Pennsylvania Appellate Court Affirms No Insurance Coverage Under Employment Practices Insurance For Patient Claims Involving Therapist

The Superior Court of Pennsylvania (“Pennsylvania Appellate Court”) stated in its Opinion filed on June 17, 2021: “This is an appeal from an order dismissing an insurance coverage action brought by Penn Psychiatric Center, Inc. (Insured) against United States Liability Insurance Company (Insurer) on preliminary objections. Insured claimed that it was entitled to coverage under an employment practices insurance policy for an action brought against Insured and one of its therapists by Amanda Madonna and Adrienne Martorana, two former patients who had no employment relationship with Insured (the Underlying Action) … Insured argues that the claims in the Underlying Action for negligent hiring and negligent supervision fall within the Policy’s definition of “Workplace Tort” and are therefore “Wrongful Acts” for which the Policy provides coverage. The trial court correctly rejected this argument because the Policy’s definitions of both “Workplace Tort” and “Wrongful Act” unambiguously limit coverage to claims arising out of an employment or prospective employment relationship.”

The Underlying Action

Plaintiffs Madonna and Martorana filed the Underlying Action in November 2018. The complaint in the Underlying Action alleges that the therapist, under the guise of providing therapy for past sexual abuse, groped and sexually assaulted plaintiff Madonna and sent her sexually charged messages, and that after she complained about his conduct, the therapist threatened her and gave information protected by the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) to his girlfriend, who then harassed and threatened her. Plaintiff Madonna’s negligence per se count includes a claim that the therapist’s sharing of her patient information with his girlfriend violated HIPAA and that Insured is vicariously liable for his HIPAA violation.

The complaint also alleges that the same therapist, under the guise of providing therapy for past sexual abuse, groped plaintiff Martorana and sexually propositioned her. The complaint in the Underlying Action asserts claims of negligent hiring, negligent supervision, negligent undertaking to render services, violations of the Unfair Trade Practices and Consumer Protection Law, and negligent misrepresentation against Insured, alleging that Insured’s conduct caused the plaintiffs to be treated by and assaulted by the therapist. It also asserts claims of negligence per se, professional negligence, and negligent infliction of emotional distress against the therapist and against Insured on the ground that Insured is vicariously liable for the therapist’s acts.

Pennsylvania Appellate Court Opinion

The Pennsylvania Appellate Court stated that contrary to Insured’s contentions, the negligent hiring and negligent supervision claims in the Underlying Action do not fall within the Policy’s definition of “Workplace Tort.” The Policy does not include negligent hiring in the definition of “Workplace Tort” or “Wrongful Act” at all. Policy, Coverage A §§ III(U), (V), Coverage Form at 3-4. The Policy does include negligent supervision in its definition of “Workplace Tort.” Policy, Coverage A § III(U) (2), Coverage Form at 3. The definition of “Workplace Tort,” however, expressly restricts coverage to “employment-related” claims. Coverage Form at 3 (“‘Workplace Tort’ means any actual or alleged
employment-related: … (2) negligent supervision, training or evaluation …”).

Furthermore, the Policy’s definition of “Wrongful Act” expressly limits coverage of “Workplace Tort” claims, and all other claims except for “Third Party Discrimination,” to claims for acts “committed or allegedly committed by the Organization or by an Individual Insured acting solely within his/her capacity as such involving and brought by any Employee, former Employee, or applicant for employment with the Organization.” Policy, Coverage A § III (V), Coverage Form at 4. The claims in the Underlying Action are not claims brought by an employee, former employee, or job applicant.

The Pennsylvania Appellate Court stated, “Our conclusion that the Policy does not cover negligent supervision and other “Workplace Tort” claims brought by plaintiffs with no present, past, or prospective employment relationship with Insured is also supported by case law throughout the country interpreting employment liability insurance policies.”

The Pennsylvania Appellate Court held: “Because the trial court correctly held that none of the claims in the Underlying Action are “Wrongful Acts” covered by the Policy, we affirm its order sustaining Insurer’s demurrer.”

Source Penn Psychiatric Center, Inc. v. United States Liability Insurance Company, 2021 PA Super 125.

If you or a loved one were harmed as a result of bad or negligent therapist care in Pennsylvania or in another U.S. state, you should find a Pennsylvania medical malpractice lawyer or a medical malpractice lawyer in your U.S. state who may investigate your therapist health care claim for you and represent you or your loved one in a therapist malpractice case, if appropriate.

Click on the “Contact Us Now” tab to the right, visit our website, or call us toll-free in the United States at 800-295-3959 to be connected with therapist claim lawyers in your state who may help you.

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This entry was posted on Friday, July 2nd, 2021 at 5:26 am. Both comments and pings are currently closed.


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