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Chubb wins coverage dispute over child’s suicide

Child suicide

A Chubb Ltd. unit is not obligated to pay a $5 million settlement in a case where parents of a 10-year-old who committed suicide had filed suit against the therapist who had treated their son, says a federal appeals court in upholding a lower court’s ruling.

Mark and Irene Chapman’s 10-year-old son Gregory was diagnosed with attention deficit hyperactivity disorder and had a history of behavioral problems, including stealing and a self-inflicted gunshot wound to the leg, according to Tuesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Mark Chapman et al. v. Ace American Insurance Co.

After receiving a referral from the Department of Children and Family Services, the Chapmans engaged Robert Taylor, of Tampa, Florida-based Recovery Concepts, to provide Gregory with mental health counseling services. Mr. Taylor conducted counseling sessions with Gregory between January and May 1998, when the boy committed suicide, according to the ruling.

In 1999, Mr. Taylor pleaded guilty in state court to four felony counts of organized fraud and 20 felony counts of grand theft, according to the ruling. His offense included, among other things, providing, and collecting payment for, unlicensed counseling services to patients including Gregory.

The parents filed suit against Mr. Taylor, alleging he was not a licensed drug abuse or mental health counselor for minors such as Gregory, and that the boy “suffered from mental problems which were aggravated” by Mr. Taylor’s treatment, which “played a substantial part” in his death.

They asserted claims for wrongful death, unjust enrichment, unfair and deceptive trade practices, and infliction of severe emotional distress. The case was settled for more than $5 million, and Mr. Taylor assigned his rights to his insurance coverage to Gregory’s parents.

Mr. Taylor was insured under an allied health care provider professional and supplemental policy issued by Ace, now a Chubb unit, according to the ruling.

The insurer refused to defend Mr. Taylor and contended there was no coverage under its policy because the alleged injuries did not arise from covered “professional services,” and fell under its policy’s exclusion provisions.

The parents filed suit against the insurer in U.S. District Court in Tampa, which ruled in Ace’s favor. The ruling was upheld by a unanimous three-judge appeals court panel.

“Taylor’s complained-of conduct all falls clearly outside the Policy’s definition of ‘professional services,’” said the ruling. “Under the plain language of the Policy, ‘professional services’ means ‘Drug & Alcohol Abuse Counsel(ing)’ services for which Taylor was ‘licensed, trained, or being trained to provide.’

“Plaintiffs alleged only that Taylor provided mental health counseling to Gregory: not substance abuse counseling. Moreover, Plaintiffs’ allegations that Taylor lacked the required licensure, education, or experience to provide mental health counseling to Gregory compels a conclusion that Taylor’s complained-of counseling services were not ‘professional services’ under the Policy,” said the ruling, in affirming the lower court’s ruling.

Chubb’s law firm had no comment, while the plaintiff attorneys in the case could not immediately be reached for comment.


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