Professional Negligence Law Reporter

A federal district court held that a drug treatment center’s insurance policy did not cover the alleged actions of a counselor who had a sexual relationship with a client.

Cleanse Clinic PSC, a drug treatment center in Louisville, Ky., employed drug counselor Corey Kelley and assigned him to work with Terra Wilson. While working together, Kelley and Wilson had a sexual relationship. Wilson later sued the clinic and Kelley, alleging sexual assault and battery, negligent hiring, and other claims. A policy issued to the clinic by Medical Protective Co. (MedPro) covered claims arising from the rendering or failing to render professional services but excluded coverage for any claim for damages arising out of a criminal act, a willful tort, or a sexual act.

MedPro moved for judgment on the pleadings on its amended complaint for declaratory judgment. The insurer argued that Wilson’s claims against Kelley do not constitute professional services as defined by the policy.

Granting the motion, the district court found that the duty to defend or indemnify arises out of an insurance contract, not a complaint. Citing Kentucky law, the court added that the term “professional services” is defined as requiring an exercise of judgment or training. Here, the court said, Kelley’s alleged actions, including his alleged threats and intimidation, are unrelated to his education or training and do not require the use or application of special learning or attainment. Thus, the court concluded that the policy here does not provide coverage to Kelley because his alleged actions do not constitute professional services. Consequently, MedPro has no duty to defend or indemnify Kelley, the court held.

Citation: Medical Protective Co. v. Kelley, 2022 WL 4389556 (W.D. Ky. Sept. 22, 2022).