Physicians Ins. Co. v. Pistone

• Decision Date: 26 February 1999
• Citation: 555 Pa. 616,726 A.2d 339
• Parties: PHYSICIANS INSURANCE COMPANY and Professional Adjustment Services, Inc. v. Francis J. PISTONE, M.D., Associated Surgeons, Ltd., Annette Yaworsky and John Yaworsky. Appeal of Annette Yaworsky and John Yaworsky.
• Court: Pennsylvania Supreme Court

555 Pa. 616

726 A.2d 339

PHYSICIANS INSURANCE COMPANY and Professional Adjustment Services, Inc. v. Francis J. PISTONE, M.D., Associated Surgeons, Ltd., Annette Yaworsky and John Yaworsky.

Appeal of Annette Yaworsky and John Yaworsky.

Supreme Court of Pennsylvania.

Argued December 10, 1997.

Decided February 26, 1999.

Frederick J. Fanelli, Sudhir R. Patel, Pottsville, for Annette & John Yaworsky.

Michael J. Kowalski, Wilkes Barre, for Physicians Ins. Co. & Professional Adjustment.

Edward H. Heitmiller, Pottsville, for Francis Pistone, M.D.

Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ.

OPINION OF THE COURT

NEWMAN, Justice.

We granted allowance of appeal in this matter to determine when conduct constitutes the rendering of professional health care services.

FACTS

On September 19, 1990, Annette Yaworsky was admitted to Pottsville Hospital and the Warne Clinic (the Hospital), with complaints of abdominal pain. Francis J. Pistone, M.D., who was on call that night, examined her and ordered a series of tests. During the next few days, physicians other than Dr. Pistone treated her for gallstones. On September 22, 1990, Dr. Pistone entered Annette Yaworsky's semi-private room to perform an examination, and closed the privacy curtain around the bed. No other patient was in the room. He then fondled her breasts, exposed his genitals and masturbated in front of her. As a result of this incident, Dr. Pistone was charged with indecent assault and indecent exposure. He pled nolo contendere to a charge of indecent assault, and the charge of indecent exposure was nolle prossed.

On March 23, 1993, Annette Yaworsky and her husband filed suit in the Court of Common Pleas of Schuylkill County (trial court) against Dr. Pistone, his employer Associated Surgeons, Ltd. (Associated) and the Hospital. The complaint alleged, inter alia, that Dr. Pistone was negligent in exposing his patient to his sexual perversion, that Associated was negligent in hiring him, and that the Hospital was negligent in granting him staff privileges. Dr. Pistone and Associated both requested that their insurer, Physicians Insurance Company (PIC), defend them in the action. On April 19, 1992, PIC informed Dr. Pistone that it was denying coverage under its policy and that it would neither defend nor indemnify him with respect to the Yaworskys' claim. The doctor did not file an answer to the Yaworskys' complaint, and a default judgment was entered against him. PIC agreed to defend Associated, but only against the claim of the negligent hiring of Dr. Pistone. PIC then filed an action seeking a declaratory judgment that it not be required to defend or indemnify Dr. Pistone or Associated. The Yaworskys filed a motion for summary judgment, and PIC filed a cross-motion for summary judgment. The trial court denied the Yaworsky's motion and granted PIC's cross-motion. The Superior Court affirmed. The relevant portion of the insurance policy issued by PIC to Dr. Pistone and Associated provides:

INSURING AGREEMENT: OCCURRENCE COVERAGE

Subject to the terms, conditions and exclusions contained herein the Company will pay on behalf of the Insured amounts, up to the limits of liability set forth in this policy for which the Insured shall become legally obligated to pay as damages arising out of an Occurrence resulting in injury to any person that takes place during the policy period, because of:

COVERAGE A — Individual Professional Liability:

Injury arising out of the rendering of or failure to render professional health care services by the individual Insured, or by any person for whose acts or omissions the Insured is legally responsible and performed in the practice of the Insured's profession as described in the Declarations Page. Coverage A does not cover liability which may arise solely as a result of the Insured's being a member, stock-holder or partner of an association, corporation or partnership.

COVERAGE B — Corporation or Partnership Liability:

Injury arising out of the rendering of or failure to render professional health care services by a person for whose acts or omission the Insured association, corporation or partnership is legally responsible.

Emphasis added. The term "occurrence," is defined in the policy as:

An accident or event, including continuous or repeated exposure to injurious conditions, that result in Injury or Property Damage neither expected nor intended from the standpoint of the Insured.

