Millers Cas. Ins. Co. of Texas v. Flores

Decision Date25 May 1994
Docket NumberNo. 20190,20190
Citation876 P.2d 227,117 N.M. 712,1994 NMSC 58
PartiesMILLERS CASUALTY INSURANCE COMPANY OF TEXAS, Plaintiff-Appellee, v. Estefana FLORES, Defendant-Appellant.
CourtNew Mexico Supreme Court
OPINION

BACA, Justice.

Defendant-Appellant, Estefana Flores ("Flores") appeals from a trial court order denying her motion for summary judgment and granting summary judgment in favor of Plaintiff-Appellee, Millers Casualty Insurance Company of Texas ("Millers"). The trial court concluded that an insurance policy issued by Millers to Dr. Harry Winkworth ("Dr. Winkworth") excluded coverage for injuries that Flores suffered at the hands of Dr. Winkworth's assistant. On appeal, we address whether the trial court erred in granting summary judgment in favor of Millers. We review this case under SCRA 1986, 12-102(A)(1) (Repl.Pamp.1992), and affirm.

I.

Flores, a patient of Dr. Winkworth, suffered a debilitating stroke after Florence Curtis ("Curtis"), Dr. Winkworth's unsupervised and untrained assistant, gave Flores a contraindicated injection of estrogen. In September of 1989, Flores brought suit against Dr. Winkworth, his professional corporation, and Curtis. On May 2, 1990, Millers, having sold Dr. Winkworth a Deluxe Businessowners Policy, filed a declaratory judgment action against Flores, Dr. Winkworth, and Curtis. Based on an exclusion in the policy, Millers sought a declaration that it had no duty to defend or indemnify Dr. Winkworth or his corporation for the claims raised in Flores's lawsuit.

On April 1, 1991, Flores made a motion for summary judgment in Millers's declaratory judgment action. Flores contended that the insurance policy sold by Millers to Dr. Winkworth required Millers to defend Dr. Winkworth, and obligated Millers to satisfy any judgment or settlement in her case against Dr. Winkworth. On April 9, 1991, Millers filed a response to Flores's summary judgment motion and a cross-motion for summary judgment. Millers claimed that the policy issued to Dr. Winkworth "unambiguously excluded liability for injury arising out of 'professional services,' " and thus, did not provide coverage for Flores's medical malpractice claims against Dr. Winkworth and Curtis.

The trial court held a hearing on the summary judgment motions on August 27, 1991. Following argument of counsel, the trial court denied Flores's motion for summary judgment and granted Millers's cross-motion. Flores appeals the trial court's ruling to this Court.

II.

On appeal, we address whether the trial court correctly granted summary judgment in favor of Millers. Summary judgment is properly granted in a case when no genuine issues of material fact are presented and the moving party is entitled to judgment as a matter of law. SCRA 1986, 1-056(C) (Repl.Pamp.1992); New Mexico Physicians Mut. Liab. Co. v. LaMure, 116 N.M. 92, 100, 860 P.2d 734, 742 (1993). Both parties agree that no issues of material fact are presented. Thus, we determine whether the trial court correctly concluded that Millers was entitled to judgment as a matter of law.

The Deluxe Businessowners Policy that Millers sold to Dr. Winkworth stated:

[Millers] will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, property damage or personal injury caused by an occurrence to which this insurance applies.

* * * * * *

[T]his policy does not apply:

* * * * * *

8. to bodily injury or property damage due to rendering of or failure to render any professional service, including but not limited to:

(a) legal, accounting, advertising, engineering, drafting, architectural, and

(b) medical, dental, pharmacological, cosmetic, hearing aid, optical, or ear piercing services....

(Emphasis omitted). In granting summary judgment for Millers, the trial court concluded that Flores's claims sounded in medical malpractice, and that the insurance policy's professional services exclusion--by including medical services in the definition of "professional service"--precluded coverage for such claims.

