Horizon West, Inc. v. St. Paul Fire & Marine Insurance

MEMORANDUM *

Relators Foundation Aiding the Elderly and Marsha Baker filed a False Claims Act (“FCA”) qui tam action in a separate suit against a group of nursing home operators (collectively “Horizon West”). The suit alleged that Horizon West had submitted false Medicare and Medicaid claims, and had misrepresented the quality of care at its facilities to maintain eligibility for payment under Medicare and Medicaid.

At the time the FCA action was filed, Horizon West had a professional liability *753 policy with St. Paul Fire and Marine Insurance Company (“St.Paul”) containing an indemnification clause requiring St. Paul to compensate others for, inter alia, “injury or death resulting from ... the providing or failure to provide professional services.” The policy also required that St. Paul defend Horizon West from suits alleging any such “covered claims, even if the suit is groundless or fraudulent.” Horizon West tendered a defense request to St. Paul, and St. Paul refused on the basis that the policy did not apply to the claims raised in the FCA suit. Horizon West brought a breach of contract action against St. Paul, and the district court dismissed the claim concluding that…