Beruflich Dokumente
Kultur Dokumente
No. 94-2004
Plaintiff, Appellee,
v.
Defendant, Appellant.
____________________
____________________
Before
____________________
and Robert Qu
_________
____________________
COFFIN,
question
This
appeal
has a duty
raises
the
to defend and
indemnify
its
Massachusetts
insured
against
courts under
insurance policies.
The
lawsuits currently
two Comprehensive
in
General Liability
the
pending
Concluding, on
the first of these duties, i.e., the duty to defend the lawsuits,
I. Background
__________
Inc.
(Metropolitan),
and
one
it,
disburses
federal
and
of
its
Partnership,
predecessor
entities,
state
housing
subsidies
to
participating
landlords
Certificates
search
of
and
tenants.1
Participation
to
Metropolitan
eligible tenants,
a suitable unit,
Metropolitan steps in
and landlord
who
then
rent
issues
sign a lease.
rent subsidies,
Metropolitan
never
____________________
MHI
and
Metropolitan
functions
previously
Assistance
Program
were
performed
of
the
by
formed
the
Massachusetts
-2-
to
privatize
Metropolitan
Executive
the
Housing
Office of
becomes
party
to
the
lease,
nor
acquires
any possessory
Before
agreeing
to
subsidize
particular
apartment,
Quality Standards
visits the
checklist
are satisfied.
apartment and,
confirming
sinks, stoves,
A Metropolitan representative
the number
and refrigerators
and
types
completes a
of rooms,
are in working
whether
order, and
so
forth.
lead
paint.
chipped
Instead,
or peeling,
they simply
and whether
note
whether the
the landlord
has a
paint is
Letter of
paint safety.
named
Despite
this rather
as
defendant
limited
or
third
role,
party
Metropolitan has
defendant
in
been
five
paint exposure
These suits
of minors at
Metropolitan-subsidized apartments.
inspect adequately
the apartments.
for lead
failure to
to subsidize
GRE
judgment
filed
this
that it
had
diversity
no
action
obligation
seeking
to
defend
declaratory
or
indemnify
-3-
II. Analysis
________
We
review de
novo the
district court's
interpretation of
________
these insurance contracts, St. Paul Fire and Marine Ins. Co. v.
___________________________________
Warwick Dyeing Corp., 26 F.3d 1195, 1199 (1st Cir. 1994), guided
_____________________
by
construction.2
We
expect to be
covered."
(quoting
849, 616
would
Commercial
__________
N.E.2d 68,
72 (1993)
ambiguity,
give
meaning.
we
policy
E.g., Cody v.
____ ____
N.E.2d 576,
language
its
583 (1990)).
plain
and
Absent
ordinary
Mass.
142, 146,
439 N.E.2d
resolved against
favor
of
the
234, 237
the insurer,
insured.
interpretations of
(1982).
who drafted
Thus,
if
policy language,
Ambiguities are
the
"there
policy, and
are
two
the insured is
burden
of proving
coverage,
that
which, once
claim
rational
entitled to
Mass.
Hazen, 407
_____
falls
established, shifts
within
the
the burden
grant
____________________
of
onto the
Camp Dresser
____________
& McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. 318, 321,
_____________
______________
in
568
-4-
To determine if
defend claims
a liability policy
made against
underlying complaint
obligates a carrier
its insured,
to the policy;
we simply
insurer
compare the
to
of the
interpretation that
Liberty Mut.
Ins. Co. v.
______________________
SCA Services, Inc., 412 Mass. 330, 331-32, 588 N.E.2d 1346, 1347
___________________
(1992)
omitted).
liability
and commercial
Insuring Agreement
of the
property insurance
policies.
In the
part, GRE
promised to:
by an `occurrence.'
. to which
The `occurrence'
territory.'
We will have
must take
the right
There
is no
question that
the terms
`occurrence'
and `bodily
to
lead paint
exposure,
exclusion
and that
the
coverage territory.
effectively defeats
this
occurrences took
place
Thus, unless a
policy
grant of
coverage, GRE
is
Metropolitan.
