LCS Corrections Services, Inc. v. Lexington Insurance
800 F.3d 664
5th Cir.2015Background
- Mario Garcia, an inmate at a privately operated Brooks County Detention Center run by LCS, died after staff allegedly refused to provide his prescribed benzodiazepines.
- Plaintiffs (Garcia’s heirs) sued LCS under § 1983 alleging deliberate indifference; a separate prior trial on medical malpractice produced a $2.25 million verdict against LCS employees.
- Lexington issued three policies to LCS: a Commercial General Liability (CGL) policy (with a civil rights endorsement), a Commercial Umbrella Liability (CUL) policy, and a Healthcare Professional Liability (HPL) policy (not at issue here for the § 1983 claim).
- Lexington denied coverage under the CGL and CUL for the § 1983 claim, invoking (respectively) a medical services exclusion and a professional liability exclusion; LCS sought declaratory relief that Lexington must defend and indemnify.
- The district court held Lexington must defend under the CGL but not under the CUL; the Fifth Circuit reviewed cross-motions for summary judgment and applied the eight-corners rule for the duty to defend and the Griffin exception for indemnity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether civil rights endorsement overrides CGL medical services exclusion | Endorsement independently covers civil-rights claims, so exclusion shouldn’t apply | Endorsement modifies coverage but remains subject to other policy terms, including exclusions | Endorsement does not override exclusions; exclusions apply |
| Whether CGL medical services exclusion bars coverage for alleged failure to provide medication | Garcia’s death resulted from LCS following an administrative policy, not from withholding medical treatment | Denying medication is a failure to render "medical services" (medical treatment), so exclusion applies | Exclusion applies: denial of medication is "medical services"; no duty to defend or indemnify under CGL |
| Whether CUL professional-liability exclusion bars coverage for the same facts | Injury caused by administrative policy adopted by nonprofessionals, not by professional services | Distributing/administering medications is a professional service; failure to provide it falls within the exclusion | Exclusion applies: failure to render professional medical services excluded; no duty to defend or indemnify under CUL |
| Whether duty to indemnify may be decided now | Plaintiffs: indemnity ripeness should await conclusion of underlying suit | Lexington: where no duty to defend exists and exclusions eliminate any possibility of indemnity, indemnity can be decided | Griffin exception applies here; because exclusions preclude coverage, no duty to indemnify under either policy |
Key Cases Cited
- Nat’l Cas. Co. v. W. World Ins. Co., 669 F.3d 608 (5th Cir. 2012) (applies eight-corners rule for insurer’s duty to defend)
- Columbia Cas. Co. v. Ga. & Fla. RailNet, Inc., 542 F.3d 106 (5th Cir. 2008) (permitting pre-resolution ruling on indemnity when no duty to defend exists)
- Farmers Tex. Cty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex. 1997) (indemnity generally ripe only after underlying litigation unless no possibility of indemnity exists)
- Allstate Ins. Co. v. Disability Servs. of the Sw., Inc., 400 F.3d 260 (5th Cir. 2005) (medical-services exclusion can bar coverage where failure to provide care is integral to the claim)
- Duncanville Diagnostic Ctr., Inc. v. Atl. Lloyd’s Ins. Co. of Tex., 875 S.W.2d 788 (Tex. App. 1994) (administering drugs is a medical act requiring professional judgment)
- Weeks Marine, Inc. v. Standard Concrete Prods., Inc., 737 F.3d 365 (5th Cir. 2013) (contracts construed to harmonize provisions so none are rendered meaningless)
- Admiral Ins. Co. v. Ford, 607 F.3d 420 (5th Cir. 2010) (definition of professional services requires specialized knowledge or training)