The trial court determined that the incident was not intended or expected, and therefore constituted an "occurrence" under the policy. It then concluded that "[n]one of the acts by Pistone as alleged in the Yaworsky complaint could reasonably be deemed to be of a professional nature or done in the course of delivering health care services to Ms. Yaworsky." Trial Court Opinion at 7. We granted allocatur because this Court has not yet defined the term "professional health care services."¹

DISCUSSION

Many jurisdictions that have considered this issue have adopted the analysis set forth in Marx v. Hartford Accident and Indemnity Co., 183 Neb. 12, 157 N.W.2d 870 (1968):

The insurer's liability is . . . limited to the performing or rendering of "professional" acts or services. Something more than an act flowing from mere employment or vocation is essential. The act or service must be such as exacts the use or application of special learning or attainments of some kind. The term "professional" in the context used in the policy provision means more than mere proficiency in the performance of a task and implies intellectual skill as contrasted with that used in an occupation for production or sales of commodities. A "professional" act or service is one arising out of a vocation, calling, occupation or employment involving specialized knowledge, labor or skill, and the skill involved is predominantly mental or intellectual, rather than physical or manual. . . . In determining whether a particular act is of a professional nature, or a professional service, we must look not to the title or character of the party performing the act, but to the act itself.

Id. at 13-14, 157 N.W.2d at 871-872. See, e.g., St. Paul Fire & Marine Ins. Co. v. Asbury, 149 Ariz. 565, 566, 720 P.2d 540 (Ct.App.1986); Hirst v. St. Paul Fire & Marine Ins. Co., 106 Idaho 792, 683 P.2d 440 (Ct.App.1984); Roe v. Federal Ins. Co., 412 Mass. 43, 587 N.E.2d 214 (1992); St. Paul Fire & Marine Ins. Co. v. Love, 459 N.W.2d 698 (Minn.1990); Niedzielski v. St. Paul Fire & Marine Ins. Co., 134 N.H. 141, 589 A.2d 130 (1991); New Mexico Mut. Liability Co. v. LaMure, 116 N.M. 92, 860 P.2d 734 (1993); Vigue v. John E. Fogarty Memorial Hosp., 481 A.2d 1 (R.I.1984); Standard Fire Ins. Co. v. Blakeslee, 54 Wash.App. 1, 771 P.2d 1172 (1989). In Roe, the Supreme Court of Massachusetts elaborated on the applicability of the Marx standard to the health care profession:

The standard recognizes several relevant considerations: (1) that membership in a profession has traditionally been recognized as requiring the possession of special learning acquired through considerable rigorous intellectual training; (2) that physicians and dentists, when rendering patient care, are called upon to use or apply special learning or attainments; (3) that, when there is a complaint of malpractice, attention should focus on the act or service performed rather than the fact that the alleged wrongdoer was a physician or a dentist because the "scope of professional services does not include all forms of a medical professional's conduct simply because he or she is a doctor or a dentist," Niedzielski v. St. Paul Fire & Marine Ins. Co.,... 134 N.H. at 144, 589 A.2d 130; and (4) that, to fall within the insuring language like that used here, there must be a medical or dental act or service that causes the harm, not an act or service that requires no professional skill.

Roe, 412 Mass. at 48, 587 N.E.2d at 217.

Consistent with the definition of "professional acts or services" set forth in Marx, the majority of jurisdictions have concluded that professional liability policies do not provide coverage for health care practitioners who sexually assault their patients. David S. Florig, Insurance Coverage for Sexual Abuse or Molestation, 30 Tort & Ins. L.J. 699, 724 (1995).² As noted by the New Jersey Supreme Court in Princeton Ins. Co. v. Chunmuang, 151 N.J. 80, 698 A.2d 9 (1997), the case most relied upon for this rule is Hirst, supra. In Hirst, a high school student sought treatment for an injury to a finger and a thumb. The physician, Dr. Donehue, drugged him with tranquilizers and sexually assaulted him during repeated visits. The court stated:

[E]ven if we assume that "professional services" embrace all enumerated activities within the "practice of medicine," including "treat[ment] [of] any human disease or injury," there still must be a causal relationship between such treatment and the harm alleged by the malpractice claimant. Here, as the district court noted, there was no specific showing in the record that Mark was damaged in any way simply from the administration of the drugs. Nor was there any showing that Donahue negligently mistreated the boy's injuries or illness. The district court found that, in spite of the Hirsts' general allegations, the action in reality was one in tort for sexual molestation and that the use of the drugs merely rendered Mark more susceptible to Donahue's "advances." We agree.

Id. at 796, 683 P.2d at 444. In the instant matter, PIC asserts that this Court should adopt the definition of "professional services" set forth in Marx, a definition that does not include the acts Dr. Pistone performed in Annette Yaworsky's room on September 22, 1990.

Some jurisdictions look to the nature of the services provided by the physician at the time the sexual assault takes place when determining whether the act constitutes rendering professional services. In St. Paul...