The district
that
the
policies
are
restricted
-5-
to
of which
coverage: first,
liability
arising
at
Metropolitan's
claims
fall within
services.
A.
home
office;
and second,
policy exclusion
the
underlying
relating to
inspection
office, relying
and
that
two
supplemental schedules,
liability for
and
upon
the
amount of
the
Form"
the types of
coverage
part, the coverage period, the name, address and type of business
of the
insured,
the
the premium,
agree
with
policy."
calls
policy number,
to provide
GRE seizes on
for a
"business
so forth.
and subject to
you
and
all the
the
terms of
insurance
this policy,
as
stated in
description" of
the
reasoning is that
the question
calls for a
also
of
we
this
the form
insured, which
Metropolitan's
It
is
arising from
description of
the
as
-6-
boarding
But it does
somewhat closer
appears in
question is
presented by
language that
Liability Coverage
Declarations
Form"
directs
the
reader
to
named insured."
by the
i.e., the
location of
"Comprehensive
Schedule,"
General
as
Metropolitan's
or
Premises --
"15,000"
office.
covered.
Liability
Further,
Insurance
on the
Supplemental
as "Buildings
listed
Metropolitan's office.
square
GRE
Office,"
feet,
and the
roughly
argues that
"Exposure"
is
the
of
this shows
area
that only
Based
Massachusetts, however,
University v.
__________
we cannot agree.
In Trustees of Tufts
__________________
insurance carrier
of hazards to a
removed
argument,
any coverage
for
holding
simply
unambiguously provide
that risk.
that
that coverage
-7-
The SJC
"nowhere
does
is limited to
rejected
the
that
policy
the specific
76.
In
the instant
case, there
is no
language in
from
which we
probative
the
have
quoted.3
the policy
This absence
on the schedules
is made
even more
property coverage
________
loss of or damage
direct physical
the
heading "Coverages
"applies
Provided,"
states
that
the
insurance
with respect to
those premises, only for the coverages, causes of loss and limits
shown."
By reference
"premises
shown
failure
to
coverage
to
below" is
include
such
part, under
the
premises schedule,
Metropolitan's
office
language anywhere
in
Tufts, is
_____
comprehensive liability
common
fatal to
space.
the
the
The
liability
_________
GRE's claim
that its
____________________
We
operations
reject
hazard"
GRE's
citation
exclusion
as
to
a
the
"products-completed
sufficiently
unambiguous
statement
of such
limitation.
or property
manufacturer.
damage
It excludes
after an insured's
As
GRE recognized
at
oral
after it
leaves
the hands
of
its
that arises
here, from
-8-
only
schedule of hazards.
liability
insurance
Metropolitan's
Metropolitan
Liability"
was
not
office.
purchased
endorsement
First,
arising
(emphasis added).
intended
sold
out
for
the
1990-91
policy.
such
of
We find
coverage only
office at 434
additional
Form
at
premium,
Comprehensive
policy,
which
was
the activities
for
activities at
Massachusetts Avenue in
an
be covered"
office.
of
it quite unlikely
endorsement.
to
an
occurrences
[injuries]
and
for
to
so-called "Broad
the
limited
for liability
[the]
insured"
that parties
Metropolitan's
Certainly,
an
who
home
bought
"objectively
beyond that
arising at
its home
_____
Second,
as
Metropolitan,
telling
GRE
apartments
federal
through
that it
and
of
its
its
application
broker,
hired outside
determine
standards
received this
as
part
so as
made a
satisfied
for
made clear,
general liability."
purported to
-9-
point
to go
of
to the
the relevant
the subsidy.
their titles
insurance,
specific
"inspectors"
whether they
to qualify
for
Having
policies that,
cover "comprehensive
exclusionary language,
it was
Indeed,
as we
find
infra, there
_____
was an
endorsement, the
arising
that
from the
endorsement
"arising
out
of
inspectors' activities.
