A federal judge from the Western District of Kentucky effectively dismissed the claim of an underwriter, which claimed that a tragic accident involving a student athlete at Bellarmine University during a men’s lacrosse practice was covered under Bellarmine’s insurance policies.
While the facts of the case were undisputed, the parties differed in their interpretation of the insurance contracts’ scope, specifically the Athletic Participants Exclusion Endorsement.
By way of background, Travelers Property Casualty Company of America (Travelers) issued Bellarmine a commercial general liability insurance policy, which was in effect from May 31, 2005, to May 31, 2006. While the policy covered enumerated bodily injuries, it included two endorsements — the Athletic Participants Exclusion Endorsement and the Xtend Endorsement. Notably, the Athletic Participants Exclusion Endorsement excluded coverage for bodily injury “to any person engaged in athletic, exercise, or sports activities” sponsored by Bellarmine or conducted on the university’s premises.
The Cincinnati Insurance Company (CIC), the co-defendant, also issued Bellarmine an insurance policy including commercial umbrella liability coverage. The CIC Policy included the Colleges or Schools Limitation Endorsement, which enumerated specific coverage exclusions that applied if the underlying insurance — the Travelers Policy — did not provide coverage.
In August 2005, Richard Passfield, a student at Bellarmine, underwent a medical screening as a prerequisite to participating on the university’s men’s lacrosse team. After the screening, a physician certified that the student athlete did not suffer from a disqualifying medical condition. Passfield then joined the men’s lacrosse team.
On October 31, 2005, Passfield was practicing, or attending conditioning, with the lacrosse team on Bellarmine’s campus. During this practice or conditioning session, Passfield “suffered a sudden medical emergency, collapsed, and died,” according to the suit.
Passfield’s estate filed a wrongful death suit against Bellarmine. Travelers denied liability coverage, stating that the Travelers Policy did not cover the allegations in the lawsuit because the policy excluded bodily injury suffered during athletics, exercise, or sports activities under the Athletic Participants Exception. CIC also denied coverage based upon Travelers’ denial and other exclusions in the CIC Policy.
Bellarmine settled the suit with Passfield’s estate and the estate agreed to dismiss claims against the university. Bellarmine subsequently brought suit against the underwriters, Underwriters Safety and Claims, Inc., in Jefferson County, Kentucky Circuit Court. The parties settled the action and Bellarmine assigned the right, title, and interest to the underwriters and Fireman’s Fund Insurance Company (FFIC) to any claims against Travelers and CIC arising from refusals to provide coverage.
Specifically, the plaintiffs sued for breach of contract arising from failure to defend and indemnify Bellarmine. The defendants countered with a motion for judgment on the pleadings. The plaintiffs moved for partial summary judgment.
The court noted that a narrow legal question was at play: Was the Passfield Complaint against Bellarmine within the scope of the university’s insurance contracts with Travelers or CIC?
It began by noting that the “interpretation of an insurance contract is a matter of law.” KSPED LLC v. Va. Sur. Co., 567 F. App’x 377, 382 (6th Cir. 2014) (quoting Westfield Ins. Co. v. Tech Dry, Inc., 336 F.3d 503, 507 (6th Cir. 2003)). “[A]n insurer has a duty to defend if there is any allegation which potentially, possibly or might come within the coverage terms of the insurance policy.” KSPED, 567 App’x at 382 (quoting Aetna Cas. & Sur. Co. v. Com., 179 S.W.3d 830, 841 (Ky. 2005)). This differs from the narrower duty to indemnify. KSPED, 567 App’x at 382. The Court must determine at the outset of the litigation whether an insurer is required to defend an insured. Id. The insurer has a duty to defend its insured “if the language of an underlying complaint against the insured brings the action within the scope of the insurance contract.” Westfield, 336 F.3d at 507.
“In interpreting insurance contracts, the court liberally construes the policy in favor of coverage, but also strictly construes exclusions,” it added, citing Gager v. Cincinnati Ins. Co., No. 4:14-CV-00036-JHM, 2015 U.S. Dist. LEXIS 38950 (W.D. Ky. Mar. 27, 2015) and Eyler v. Nationwide Mut. Fire Ins. Co., 824 S.W.2d 855, 859 — 60 (Ky .1992).