Flores raises several arguments to assert that the professional services exclusion should not preclude coverage for her claims. Flores concedes that the primary purpose of the Businessowners policy was to cover against liability arising from premises liability, and that Curtis's act of giving her the contraindicated injection constituted the rendering of a medical service for which coverage was excluded. Flores argues, however, that the professional services exclusion does not apply to her claims that Dr. Winkworth negligently hired, failed to train and inadequately supervised Curtis. 1 Flores contends that Dr. Winkworth's decision to hire an underqualified employee, and his failure to adequately train and supervise Curtis, were administrative decisions rather than the rendition of medical services, and that these decisions were removed in time from Curtis's act of failing to render adequate medical care. Flores contends that Dr. Winkworth's bad administrative decisions--rather than constituting the rendition of injury-causing medical services--gave rise to a 'deficiency in the premises' for which coverage under the Businessowners policy must apply.

We find Flores's arguments unpersuasive. Although this case presents an issue of first impression in New Mexico, numerous cases have upheld professional services exclusions on a variety of grounds. In one case, Mason v. Liberty Mutual Insurance Co., 370 F.2d 925, 926 (5th Cir.1967), the plaintiff sued after suffering injuries as the result of an injection administered by a student nurse. After losing summary judgment at the trial court level, the plaintiff appealed, arguing that "there was administrative, as distinguished from professional, negligence in permitting a student nurse to administer the treatment." Id. The Fifth Circuit Court of Appeals upheld the professional services exclusion clause, applying the rule that when determining what constitutes professional services, "we should look not to the title or the character of the party performing the act but to the act itself." Id. (quoting D'Antoni v. Sara Mayo Hosp., 144 So.2d 643, 646 (La.Ct.App.1962)); cert. denied ); see also Multnomah County v. Oregon Auto. Ins. Co., 256 Or. 24, 470 P.2d 147, 150 (1970) (excluding coverage under a professional services exclusion, and holding that when "determining whether a particular act or omission is of a professional nature, the act or omission itself must be looked to and not the title or character of the party who performs or fails to perform the act").

Other cases have upheld the effectiveness of professional services exclusions by holding that while nonprofessional personnel may perform some duties that lead to liability, the physician bears ultimate responsibility for the duty performed, and thus the duty is part of rendering professional services. See Alpha Therapeutic Corp. v. St. Paul Fire & Marine Ins. Co., 890 F.2d 368, 370-71 (11th Cir.1989); Northern Ins. Co. of N.Y. v. Superior Court, 91 Cal.App.3d 541, 154 Cal.Rptr. 198, 200 (1979). One court, in construing a policy that excluded coverage for "professional services" and "business pursuits," noted that all the allegations, regardless of the underlying legal theories, arose out of the same professional activity. See Fire Ins. Exch. v. Alsop, 709 P.2d 389, 390-91 (Utah 1985). Because the professional activity was conceded to be a "business pursuit," and was also considered to be the rendering of "professional services," coverage under the policy was excluded. Id. at 391.

In the instant case, we find the rationale employed in Northern Insurance Co. of New York compelling. The fact that a physician utilizes a nonphysician assistant to perform a professional duty does not "alter the professional nature of that nondelegable duty." 154 Cal.Rptr. at 200. It is undeniable that the injury to Flores occurred "as a direct result of the performance of professional services" for which Dr. Winkworth had ultimate responsibility. Id. Coverage for injuries caused by the performance of these professional services is excluded under Dr. Winkworth's policy.

Flores contends that "Dr. Winkworth's failure to provide competent personnel in his practice cannot reasonably be seen as 'an integral part of the rendering of medical care.' " We disagree. In our view, Dr. Winkworth was in the business of providing medical services to patients. The hiring and supervision of employees to assist in giving care to his patients constituted an integral part of providing medical services to these patients. See Perkins v. Kearney, 155 A.D.2d 191, 553 N.Y.S.2d 552, 553 (1990) (stating that the actions of those personnel assisting a physician are a central part...

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