Sexual Misconduct by Psychiatrist May Constitute Negligence

By Don R. Sampen, published, Chicago Daily Law Bulletin
[December 21, 2017]

The U.S District Court for the Northern District of Illinois recently held that improper sexual activity by a psychiatrist with a patient can constitute medical negligence, such as to give rise to a duty to defend by the psychiatrist’s professional liability insurer.

The insurer in Professional Solution Insurance Co. v. Giolas, 2017 U.S. Dist. Lexis 184995 (Nov. 8, 2017), was represented by McKenna Storer Rowe White & Farrug. Richard Grossman represented the psychiatrist, Dale Giolas.

Giolas treated Staci Ferguson as a patient from 2011 until early 2016, for attention deficit disorder, depression, anxiety and other ailments. In 2016, she brought suit against him alleging that he repeatedly engaged in improper sexual activity with her during the course of treatment.

She contended that he repeatedly touched and invaded her sexually and that the conditions under which he did so were coercive because he was treating and medicating her at the time.

Professional Solution issued a professional liability policy to Giolas that was in effect at the time she made her claim. The policy provided coverage for injuries arising due to negligence in the performance of professional services.

The policy contained a sexual conduct exclusion, which was subject to an exception requiring Professional Solution to provide coverage unless a judgment against the insured established that the behavior occurred. Professional Solution appears not to have relied on the exclusion in connection with its coverage position before the court.

Giolas tendered defense of the case to Professional Solution, which brought this declaratory action seeking a determination that it had no duty to defend.

The parties filed cross-motions for summary judgment, with both sides acknowledging that Giolas denied engaging in the alleged conduct.

Analysis

In an opinion by U.S. District Judge Harry D. Leinenweber, the court found in favor of a duty to defend. He noted that, while the Professional Solution policy provided coverage for negligence, Professional Solution’s main argument was that the underlying complaint did not allege negligence in the performance of professional services.

Giolas initially contended that certain underlying allegations did assert negligence in connection with the keeping of medical records and the mixture of drugs he prescribed. Leinenweber rejected that argument, however, on the ground that Ferguson did not seek to recover for Giolas’ record-keeping or drug prescriptions.

These allegations, therefore, did not give rise to a duty to defend because they were not attached to any particular theory of recovery.

Leinenweber then turned to what he described as the crux of the coverage dispute: Whether improper sexual activity with a patient could constitute medical negligence in the field of psychiatry.

Generally, he noted, improper sexual activity between a medical doctor and patient did not constitute “professional services” at all. However, Corgan v. Muehling, 143 Ill.2d 296 (1991), recognized a distinction between medical doctors and psychiatrists.

The distinction had to do with the phenomenon of “transference” by which the patient transfers feelings toward other people to the psychiatrist, who then must act with a proper response, in the form of a “counter-transference,” to assist the patient in overcoming problems. Under Corgan, the mishandling of this phenomenon, if it results in sexual relations, has been considered as malpractice or gross negligence.

Thus, according to Leinenweber, the sexual relationship between the psychiatrist and patient cannot be viewed separately from other aspects of the doctor’s malpractice or the therapeutic relationship between the therapist and patient. For that reason, the sexual misconduct alleged in the underlying complaint potentially fell with the policy’s coverage.

Professional Solution also argued that the policy did not provide coverage because it did not allege an “injury” defined by the policy as bodily injury, sickness, disease or death.

Leinenweber agreed that claims of emotional distress did not constitute “bodily injury” under Illinois law. However, he said, the underlying complaint did not solely allege emotional distress, but also asserted that Giolas’ sexual conduct constituted a common-law battery, and the complaint sought damages of $750,000, separate from the claims of emotional distress.

The very nature of a sexual violation, moreover, required bodily contact that is injurious, even if it is not as apparent as a wound or laceration. Given that various forms of sexual contact were alleged in the complaint, the allegations sufficed to allege bodily injury.

Finally, Leinenweber made note of Giolas’ argument that Professional Solution, based on the claims of punitive damages and the possible applicability of the exception to the sexual misconduct exclusion, had a conflict of interest. To that argument Professional Solution made no response. Because of the conflict, the court found that Giolas was entitled to the appointment of independent counsel.

Accordingly, the court granted Giolas’ motion for summary judgment and denied that of Professional Solution.

Key points

Allegations in an underlying complaint that are not connected to a theory of recovery do not give rise to a duty to defend.

According to this court, sexual misconduct by a psychiatrist may constitute professional negligence, although such conduct by other medical doctors does not constitute professional services of any kind.