United States District Court, S.D. Texas, Houston Division
MEMORANDUM OPINION AND ORDER
H. Miller United States District Judge.
before the court are a motion for summary judgment (Dkt. 14)
filed by plaintiff Colony Insurance Company
(“Colony”) and a cross-motion for summary
judgment (Dkt. 22) filed by intervenor Texas Mutual Insurance
Company (“Texas Mutual”). Having considered the
motions, responses, replies, record evidence, and applicable
law, the court is of the opinion that Texas Mutual's
motion should be GRANTED and Colony's motion should be
Factual and Procedural Background
case involves Colony's alleged duty to defend an
underlying lawsuit. Dkt. 1. In that suit, Vance and Karen
Anderson sued defendant Hearts with Hope Foundation
(“Hearts with Hope”) as guardians and next
friends of their child, VA. Dkt. 14-1 at 2. The Andersons
allege that Karen Anderson worked for Hearts with Hope, an
organization that provides care for children with mental and
emotional disturbances. Id. at 3. On January 18,
2015, Hearts with Hope assigned Anderson-pregnant at that
time-to dispense medication to children in its care.
Id. at 4. While in the medicine room, a child hit
her in the stomach, “causing her amniotic sac to
rupture and causing injury to VA.” Id. The
Andersons allege that “[a]s a result of these injuries,
” VA was born prematurely and suffered severe physical
and emotional injuries. Id.
with Hope tendered the Andersons' claim to Colony and
Texas Mutual. Dkt. 17 at 5; Dkt. 16 at 5. Texas Mutual is
currently defending the underlying lawsuit, but Colony denied
coverage. Dkt. 16 at 5. Both Colony and Texas Mutual issued
an insurance policy to Hearts with Hope. Dkt. 14 at 7; Dkt.
16 at 5. Colony's policy included commercial general
liability (“CGL”) and professional liability
(“PL”) coverage. Dkt. 14-2 at 25, 29.
instant suit, Colony seeks a declaratory judgment that it
does not owe a duty to defend or indemnify Hearts with Hope.
Dkt. 1. Texas Mutual intervened as a defendant and
counter-plaintiff, asserting that Colony has such a duty.
Dkt. 10; Dkt. 19. Colony filed its motion for summary
judgment, asking the court to declare that its policy does
not cover the underlying lawsuit. Dkt. 14. Texas Mutual filed
a cross-motion for summary judgment, asking the court to
declare that Colony must share in Hearts with Hope's
defense. Dkt. 22.
general provisions of Colony's policy provide that Colony
“will have the right and duty to defend the insured
against any ‘suit' seeking ‘damages' to
which this insurance applies.” Dkt. 14-2 at 11.
However, the policy excludes any claim “[b]rought by
any insured against any other insured.” Id. at
the policy's CGL coverage, Colony must pay
“‘damages' because of ‘bodily
injury' . . . to which this insurance applies.”
Id. at 29. The policy does not apply to a claim:
Based upon or arising out of “bodily injury” to:
(1) an “employee” of the insured arising out of
and in the course of:
(a) employment by the insured; or
(b) performing the duties related to the conduct of the
insured's business; or
(2) the spouse, child, parent, brother or sister of that
“employee” as a consequence of Paragraph (1)
Id. at 32.
the policy's PL coverage, Colony must pay
“‘damages' because of a ‘wrongful
act' to which this insurance applies.” Id.
at 25. “Wrongful act” is defined as:
an act, error or omission in the rendering of or failure to
render “professional services” by any insured
covered under this Policy and performing the operations
described under BUSINESS DESCRIPTION in the Declarations
including an act, error or omission resulting in the
violation of any right guaranteed to your resident under
state or federal law or guidelines regulating your business
as a resident health facility.
Id. at 24. “Professional services” means
a. medical, surgical, dental, x-ray, mental health or nursing
service or treatment, or the furnishing of food or beverage
in connection with such service or treatment;
b. medications, medical supplies or medical appliances;
c. health or therapeutic service, treatment ...