June 24, 2019
The U.S. Court of Appeals for the Eleventh Circuit, narrowly applying the definition of "professional services" determined that the services provided by an individual presenting himself as a counselor did not constitute "professional services". 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 (the Chapman's) had a ten-year-old son, Gregory, who was diagnosed with Attention Deficit Hyperactivity Disorder (ADHD) and had a history of behavioral problems, most severely stealing and a self-inflicted gunshot wound to the leg. The Chapman's received a referral from the Department of Children and Family Services and engaged Robert Taylor to provide mental health counseling services to Gregory. Taylor counseled Gregory for 5 months, between January and May 1998. In May 1998 Gregory committed suicide.
In 1999 Taylor pleaded guilty in state court for four felony counts of organized fraud and 20 counts of felony grand theft. One of the counts of offensive conduct was providing and collecting payment for unlicensed counseling services to patients, including Gregory.
The Chapman's filed suit asserting claims for wrongful death, unjust enrichment, unfair and deceptive trade, and infliction of severe emotional distress. The complaint alleged that Taylor was not a licensed drug abuse or mental health counselor for minors such as their son, and that Gregory's illness was exacerbated by Taylor's treatment, which "played a substantial part" in Gregory's death.
Taylor was insured under an Allied Health Care Provider Professional and Supplement Policy, issued by ACE American Insurance Company (ACE). ACE, however, refused to defend Taylor under this suit, first determining that no coverage existed because the alleged injuries did not arise from covered "professional services." ACE also argued that there was an exclusion that precluded coverage in the provisions of the policy.
The parties entered into a consent judgment that exceeded $5 million, which granted the Chapmans the right to collect under Taylor's policy. The Chapman's filed a declaratory judgment action against ACE to recover the judgment amount.
At summary judgment, the Florida Federal District Court sided with the insurer in holding that the allegations against Taylor did not include "professional services." The Eleventh Circuit court agreed, on appeal. The court reviewed the definition of "professional services" in the policy, which included "those services you are licensed, trained, or being trained to provide within the allied health field specified in your application and approved by us for coverage." In the policy, Taylor's professional occupation was listed as a drug and alcohol abuse counselor. Since the complaint did not contain allegations that Taylor provided Gregory with drug or alcohol abuse counseling, the conduct fell outside of the "professional services" definition in the policy. The court also found that Taylor lacked the required licensure, education, and experience to provide mental health counseling.
Editors Note: The decision, in this case, is noteworthy because it closely scrutinized the policy's definition of "professional services." The court also focused on Taylor's lack of a license. Historically, courts have emphasized the nature of the services provided as opposed to the licensure status of the insured.