                                                             United States Court of Appeals
                                                                      Fifth Circuit
                                                                   F I L E D
                IN THE UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT                      October 11, 2005

                                                               Charles R. Fulbruge III
                                                                       Clerk
                               No. 05-20050
                             Summary Calendar


LEXINGTON INS. CO.,

                                         Plaintiff - Counter-Defendant -
                                             Appellee - Cross-Appellant,

versus

EDUCARE COMMUNITY LIVING CORP.-GULF COAST, ET AL,

                                                               Defendants,

EDUCARE COMMUNITY LIVING CORP.–GULF COAST,

                                         Defendant - Counter-Claimant -
                                            Appellant - Cross-Appellee.

            Appeal from the United States District Court
                 for the Southern District of Texas
                         USDC No. H-02-2822


Before HIGGINBOTHAM, BENAVIDES, and DENNIS, Circuit Judges.


PER CURIAM:*

     Defendant, Educare Community Living Corporation–Gulf Coast

(“Educare”) appeals the summary judgment in favor of Plaintiff,

Lexington Insurance Company (“Lexington”), the judgment declaring

that Lexington has no duty to indemnify Educare for the remaining

$1,500,000 that Educare paid in partial fulfillment of a settlement


      *
         Pursuant to the 5TH CIR. R. 47.5, the court has determined that this
opinion should not be published and is not precedent except under limited
circumstances set forth in 5TH CIR. R. 47.5.4.

                                     1
agreement.    Lexington cross-appeals the denial of attorney’s fees.



     Educare was sued as a result of one of its employee’s alleged

sexual assault of a resident in an Educare group home.                              Educare

Employees DeLaCerda and Elvenia Hackett were implicated in claims

for negligent hiring and negligent supervision and training.                               The

parties settled the underlying lawsuit, Lexington contributing

$1,000,000    to    the   settlement         in       accordance     with    the    primary

policy’s maximum commercial general liability coverage.                            However,

the primary policy contained two coverage parts: commercial general

liability    (“CGL”)      and    medical      professional          liability      (“MPL”).

Pursuant to the MPL coverage of the primary policy and to a non-

waiver,   reservation       of    rights      agreement        entered      into    between

Educare and Lexington prior to the settlement, Educare seeks

indemnification for the amount it paid in satisfaction of the

settlement agreement.           The crucial question on appeal, therefore,

is whether the negligent supervision claim in the underlying

lawsuit falls within the MPL coverage included in the primary

policy, requiring Lexington to indemnify Educare for the additional

$1,500,000    that     Educare        paid       in    settlement.          Additionally,

Lexington appeals the denial of attorney’s fees.

                                             I.

     Summary       judgment      is   appropriate         if   no    genuine       issue   of

material fact exists and the moving party is entitled to judgment



                                             2
as a matter of law.1         Under FED.R.CIV.P. 56(c), the moving party

bears the initial burden of           “informing the district court of the

basis for its motion, and identifying those portions of [the

record] which it believes demonstrate the absence of a genuine

issue of material fact.”2           When the moving party has met its Rule

56(c) burden, the nonmovant cannot survive a motion for summary

judgment by resting on the mere allegations of its pleadings.3

“The mere existence of a scintilla of evidence in support of the

plaintiff’s position will be insufficient; there must be evidence

on which the jury could reasonably find for the plaintiff.”4                   In

deciding a summary judgment motion, the court reviews the facts

drawing all reasonable inferences in the light most favorable to

the nonmovant.5      This court reviews a grant of summary judgment de

novo, applying the same standard as the district court.6

      Texas     rules   of   contract    interpretation      control    in   this

diversity     case    concerning     disputed    language    in   an   insurance

policy.7     In a coverage dispute, the primary concern of the court

      1
          See Fed. R. Civ. P. 56.
      2
          Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
      3
          See Prejean v. Foster, 227 F.3d 504, 508 (5th Cir. 2000).
      4
          Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 253 (1986).
      5
        Id. at 255; Cabillo v. Cavender oldsmobile, Inc., 288 F.3d 721, 725 (5th
Cir. 2002).
      6
          Boudreaux v. Swift Transp. Co., Inc., 402 F.3d 536, 540 (5th Cir. 2005).


