American Medical Response Northwest, Inc. v. ACE American Insurance
31 F. Supp. 3d 1087
D. Or.2014Background
- AMR (American Medical Response) sought declaratory relief after ACE and National Union denied coverage for claims arising from alleged sexual assaults by AMR employee Lannie Haszard in ambulance transports; one underlying jury verdict found negligence and Vulnerable Person Abuse (VPA) liability and AMR settled six cases; others remain pending.
- Defendants moved for summary judgment arguing (1) intentional sexual assaults are not accidents/occurrences and (2) policy exclusions (Patient Injury / Patient Care and Expected or Intended) bar coverage.
- Ninth Circuit reversed the district court in part, holding negligent hiring/training/supervision could be an "occurrence" and remanded to analyze each underlying complaint and a 1998 verdict to determine coverage.
- On remand the court considered (a) applicability of ACE’s Patient Care endorsement and National Union’s Patient Injury exclusion, (b) the Expected/Intended exclusion as to AMR’s subjective intent, (c) whether settled claims are indemnifiable, and (d) whether the Whalen battery claim is a covered occurrence.
- Rulings: ACE’s Patient Care endorsement does not bar coverage as a matter of law; National Union’s Patient Injury exclusion does bar coverage as to its policy; Expected/Intended exclusions do not apply because AMR lacked subjective intent to cause harm; battery (Whalen) not an occurrence and is excluded; indemnity for settlements depends on ultimate facts and AMR bears burden to show settlements were for covered claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Patient-care / Patient-injury exclusion (ACE) | ACE must prove the injuries arose from "professional services;" sexual assault is not a professional service. | Exclusion bars coverage for injuries sustained by patients during provision of ambulance/medical services. | ACE's Patient Care endorsement not applied as a matter of law; sexual assault is not a professional service. |
| Patient-injury exclusion (National Union) | Plaintiffs argue sexual assault is not "medical care" and thus not within exclusion. | Exclusion bars coverage for bodily injury sustained by any "patient" (defined to include persons seeking emergency medical treatment). | National Union’s Patient Injury exclusion applies; all claimants were "patients" as defined, so exclusion precludes coverage under that policy. |
| Expected or Intended exclusion | AMR: exclusion requires insured’s subjective intent to cause harm; AMR lacked such intent. | Defendants: insurer exclusion bars intentional or expected injuries; employer should be treated as having expected harm. | Exclusion requires insured’s subjective intent; facts do not show AMR intended harm; exclusion does not apply. |
| Battery (Whalen) / Occurrence question | AMR: Whalen alleges vicarious liability/negligent supervision, not direct battery; thus may be covered. | Defendants: Whalen alleges intentional battery by AMR (direct) and is not an "occurrence." | Whalen complaint pleads direct intentional battery (caption and allegations); intentional battery is not an "occurrence" and is excluded. |
| Indemnity for settled claims | AMR: entitled to indemnification for settlements if based on covered occurrences. | Defendants: insured must prove settlement allocations; insurer not obligated for non-covered claims. | Duty to indemnify depends on ultimate facts underlying settlements; AMR bears the burden to prove settlements arose from covered claims; VPA-related settled claims stayed pending appellate decision. |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (materiality and summary judgment inferences)
- United Steelworkers v. Phelps Dodge, 865 F.2d 1539 (genuine issue/scintilla rule)
- Marx v. Hartford Accident & Indem. Co., 157 N.W.2d 870 (Neb. 1968) (defining "professional services" for malpractice-type exclusions)
- Multnomah County v. Oregon Auto. Ins. Co., 470 P.2d 147 (Or. 1970) (look to nature of act, not actor’s title, to determine "professional")
- Hedmann v. Liberty Mut. Fire Ins. Co., 974 P.2d 755 (Or. Ct. App. 1999) (physician’s sexual motivation not "professional services")
- Hecla Mining Co. v. New Hampshire Ins. Co., 811 P.2d 1083 (Colo. 1991) ("expected or intended" requires insured’s subjective intent)
- Allstate Ins. Co. v. Stone, 876 P.2d 313 (Or. 1994) (subjective intent standard under Oregon law)
- Ledford v. Gutoski, 877 P.2d 80 (Or. 1994) (intent-to-injure requirement for intentional-harm exclusions)