Facts
- Millers issued a Deluxe Businessowners Policy to Dr. Harry Winkworth and his professional corporation that included a professional services exclusion defining professional services to include medical services.
- Estefana Flores, a patient, suffered a debilitating stroke after Florence Curtis, an untrained and unsupervised assistant in Dr. Winkworth’s office, administered a contraindicated estrogen injection.
- Flores sued Dr. Winkworth, his professional corporation, and Curtis, alleging negligence arising from the injection and asserting theories including malpractice and employer-based fault (e.g., negligent supervision/employment).
- Millers filed a declaratory judgment action seeking a ruling that it had no duty to defend or indemnify the insureds because the claims arose out of professional (medical) services.
Issues
- Whether the policy’s professional services exclusion relieved the insurer of any duty to defend or indemnify the physician and his corporation for claims arising from an improper estrogen injection administered in the course of patient care.
- Whether pleading theories such as negligent hiring, training, or supervision avoids a professional services exclusion when the injury is causally connected to medical treatment.
Decision
- The New Mexico Supreme Court affirmed summary judgment for Millers.
- The court held the claims arose out of professional services (medical services) and fell within the professional services exclusion.
- Because the exclusion eliminated any potential for coverage, Millers had no duty to defend and no duty to indemnify the insureds in the underlying action.
Legal Principles
- A professional services exclusion that includes medical services bars coverage for injuries causally connected to the rendering of medical treatment, even if the complaint also alleges negligent hiring, training, or supervision.
- “Arising out of” requires only a minimal causal connection between the injury and the excluded professional service, not strict proximate cause.
- The duty to defend is triggered only if the complaint alleges facts that are arguably within coverage; where an exclusion clearly applies to all pleaded factual bases for liability, there is no duty to defend or indemnify.
Conclusion
Because Flores’s injury was caused by the administration of medication as part of patient care, the claims were inseparable from medical services and were excluded under the policy’s professional services exclusion; the insurer therefore owed neither defense nor indemnity.