HCA, Inc. v. American Protection Insurance Co.
HCA, Inc., a healthcare facility operator, appealed a trial court's summary judgment in favor of its insurers, American Protection Insurance Company and others. The dispute stemmed from HCA's claim for linen stock losses, valued between eight and twelve million dollars, which HCA attributed to mismanagement and malfeasance by FDR Services Corporation, its linen management contractor. The insurers denied coverage based on an "inventory exclusion" clause in their "all-risk" policies, arguing the loss was only disclosed upon taking inventory. The appellate court reversed the summary judgment, ruling that HCA had presented sufficient independent evidence of loss, beyond mere inventory computations, to warrant a trial on the merits, and remanded the case for further proceedings.