National Casualty Co. v. Western World Insurance
669 F.3d 608
5th Cir.2012Background
- National Casualty and Western World insured Preferred Ambulance; underlying suit alleges EMTs injured Darline Rigsby while loading her into an ambulance and she died days later.
- National Casualty's Business Auto Coverage insured use of a covered auto; exclusion for bodily injuries from providing or failing to provide medical or other professional services.
- Western World's Commercial General Liability policy covers bodily injury to which this coverage part applies caused by a professional incident and contains an auto use exclusion.
- District court held both policies provided primary coverage and declined to rule on indemnification; National Casualty and Western World appealed.
- This court affirms, holds both policies provide primary coverage, addresses use of an automobile, exclusions, and potential cost-sharing/reimbursement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether National Casualty has a duty to defend. | Batie's complaint alleges use of an ambulance; coverage should apply and National Casualty must defend. | Ambulance injuries from loading are not a 'use' and may be excluded by the professional services exclusion. | National Casualty has a duty to defend. |
| Whether National Casualty's professional services exclusion negates the duty to defend. | Some injuries result from administrative tasks, not professional services; exclusion does not negate defense. | Professional services exclusion should negate the duty if injuries arise from professional tasks. | Exclusion does not negate the duty; defense required. |
| Whether Western World's auto exclusion or other insurance provision limits its duty to defend. | Ambulance-related injuries trigger Western World's coverage; auto exclusion should negate defense. | Not all injuries fall under the auto exclusion; other insurance provision may limit duty. | Western World must defend as primary; auto exclusion and other-insurance provision do not negate the duty. |
| Whether Western World's 'other insurance' provision limits its defense duty. | Other insurance provision should cap Western World's defense obligation when another insurer defends. | Other insurance provision should limit only if all covered allegations fall under it. | Other insurance provision does not limit Western World's duty; Western World must defend. |
Key Cases Cited
- Nat'l Union Fire Ins. Co. v. Merchants Fast Motor Lines, 939 S.W.2d 139 (Tex. 1997) (eight corners rule governs duty to defend; coverage interpreted broadly)
- Mid-Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151 (Tex. 2010) (test for 'use' of automobile in Texas law)
- Mid-Century Insurance Co. v. Lindsey, 997 S.W.2d 153 (Tex. 1999) (injury produced by vehicle use when vehicle's purpose is to aid access)
- Guaranty Nat'l v. North River Insurance Co., 909 F.2d 133 (5th Cir. 1990) (distinguishes professional services vs. administrative tasks for exclusions)
- Zurich Am. Ins. Co. v. Nokia, Inc., 268 S.W.3d 487 (Tex. 2008) (if a complaint potentially includes a covered claim, insurer must defend entire suit)
- Lancer Ins. Co. v. Garcia Holiday Tours, 345 S.W.3d 50 (Tex. 2011) (significant nexus required between vehicle use and the accident)
- St. Paul Fire and Marine Ins. Co. v. Am. Int'l Surplus Lines Ins. Co., 1997 WL 160192 (N.D. Tex. 1997) (use of ambulance not limited to loading/unloading; context matters)