The Sixth Circuit Court of Appeals issued a significant ruling on September 9, 2026, affirming that Seven Counties Services, Inc. is not entitled to indemnification from its insurers for a wrongful death claim involving a child. The case stems from the tragic death of seven-year-old J.T., who died after being physically restrained by care workers at a behavioral health facility. This decision affects not only Seven Counties but also raises important questions about liability insurance coverage for mental health service providers.
In this case, J.T. was a resident at a behavioral care center operated by Seven Counties Services in Kentucky. On July 17, 2022, after a series of behavioral incidents, J.T. was restrained using a technique known as a “kneeling cradle” hold. Unfortunately, during the restraint, J.T. choked and died. His estate subsequently filed a wrongful death lawsuit against Seven Counties and its management company, Uspiritus, leading to a dispute over insurance coverage.
The core issue arose when Seven Counties sought defense and indemnity from its insurers, Scottsdale Insurance Company and the Mental Health Risk Retention Group (MHRRG). Both insurers denied coverage, prompting Seven Counties to file a lawsuit seeking a declaration of rights under the insurance policies. The district court ruled that while the insurers had a duty to defend Seven Counties in the wrongful death action, they had no obligation to indemnify the company due to a professional services exclusion in the insurance contract.
Seven Counties appealed the indemnification decision, arguing that the restraint used on J.T. did not qualify as a professional service and that the insurers had a duty to indemnify them. The case was heard by a panel of judges, including Stephanie Dawkins Davis, Andre B. Mathis, and Kevin G. Ritz, who ultimately upheld the lower court's ruling.
The court ruled that the act of restraining J.T. fell under the professional services exclusion in the insurance policy. Judge Ritz stated, "The restraint used on J.T. demanded specialized knowledge and training to be performed safely on a child." The court emphasized that the care workers had received training in emergency procedures and physical restraint techniques, which required an exercise of judgment and specialized knowledge.
In its analysis, the court considered several factors to determine whether the restraint constituted a professional service. The first factor was whether the action could be performed by a layperson or required specialized training. The court found that the care workers had undergone extensive training on physical restraints, indicating that the act required specialized knowledge.
The second factor involved whether the task required an exercise of judgment or was merely a routine task. The court noted that the restraint was performed in response to a behavioral crisis, requiring the workers to assess the situation and make decisions based on their training.
The third factor examined whether the act was subject to regulation. The court pointed out that the use of emergency services interventions (ESI) in Kentucky is heavily regulated, further supporting the conclusion that the restraint was a professional service.
As a result, the court concluded that the care workers were engaged in a professional service when they restrained J.T., thereby affirming the district court's ruling that the insurers had no duty to indemnify Seven Counties for the wrongful death claim.
This ruling has significant implications for mental health service providers and their liability insurance coverage. It clarifies that acts performed by care workers, even if they are not licensed professionals, can still be considered professional services under insurance contracts if they require specialized training and judgment. This decision could influence how insurance companies assess coverage for similar cases in the future.
Looking ahead, Seven Counties may consider further legal options, including seeking a rehearing or potentially appealing to the U.S. Supreme Court. However, details on any future actions were not available in the court filing. The outcome of this case serves as a reminder of the complexities surrounding liability and insurance coverage in the mental health field.