.

The appellate court reached the same result under Ohio’s “cause” test, which looks to the cause or causes of the damage or injury rather than the number of individual claims. The appellate court rejected ACE’s reliance on product liability and asbestos coverage cases because those decisions addressed coverage triggers or business decisions outside the policy period, not retained limits for an admittedly accidental salmonella outbreak.

The appellate court also held that the lot endorsement did not convert the single occurrence into 225 retained-limit obligations or expressly replace the policies’ “occurrence” definition. The appellate court viewed the endorsement as ambiguous because it could either limit multiple injuries within one lot to a single occurrence or aggregate injuries on a per-lot basis when multiple lots are involved.

The appellate court rejected ACE’s surplusage argument because Smucker offered a plausible “timing function” for the lot endorsement: an occurrence involving injuries from a single lot would be deemed to occur when the first claim from that lot arose, limiting the applicable retained limit to one policy year even if later claims appeared in later policy periods. Because that scenario showed that the endorsement was not entirely redundant, the appellate court rejected ACE’s surplusage argument.

The appellate court affirmed summary judgment for Smucker, holding that the alleged salmonella contamination constituted one occurrence under the policies and that ACE could not require Smucker to satisfy retained limits for 225 separate lots.