      7
          Am. Nat’l Gen. Ins. Co. v. Ryan, 274 F.3d 319, 323 (5th Cir 2001).

                                         3
is to give effect to the intentions of the parties as expressed by

the policy language.8      The court gives the terms used in the policy

their plain, ordinary meaning unless the policy itself shows that

the parties intended the terms to have a different, technical

meaning.9     The court must “consider the policy as a whole and

interpret it to fulfill [the] reasonable expectations of the

parties in light of customs and uses of the industry.”10                     When

considered as a whole, a contract is ambiguous only if “it is

reasonably susceptible to more than one meaning.”11               Although a

court will construe ambiguities in an insurance contract against

the insurer and in favor of coverage, “not every difference in the

interpretation of a contract or an insurance policy amounts to an

ambiguity.”12

A.

     The language of the insurance policy is clear.                    The MPL

covered amounts that Educare become legally obligated to pay as

“damages     resulting    from    a   medical   incident     arising   out    of

professional services.”          The MPL defined a “medical incident” as

“any act, error or omission in the providing of or failure to

     8
          Ideal Lease Serv., Inc. v. Amoco Prod. Co., 662 S.W.2d 951, 953 (Tex.
1983).
     9
          Puckett v. U.S. Fire Ins. CO., 678 S.W.2d 936 (Tex. 1984).
     10
         N. Am. Shipbuilding, Inc. v. S. Marine & Aviation Underwriting, Inc.,
930 S.W.2d 829, 834 (Tex. Ct. App. 1996).
     11
          Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).
     12
          Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex. 1994).

                                        4
provide professional services.”13           The MPL defined “professional

services” as follows:

           1.   Medical, surgical, dental, nursing or other
           health care services including but not limited to
           the furnishing of food or beverages in connection
           with such services; the practice of nuclear
           medicine; the furnishing or dispensing of drugs or
           medical, dental or surgical supplies or appliances;
           or the handling or treatment of deceased human
           bodies, including autopsies, organ donation or
           other procedures;

           2. Services by any person as a member of a formal
           accreditation,   standards   review   or   similar
           professional board or committee of any Insured; or

           3.   Supervising, teaching, proctoring others at
           your request.

      On appeal, Educare argues that the negligent training

and supervision of its employee qualifies as falling within

the “supervising, teaching, and proctoring” prong of the

professional services definition, resulting in coverage

under the MPL.       This assertion, however, wholly removes the

phrase from the list in which it is enumerated and from the

context     which    that   list   provides–-namely,   professional

healthcare.         The very title of the coverage, “Medical

Professional Liability,” suggests that coverage depends on

providing professional medical care.          All of the examples

of services enumerated in part 1 of the definition require



      13
          Additionally, the MPL provisions excluded coverage “for any actual,
alleged, attempted, or proposed erotic physical contact, or any sexual abuse or
harassment” and contained a “separation of insureds” clause. The primary policy
limited insurance to $1,000,000 per “each medical incident.”

                                        5
some specialized education or experience.                    Furthermore,

part 2 requires some special accreditation.                  Though urging

a broad interpretation of the language “other health care

services” found in part 1, Educare does not argue that the

relevant employees are covered by parts 1 or 2 of the

definition.      If    we   were    to    accept    Educare’s     view   of

coverage under part 3, all of Educare’s employees, simply

by virtue of being trained or supervised in a group home

environment, would qualify for coverage under the MPL part

of the policy, irrespective of the employee’s level of

participation in providing healthcare.                     This cannot be

true.

      Interpreting the policy as a whole, it is clear that

the   MPL   excludes    the   training        and   supervision     of   an

employee not possessing the type of skills set forth in

parts 1 or 2 of the definition.               After all, this is the

purpose of MPL coverage, to supplement non-professional CGL

coverage.14      Therefore,        when    read       in     context,    the

supervision and teaching must be for healthcare services--

professional     in    nature–-demanding            either     specialized

knowledge, such as that required to perform the enumerated

tasks in part 1, or recognized training, such as that


      14
          Cochran v. B.J. Services Co. USA, 302 F.3d 499, 502 (5th Cir. 2002)
(stating “[i]nsured professionals, such as engineers...ordinarily carry special
insurance separate from the CGL policy to cover obligations arising from the
rendering of professional services”).

