New Mexico Physicians Mut. Liability Co. v. LaMure

• Decision Date: 31 August 1993
• Docket Number: No. 20273,20273
• Citation: 860 P.2d 734,1993 NMSC 48,116 N.M. 92
• Parties: NEW MEXICO PHYSICIANS MUTUAL LIABILITY COMPANY, Plaintiff-Appellee, v. David Sylvester LaMURE, Sr., M.D., Defendant-Appellant, and Lillian Gonzalez, a/n/f of Kristopher Gonzalez, Intervenor-Appellant.
• Court: New Mexico Supreme Court

Page 734

860 P.2d 734

116 N.M. 92

NEW MEXICO PHYSICIANS MUTUAL LIABILITY COMPANY, Plaintiff-Appellee, v. David Sylvester LaMURE, Sr., M.D., Defendant-Appellant and Lillian Gonzalez, a/n/f of Kristopher Gonzalez, Intervenor-Appellant.

No. 20273.

Supreme Court of New Mexico.

Aug. 31, 1993.

[116 N.M. 93] Phil Brewer & Paul Snead, Paul Snead, Roswell, for appellant LaMure.

Anderson Carter, II, Las Cruces, Charles Dunn, Lubbock, TX, for appellant Gonzalez.

Kemp, Smith, Duncan & Hammond, A. Drew Hoffman, John P. Eastham, Albuquerque, for appellee.

OPINION

FROST, Justice.

This appeal from a declaratory judgment requires us to determine whether an insurer must indemnify a physician under his medical malpractice insurance policies for liability resulting from allegations of criminal sexual assault. Plaintiff-appellee New Mexico Physicians Mutual Liability Company (the insurer) filed suit to establish nonliability for coverage under medical malpractice insurance policies issued to defendant-appellant, David S. LaMure, Sr., M.D. LaMure had been sued by Lillian Gonzalez on behalf of her minor son, Kristopher Gonzalez, for damages resulting from LaMure's sexual assault of Kristopher. Gonzalez intervened in this declaratory action. Granting summary judgment for the insurer, the district court held that LaMure's malpractice insurance did not cover damages resulting from the underlying sexual assault litigation and that the insurer was not obligated to indemnify LaMure. The district court specifically found that LaMure's acts were criminal and did not constitute "rendering or failing to render professional services" within the coverage provisions of his insurance. We affirm.

FACTS

In 1991, LaMure was convicted for the sexual assault of Kristopher Gonzalez.¹ The conviction included five counts of criminal sexual contact of a minor, two counts of criminal sexual penetration, and a count of extortion. Specifically, LaMure was found guilty of touching or applying force to Kristopher's intimate parts by grabbing his groin, unlawfully and intentionally causing him to touch LaMure's penis, wrongfully compelling Kristopher to perform the act of fellatio on LaMure against his will by threatening to harm his family and impugn his reputation, and causing Kristopher to engage in fellatio by touching LaMure's penis to Kristopher's mouth through force or coercion.

Based upon the same acts of abuse against Kristopher that supported the criminal convictions, Lillian Gonzalez sued LaMure in federal court for civil damages on behalf of her son in Gonzalez v. LaMure, No. CIV 90-0104 JC (D.C.N.M.1990).² The federal complaint alleged that on August 18, 1987, LaMure undertook to care and treat Kristopher for an infected thumb. Under the pretense of treating Kristopher for the infected thumb, LaMure forced Kristopher into homosexual behavior. LaMure continued to engage in a homosexual relationship with Kristopher for eighteen months. With the exception of the first sexual assault, LaMure's abuse of Kristopher did not occur under the guise of medical treatment. The insurer financed LaMure's defense in the federal action under an express reservation of rights until the district court in the present declaratory action ruled that it had no obligation to do so.

The insurer issued three medical malpractice policies to LaMure, identical in all respects but covering different periods of time continuously from December 1, 1986 to February 19, 1989. It is undisputed that the acts alleged in the federal complaint occurred within this period of time. Under the policy section entitled "Indemnity," the insurer agreed:

To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury or personal injury resulting from rendering or failing to render, during the policy period, professional services by the insured, or by any person for whose acts or omissions the insured is legally responsible, performed in the practice of the insured's profession....

The policies also contained several express exclusions. The criminal acts exclusion stated:

This policy does not apply ... [t]o liability of the insured arising out of the performance of a criminal act; provided, that this exclusion shall not apply with respect to defense of suits unless the insured is connected in the original prosecution based on such acts or omissions for which claim or suit is brought against the insured[.]

"Criminal act" is not defined in the policies, and the policies do not otherwise more specifically address the treatment of "criminal acts" resulting from rendering professional services.

