Shelter Insurance Companies v. Dan Hildreth

Citations: 255 F.3d 921; 2001 U.S. App. LEXIS 18302; 2001 WL 717317Docket: 00-4024

Court: Court of Appeals for the Eighth Circuit; June 27, 2001; Federal Appellate Court

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The case 255 F.3d 921 (8th Cir. 2001) involves Shelter Insurance Companies' appeal regarding its obligation to defend Roger Hockenberry under a business insurance policy containing a 'professional services' exclusion. The issue arose from a personal injury lawsuit initiated by Dan and Kathy Hildreth against Hockenberry for alleged negligent treatment that resulted in Dan Hildreth suffering a herniated disc. Shelter sought declaratory relief to clarify its duty to defend Hockenberry, arguing that the professional services exclusion applied.

The district court ruled in favor of Shelter, granting summary judgment and concluding that it was not obligated to defend Hockenberry in light of the exclusion. The court's decision was based on Hockenberry’s practice of naprapathy, a healing profession involving hands-on treatment that includes techniques similar to chiropractic and physical therapy. Hockenberry, who has been practicing for twenty-three years in Arkansas and claims to be the state's only naprapath, conducted a thorough patient evaluation and employed various treatment methods, including manipulation of the neck.

On May 12, 1999, Hockenberry treated Dan Hildreth for back pain, applying heat and massage before forcefully manipulating Hildreth’s head, which Hildreth alleges caused his injury and permanent disability. Kathy Hildreth also claims loss of consortium due to her husband's injuries. The appellate court affirmed the district court's ruling, upholding Shelter's position that it had no duty to defend Hockenberry in the lawsuit.

Hockenberry's insurer, Shelter, filed for a declaratory judgment in federal court, asserting it had no duty to defend Hockenberry in a state court action. Shelter provided two insurance policies during the relevant period: a homeowner's policy, which is not under dispute, and a business insurance policy that covers bodily injury, property damage, and personal liability. The business policy obligates Shelter to pay damages for bodily injury or property damage resulting from incidents related to the insured premises. However, there is a significant exclusion for "professional services or treatment," which states that the policy does not cover bodily injury or property damage arising from such services, including various medical and professional fields. The district court granted summary judgment in favor of Shelter, determining that the exclusion applied and thereby releasing Shelter from the obligation to defend Hockenberry. The Hildreths have appealed this decision.

In reviewing the case, the standard of review for summary judgment is de novo, meaning the appellate court will assess whether there are any genuine issues of material fact and if the moving party is entitled to judgment as a matter of law. The facts must be viewed favorably for the nonmoving party, and summary judgment is only appropriate if no reasonable jury could find for that party. In this diversity case, Arkansas state law governs the interpretation of the insurance policy. The court must ascertain the plain meaning of the policy terms, which should be clearly articulated. Exclusions within the policy are interpreted against the insurer and in favor of the insured. Any ambiguity in the policy must also be construed in favor of the insured, requiring that an ambiguous term must have more than one reasonable interpretation.

Hockenberry's services to Dan Hildreth are deemed professional services under the insurance policy exclusion, relieving Shelter of its duty to defend him. The exclusionary endorsement is clear, and the term "professional services" does not require an unreasonable interpretation of the policy language. Courts have defined "professional acts" as those requiring specialized knowledge, predominantly intellectual rather than physical. Hockenberry, a licensed naprapath with a relevant degree, employs intellectual decision-making in his patient evaluations and treatments, qualifying his services as professional.

Naprapathy shares similarities with other explicitly excluded professions in the Shelter policy, such as massage and physiotherapy, which further supports the exclusion's applicability. Patients perceive Hockenberry's services as professional, evidenced by their pre-scheduled appointments to address health issues. The court is reluctant to interpret the business insurance policy as one covering malpractice, noting that Hockenberry did not obtain malpractice insurance despite the nature of his services aligning with those requiring such coverage.

Ultimately, the court concludes that Hockenberry's conduct falls within the policy's "professional services" exclusion, affirming the district court's judgment that Shelter is not obligated to defend him in the ongoing personal injury lawsuit.