11th Circuit rules in favor of Hiscox in unfair business practices


A Hiscox Ltd. unit does not have a duty to defend a medical practice that provided “regenerative” medical products and services which was sued by Georgia for unfair business acts, a federal appeals court ruled Tuesday, in affirming a lower court ruling.  

Sandy Springs, Georgia-based Elite Integrated Medical LLC formerly operated a medical practice that provided regenerative medical product and services to patients suffering from pain in the joints and extremities, according to Tuesday’s ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Elite Integrated Medical, LLC, Justin C. Paulk vs. Hiscox, Inc., Certain Underwriters at Lloyd’s et. al. 

In September 2020, the Georgia attorney general filed a civil action against Elite and its owner, Mr. Paulk, asserting violations of Georgia’s Fair Business Practices Act. The state contended that the plaintiffs falsely claimed its products could treat, cure or mitigate diseases and health conditions, among other charges. 

After its insurer, Hiscox, refused to defend the plaintiffs under its professional liability insurance policy they filed suit against the insurer in U.S. District Court in Atlanta, which granted Hiscox’s motion to dismiss the case. 

The ruling was affirmed by a three-judge appeals court panel. “The unambiguous language in the Policy makes clear that the State’s claims fall outside the scope of the Policy’s coverage. First, none of the State’s claims involve ‘Covered Professional services,’ as defined by the Policy,” the ruling said.  

“Plaintiffs contend that Hiscox owes them a duty to defend because the ‘true facts’ show that any potential violation of the Fair Business Practices Act was unintentional. That Plaintiffs deny the State’s allegations of wrongdoing, however, does not alter the nature of the State’s claims against Plaintiffs or bring those claims within the Policy’s coverage,” the ruling said.   

“We also reject the Plaintiffs’ argument that Elite’s live seminars constituted ‘instruction’ within the meaning of ‘Covered Professional Services,’” the panel said, in affirming the lower court’s ruling. 

Attorneys in the case could not be reached for comment. 

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