Appellant LaMure and intervenor Gonzalez argue primarily that the federal complaint pleads malpractice covered by LaMure's malpractice insurance. They also contend that the Medical Malpractice Act, NMSA 1978, Secs. 41-5-1 to -29 (Repl.Pamp.1989 & Cum.Supp.1993), and public policy considerations compel a finding of coverage.

The insurer responds that under the express language of LaMure's policies, liability resulting from the federal complaint is not covered because LaMure's acts do not constitute "rendering or failing to render ... professional services by the insured." Coverage is also precluded, the insurer claims, because LaMure's alleged acts are criminal and his malpractice policies expressly exclude coverage for liability resulting from criminal acts. The insurer maintains that such an insurance exclusion should be enforced because it is supported by the public policy of denying indemnification to an insured for his intentional criminal conduct.

DISCUSSION

The central issue for review is whether the insurer is required to indemnify LaMure for damages resulting from the federal litigation. If the allegations of the federal complaint clearly fall outside the provisions of LaMure's professional liability insurance policies, indemnity by the insurer is not required. See Bernalillo County Deputy Sheriffs Ass'n v. County of Bernalillo, 114 N.M. 695, 697, 845 P.2d 789, 791 (1992). When a court relieves an insurer of liability under the noncoverage provisions of an insurance policy, the insurer is also relieved of any duty to defend the insured from lawsuits over the uncovered acts. Foundation Reserve Ins. Co. v. Mullenix, 97 N.M. 618, 620, 642 P.2d 604, 606 (1982).

We interpret unambiguous insurance contracts in their usual and ordinary sense unless the language of the policy requires something different. Bernalillo County Deputy Sheriffs, 114 N.M. at 697, 845 P.2d at 791. An insurance policy should be construed as a complete and harmonious instrument designed to accomplish a reasonable end. Knowles v. United Servs. Auto. Ass'n, 113 N.M. 703, 705, 832 P.2d 394, 396 (1992). The parties to an insurance contract may validly agree to extend or limit insurance liability risks. Safeco Ins. Co. of Am. v. McKenna, 90 N.M. 516, 519, 565 P.2d 1033, 1036 (1977). Thus, exclusions in insurance policy coverage provisions that are clear and unambiguous and that do not conflict with public policy expressed by statute will be enforced. Jimenez v. Foundation Reserve Ins. Co., 107 N.M. 322, 324, 757 P.2d 792, 794 (1988). In evaluating whether an exclusionary provision conflicts with a particular statute and is therefore void, our inquiry focuses on the legislative intent behind the statute. Chavez v. State Farm Mut. Auto. Ins. Co., 87 N.M. 327, 328-29, 533 P.2d 100, 101-02 (1975).

An insurance policy provision is ambiguous if it is reasonably and fairly susceptible to different constructions. Knowles, 113 N.M. at 705, 832 P.2d at 396. While ambiguous policies should be construed liberally in favor of the insured, Safeco, 90 N.M. at 520, 565 P.2d at 1037, policies that are not ambiguous and do not contravene public policy must be enforced as written. Security Mut. Casualty Co. v. O'Brien, 99 N.M. 638, 641, 662 P.2d 639, 642 (1983). The fact that a particular policy contains a broad coverage provision followed by a specific coverage exclusion does not automatically render the policy ambiguous or invalidate the exclusion. See Weldon v. Commercial Union Assurance Co., 103 N.M. 522, 524, 710 P.2d 89, 91 (1985). This is true as long as the exclusion is not so broad or nebulous that it swallows and effectively nullifies a broad insuring clause. Knowles, 113 N.M. at 707-08, 832 P.2d at 398-99.

LaMure's malpractice policies contain a broad coverage provision promising to indemnify him for personal liability resulting from "rendering professional services." This coverage clause is qualified by the specific exclusion from coverage of liability arising from criminal acts. These clauses are not ambiguous because they can be reasonably construed in only one way--liability from "rendering professional services" is covered unless it stems from "criminal acts." Our focus therefore turns to interpreting these operative contract terms in context.

Except for LaMure's first attack on Kristopher, LaMure's assaults did not occur under the guise or pretense of medical care or treatment and therefore cannot be attributed to the "rendering [of] professional services." Nor do we believe that Kristopher's injuries from LaMure's first sexual assault, although committed under the pretense of medical care, resulted from "rendering professional services." Several other jurisdictions have addressed the question of whether a sexual assault on a patient by a health care professional arises or results from rendering "professional services" under the coverage provisions of professional liability insurance like LaMure's. These cases generally fall into three categories.

The most common scenario involves a physician or dentist who sexually assaults a patient at his office during medical treatment or examination. These cases hold that "professional services" in professional liability insurance coverage clauses do not include sexual assaults on patients, regardless of...