                                          6
required by part 2.         In affirmation, this court previously

has   interpreted       a   coverage   exclusion          for    supervisory

activities    contained      within    a       detailed    definition        for

professional services to require specialized training.15

      Moreover, when not expressly defined in such a way

that purports to vary the customary usage of the term, the

accepted meaning of professional services, according to

both Fifth Circuit and Texas state law, conforms to this

interpretation of the professional services definition in

the present case.           This Court has defined professional

healthcare services as not “a purely physical action in

response    to    a    business   determination,          but    rather      the

exercise     of    a   trained    judgment        in   obedience        to    an

established       medical   policy.”16          Likewise,       Texas   courts

define “professional services” as requiring specialized

education and knowledge.17         These customary definitions do

      15
         Id. In an appeal from the Western District of Louisiana, a supervisory
exclusion within the definition of professional services was deemed not to
preclude coverage where an insured was injured merely by removing a cement head
from an oil rig because the nature of the work did not constitute a professional
service, which would require “special insurance.” The policy defined
professional services as: “1. The preparing, approving, or failure to prepare or
approve maps, shop drawings, opinions, reports, surveys, field orders, change
orders or drawings and specifications; and 2. Supervisory, inspection,
architectural, or engineering activities.” Id.
      16
         Big Town Nursing Homes v. Reserve Ins. Co., 492 F.2d 523, 525 (5th Cir.
1974); Guaranty Nat’l Ins. Co. v. North River Ins. Co., 909 F.2d 133, 137 (5th
Cir. 1990) (applying same definition).
      17
          Duncanville Diagnostic Ctr. v. Atlantic Lloyd’s Ins. Co., 875 S.W.2d
788, 790-91 (Tex.App.-Eastland 1994), reh’g denied (Though holding that a
professional services exclusion from coverage in a CGL policy was inapplicable
to a radiological technician who administered a lethal dose of a chemical to a

                                           7
not singularly inform but, rather, stand to buttress the

conclusion that the parties contracted for coverage related

to professional medical treatment.

B.

      The record demonstrates that the training of and

supervision     by    the    Educare    employees     named   in    the

underlying lawsuit did not involve professional services as

defined by the instrument, thereby precluding coverage

under the MPL part of the insurance policy.18                 Neither

DeLaCerda    nor     his   supervisor   Elvenia     Hackett   had   any

specialized medical education or experience. DeLaCerda was

hired as a night-time “program technician,” a position that

required a high school diploma or equivalent, a valid

driver’s license with an acceptable driving record, and a

demonstration of competency on the one-week new employee

orientation that included a thirty-minute introduction to

mental retardation.         No state license was required.          The

program administrator for Educare described the night-shift

program technician’s duties as typically not involving


patient, Duncanville limited “professional services” to those applying
specialized education and knowledge, as well as predominantly intellectual rather
than physical skills.).
      18
          The Duncanville lawsuit included claims of negligence, as well as the
failure to adequately hire, train, and supervise the medical center's employees
and the failure to institute adequate policies and procedures at the center. See
Duncanville Diagnostic Ctr., 875 S.W.2d at 788.       The court determined that
without the rendering of negligent medical services, the other negligence claims
could not follow. Id.

                                        8
resident contact, except in the case of emergency.19                The

job required cleaning and home maintenance duties and

visually verifying that the residents were sleeping safely.

Moreover, DeLaCerda was not allowed to perform medical

tasks or even hand a pill to a resident; therefore, he was

not even remotely involved in administering any type of

professional medical care.        The evidence on record does not

create a question of fact; DeLaCerda’s employment duties

with Edurcare did not qualify as “professional services” as

defined in the insurance policy.

      The    claims    against     Educare    in    the      underlying

litigation    also    alleged    the   negligent    supervision    and

training     of   DeLaCerda’s     supervisor       Elvenia     Hackett.

