## Facts

- A psychiatric patient, Margaret Wagner, was admitted to Texarkana Memorial Hospital on September 13, 1983, with directions to place her in a closed unit, but she was placed in an open unit because the closed unit was full.
- On September 14, 1983, Wagner jumped from a fourth-floor window and died.
- Wagner’s estate sued the hospital for wrongful death; a jury found negligence based on (1) improper monitoring/observation, (2) failure to maintain windows to prevent escape or suicide, and (3) inadequate staffing/training in the psychiatric unit, and found each act a proximate cause.
- The jury awarded $968,985.82, and the judgment became final.
- The hospital carried: (1) a North River primary CGL policy ($500,000 per occurrence) with a professional-services/medical-malpractice exclusion; (2) a U.S. Fire primary professional liability policy ($200,000 per claim; $600,000 aggregate); (3) Guaranty National excess coverage above the primary policies; and (4) Ranger excess coverage above all other insurance.
- U.S. Fire paid $200,000; North River paid nothing based on its exclusion; Guaranty National and Ranger paid the remaining judgment and sued to reallocate payment among the insurers.

## Issues

1. Whether the CGL policy’s professional-services exclusion barred coverage for the hospital’s liability arising from Wagner’s suicide.
2. Whether the U.S. Fire professional liability policy applied up to the $600,000 aggregate limit or was capped at $200,000 as a single “per-claim” limit for the Wagner judgment.

## Decision

- The Fifth Circuit affirmed summary judgment allocating coverage as follows.
- North River’s professional-services exclusion did not apply; the hospital’s liability included administrative/custodial and premises-related negligence (including window safety), which fell within CGL coverage up to North River’s limits.
- U.S. Fire’s obligation was limited to the $200,000 per-claim limit because the wrongful-death lawsuit arising from a single death constituted one claim, even though the jury found multiple negligent acts.

## Legal Principles

- Professional-services (medical-malpractice) exclusions in liability policies are applied by examining the nature of the alleged negligent conduct, not merely the insured’s status as a healthcare provider.
- Administrative, custodial, staffing, monitoring, and premises-safety failures may be treated as non-professional negligence for purposes of a professional-services exclusion, and therefore can trigger CGL coverage.
- A single injury/death giving rise to one lawsuit is commonly treated as a single “claim” under a professional liability policy’s per-claim limit, notwithstanding multiple supporting theories of negligence.
- On summary judgment, policy interpretation can resolve allocation disputes among primary and excess insurers when the material facts and policy terms are not genuinely disputed.

## Conclusion

The Fifth Circuit held that the hospital’s liability for a psychiatric patient’s suicide was not wholly excluded as “professional services” under the CGL policy because the negligence included operational and premises-safety failures, and it also held that the professional liability insurer’s exposure was limited to the $200,000 per-claim limit for a single wrongful-death claim.


Guaranty Nat’l Ins. Co. v. N. River Ins. Co., 909 F.2d 133 (5th Cir. 1990)