May 28, 2019
Upholding the lower court's ruling, the U.S. Court of Appeals for the Eleventh Circuit has ruled that a Chubb Ltd. unit is not obligated to pay a $5 million settlement in a case where the parents of a 10-year-old who committed suicide filed suit against the therapist who had provided treatment to their son. The case is Chapman v. Ace Am. Ins. Co., No. 18-12972, 2019 U.S. App. LEXIS 15013 (11th Cir. May 21, 2019).
Mark and Barbara Chapman had a 10-year old boy named Gregory Chapman who was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) and had a history of behavioral problems, including stealing and a self-inflicted gunshot to the leg. After receiving a referral from the Department of Children and Family Services, the Chapmans engaged Robert Taylor to provide mental health services to Gregory. Taylor counseled Gregory between January and May 1998. Gregory committed suicide in May, 1998.
In 1999 Taylor pleaded guilty to four felony counts of fraud and twenty felony counts of grand theft. Among other things, Taylor's offense included providing and collecting payment for unlicensed counseling services to patients. Gregory was one of those patients.
The Chapmans filed suit against Taylor alleging that he was not a licensed drug abuse or mental health counselor for minors such as Gregory and that Taylor's treatment aggravated Gregory's mental problems, problems which played a substantial part in Gregory's death. The Chapmans asserted claims for wrongful death, unjust enrichment, unfair and deceptive trade practices, and infliction of severe emotional distress. The parties settled the case for more than $5 million, and Taylor assigned his rights to his insurance coverage to the Chapmans. Taylor had his insurance coverage under an allied health care provider professional and supplemental policy issued by Ace, now a Chubb unit.
The insurer refused to defend Taylor and argued that there was no coverage under the policy because the policy covered “professional services” and the alleged injuries did not come from “professional services” and instead fell under the policy's exclusions. The parents filed suit in U.S. District Court in Tampa, which ruled in favor of the insurer. The ruling was upheld by a unanimous three-judge appeals court panel.
The court explained that the complained-of conduct clearly fell outside of the Policy's definition of “professional services”, defined as “Drug & Alcohol Abuse Counsel(ing) services for which Taylor was “licensed, trained, or being trained to provide.”
Editors Note: In this case, the Chapman's argument was their own downfall. The Chapmans alleged that Taylor provided only mental health counseling to Gregory, not substance abuse counseling. They also alleged that Taylor lacked the licensing, education, or experience to provide mental health counseling to Gregory, which necessitates a conclusion that the counseling services were not “professional services” as are covered under the policy.