The Travelers policy contains two endorsements that modify it. The Athletic Participants Exclusion Endorsement states that the insurance “does not apply to ‘bodily injury’ to any person engaged in athletic, exercise, or sports activities Bellarmine sponsor, or which are conducted on premises Bellarmine own, rent or control.”
Another endorsement, the Xtend Endorsement, expands the definition of bodily injury to include “incidental medical malpractice injury.” The latter is defined as “bodily injury … sustained by a person, including death resulting from … the rendering of, or failure to render … medical … service or treatment, advice or instruction;…First aid; or … Good Samaritan services.”
The court wrote that “read with the endorsements, the terms of the Travelers Policy are clear and unambiguous. The policy only covers enumerated bodily injuries. The policy is modified with two endorsements. The Xtend Endorsement extends coverage to those bodily injuries sustained that result from rendering medical service, treatment, advice, or instruction, first aid, or Good Samaritan services, unless an endorsement excludes coverage. The Athletic Participants Exclusion Endorsement plainly and unambiguously excludes from coverage ‘any person engaged in athletic, exercise, or sport activities’ at Bellarmine.
“These endorsements are not, as the plaintiffs argue, ‘directly in conflict and inconsistent with the broadened incidental medical malpractice coverage provided by the XTEND Endorsement.’ Although the Xtend Endorsement does expand the scope of covered insureds to include, among others, athletic trainers while performing medical service, treatment, advice, instruction first aid, or Good Samaritan services, the entire provision is subject to the blanket caveat that it does not apply if excluded by an endorsement. Even with this broad exclusion, athletic trainers are still covered as insureds in some instances. Athletic trainers, for example, could cause injury during a consultation with a student athlete while that individual is not engaged in athletic, exercise, or sport activities.
“The parties do not dispute that Passfield was engaged in an athletic activity when the fatal injury occurred. The Passfield Complaint alleges that ‘Passfield was participating in a conditioning and/or practice session with the Bellarmine men’s lacrosse team when he suffered a sudden medical emergency, collapsed, and died.’ This activity occurred ‘on Bellarmine’s premises.’”
The plaintiffs attempted, unsuccessfully, to “re-contextualize the fatal injury as a result of medical malpractice or concurrently caused by medical malpractice and engagement in athletic activity,” according to the court. “The plaintiffs argue that the allegations in the Passfield Complaint were based ‘almost entirely on (a) Bellarmine’s failure to properly provide the pre-participation medical forms to the physicians who examined Passfield, and (b) Bellarmine’s failure to render proper medical treatment.’ These arguments are red herrings. The Passfield Complaint did not seek redress for a bodily injury that occurred during pre-participation athletic medical screenings. The policy specifically excludes bodily injury while engaged in athletic or sports activities. Passfield was engaged in such an activity at the time of the injury. While the court liberally construes insurance policies in favor of the insured, the court also strictly construes exclusions. This is an instance of the latter.” Thus, “the insurer did not have a duty to defend the insured in an action concerning the uncovered injury.”
As for the CIC policy, the court reasoned that similar exclusions applied and the Passfield Complaint against Bellarmine was not within the scope of that policy.
Underwriters Safety and Claims, INC., Plaintiffs and Fireman’s Fund Insurance Company v. Travelers Property Casualty Company of America and the Cincinnati Insurance Company; W.D. Ky.; CIVIL ACTION NO. 3:15-CV-00183-CRS; 2016 U.S. Dist. LEXIS 7429; 1/22/16
Attorneys of Record: (for plaintiffs) Bradley E. Cunningham, David J. Kellerman, Mark S. Fenzel, LEAD ATTORNEYS, Middleton Reutlinger, Louisville, KY. (for defendants) Katherine S. Dozier, Richard Paul Schiller, LEAD ATTORNEYS, Schiller Barnes Maloney PLLC, Louisville, KY; Kimberly A. Kyle, LEAD ATTORNEY, Kohnen & Patton LLP, Cincinnati, OH.