Hackett, a residential director, obtained a G.E.D. and had

attended both a business program and a cosmetology school

prior to her employment with Educare.            In addition to the

same one-week orientation that DeLaCerda attended, she also

received one week of on-the-job training, which included

sitting in on interviews and familiarization with the




      19
           Duncanville Diagnostic Ctr., 875 S.W.2d at 790-91 (Though actual
diagnosis of medical conditions certainly rises to the level of professional
service, “to the extent the acts involved in this case did not require the
exercise of professional medical judgment, the acts were nonetheless an intricate
part of the professional medical services provided by the Center.”); Employers
Reins. Corp. v. Newcap Ins. Co., 209 F.Supp.2d 1184, 1197-98 (D.Kan. 2002)
(distinguishing Duncanville, stating that security guards who enforced hospital
policy by calling a dispatcher upon recognizing a health emergency were not
intimately involved in providing health care services).

                                        9
paperwork involved in the administration of a group home.20

Hackett was responsible for the grocery and household

supply shopping, for staffing, and for interacting with the

residents’ guardians.         She was not, however, allowed to

perform any medical tasks, such as distributing medication

to a resident.           Thus, Hackett was not responsible for

providing professional services.

      The record before this Court, viewed in light most

favorable to Educare, does not raise a genuine issue of

material facts regarding DeLaCerda and Hackett’s provision

of professional services as required by the MPL part of the

insurance policy.         We agree with the district court that

Educare     is    not    entitled    to    indemnification        for   the

additional       $1,500,000   it    paid    in   satisfaction      of   the

settlement agreement.21



                                    II.

      Lexington     also    cross-appeals        the   district    court’s

rejection    of    its   claim     for    attorney’s    fees   under    its

written agreement with Educare.


      20
          See Big Town Nursing Homes, 492 F.2d, 525 (recognizing a distinction
between medical and administrative activities for the purposes of distinguishing
between professional and non-professional services but concluding that the facts
of the case did not support a finding that a nurse’s restraining of a patient
constituted administrative activity).
      21
         Consequently, we do not reach other arguments against coverage raised
by Lexington.

                                           10
     Again, this court reviews a grant of summary judgment

de novo, applying the same standard as the district court.22

Of   course,    state     law   governs          construction       of     the

agreement.23    For diversity cases, attorney's fees awards

are also governed by state law.24

     Lexington      and   Educare      entered      into     an    agreement

preserving rights and possibly for reimbursement.                          Two

separate    paragraphs      provided       for    recovery    of    fees    in

litigation     in   the     event     of    any     overpayment      during

settlement. Paragraph five provided that any party funding

more than its share of the settlement would be reimbursed

with interest and reasonable attorney’s fees.                      Paragraph

nine provided        that    “[t]he     successful      party      shall    be

entitled to recover its reasonable and necessary attorney’s

fees incurred in connection with this coverage dispute

between the Parties incurred from the effective date of

this agreement through final resolution.”                    The agreement

did not define the term “successful party.”

     Again, extricating a single clause from the whole

instrument, Lexington now argues that it is the successful



     22
          Boudreaux, 402 F.3d at 540.
     23
          See Lockette v. Greyhound Lines, Inc., 817 F.2d 1182, 1185 (5th Cir.
1987).
     24
         Texas Commerce Bank Nat’l Ass’n v. Capital Bancshares, Inc., 907 F.2d
1571, 1575 (5th Cir. 1990).

                                           11
party under paragraph nine and is, therefore, entitled to

attorney’s fees.   However, the instrument, as read in its

entirety, requires that the successful party prevail in an

action for reimbursement of funds paid in excess of its

share.   Paragraph nine states that “[t]he successful party

shall...recover...attorney’s fees incurred in connection

with this coverage dispute”–-not in connection with any

coverage dispute (emphasis added).        Lexington did not

overpay in the present case and is not entitled to any

reimbursement   pursuant   to   the   non-waiver   agreement.

Therefore, as the district court concluded, attorney’s fees

cannot be sustained by the non-waiver agreement.

     AFFIRMED




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