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Insurer must defend assisted living facility against residents’ lawsuit

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An insurer must defend a North Carolina assisted living facility in a lawsuit that charges the adult home failed to provide adequate meals and activities, a federal appeals court said Tuesday in affirming a lower court.

In November 2018, residents of Lake Pointe Assisted Living Inc., an adult care home in Lake Waccamaw, North Carolina, filed a class-action suit in state court against the facility and two of its officers, alleging they did not provide them with nutritious meals, assistance with day-to-day activities and adequate programming, as required by North Carolina law, according to the ruling by the 4th U.S. Circuit Court of Appeals in Richmond, Virginia, in Church Mutual Insurance Co. v. Lake Pointe Assisted Living Inc. et al.

Merrill, Wisconsin-based Church Mutual, which had issued primary and umbrella policies to the facility, sued Lake Pointe, the officers and the residents in U.S. District Court in Greenville, North Carolina, seeking a declaratory judgment it did not have to defend or indemnify Lake Pointe or its officers in the litigation.

The district court ruled against the insurer and was affirmed by a three-judge appeals court panel.

The policies require that “a professional healthcare incident” caused the injury for there to be coverage, it said. This includes failure “to comply with any right of a resident under any state or federal law” regulating a resident health care facility.

“North Carolina regulates the quality of food adult care homes serve and the amount of activities they provide,” the panel said in concluding that the residents “have alleged a professional health care incident” and Church Mutual has a duty to provide a defense.

Attorneys in the case did not respond to requests for comment.