Oregon Youth Authority v. Haag Home for Boys, Inc.

The existence of such a duty is generally determined by comparing the allegations of the complaint with the terms of the insurance policy known as the “four-corners” or “eight-corners” rule.

Oregon Youth Authority sued Haag and its insurer after a resident died from fentanyl toxicity allegedly caused by staff negligence. American Family denied coverage under Haag’s liability policy, invoking a “professional services” exclusion. The Court applied Oregon’s “four-corners” or “eight-corners” rule, which compares the allegations in the complaint to the terms of the insurance policy to determine the insurer’s duty to defend. If any claim in the complaint could be covered, the insurer must defend. The Court examined whether Haag’s failure to supervise and recognize the resident’s medical distress constituted “professional services.” The Court found that the policy defined this term to include “assisted care living,” which was unambiguous. The Court held that Haag's conduct involved specialized duties defined as acts requiring specialized knowledge or skill. The Court of Appeals affirmed, agreeing that the exclusion applied but remanded for a formal declaratory judgment clarifying the parties’ rights under the policy.