Among
expressly
coverage
the
professional services
services."
excluded from
rendering
. .
or
. including
failure
. . .
to
other things,
any claims
render
any
inspection .
. .
office
amount
of
the
Metropolitan's
find the
premium
as
evidence
office activities
premium to
be relatively
were covered.
low, we
press
this argument
testimony
charged
no
regarding
seriously, it
the
premium
factual basis
whatsoever
that
more
While
do not
than
we also
believe the
could have
amount
no
here
submitted expert
versus premiums
upon which
to assess
whether the
More
importantly, we can
speculate as to
the
very
low premium.
little
liability exposure
because
it
was essentially
-10-
have been
influenced by a
seen as an
enterprise
exposure may
Gen. L.
ch. 231
to
a $20,000 per
claim cap.
Or, it could
of Metropolitan's operations.
the
circumstances
competent
Thus, without
surrounding
premium
premium will
a fact finding
calculation
based
on
on
is that the
amount of the
the extent of
the
contrary.
Ins. Co., 92
________
v. The Home
________
was
faced
only certain
court's
limited to cover
that it was.
But that
holding was based upon the fact that the policy language
all
at
The
394, 608
GRE's
A.2d at 826
(emphasis added).
As
Id.
___
we have noted,
-11-
that
the Chesapeake
__________
court
went
on
to
discuss
It is
number
true
of
based
on
covered.
the
But,
square
footage of
as this
was
the
in the
properties
context of
was calculated
and premises
a policy
that
terms, it
meaning
has
little, if
any,
relevance to
of the
instant
policy --
interpreting
particularly
after the
the
SJC
decision in Tufts.
_____
less persuasive.
In
Rumford, the insurance company had argued that the relatively low
_______
the
trial
court
rejected that
________
on
to calculate
appeal
was the
argument,
even appeal.
insurance
issue,
premium
the Supreme
a ruling
Court of
from
Instead, the
company's
Rhode Island
which the
only issue
alleged bad
In the context of
The
faith
in
resolving that
stated that
the low
arguable
company's
basis
for
denying
coverage."
Since
a frivolous one,"
the
insurance
its conduct of
. . . failed to
bad faith."
Id. at
___
400-01.
-12-
amount
B.
Each
which
policy contains
removes
rendering or
from
"plainly
The
omits
`professional'
professional
coverage
failure to render
services."
liability
services
"arising
coverage
it might
court found
for any
___
be)."
out
of
. . supervisory, inspection
district
exclusion,
that
inspection
the
by or
or engineering
this
endorsement
service
(however
v. Metropolitan
____________
6 (D.
We disagree.
By
its own
plain
terms,
the
endorsement
examples.
category
The
examples themselves
"professional
than subsets of
the
inspections
reasoning
only
the
are
90,
Thus,
broader than
that
endorsement.
services."
cannot be
as
in finding
that lead
413 Mass.
paint exposure
was
not within
and waste,"
because
soot, fumes,
of additional
acids, alkalis,
requirement
of
chemicals
"discharge,
-13-
In
(1992),
the Supreme
Judicial
that
Court applied
N.E.2d 214
a formulation
for
case.
To be engaged in
professional services,
"[s]omething more
or vocation is
essential.
The act or
as
exacts
the use
or application
attainments of some
means
something
kind.
more
of special
learning or
mere
proficiency
. .
in
the
`professional' act
vocation,
calling,
specialized
skill
rather
or service
occupation,
knowledge, labor,
involved
is
than physical
look not
or
or
arising out
employment
skill and
predominantly mental
or
is one
manual. .
is . . . a
to the title
involving
the labor
or
.
of a
or
intellectual,
In
determining
`professional service'
or character
of the
party
412 Mass. at 48, 587 N.E.2d at 217 (quoting Marx v. Hartford Acc.
____
_____________
(citations omitted)).
Neb.
12, 13,
N.W.2d
870, 872
(1968)
applicability of professional
157
See
___
(professional
services
exclusion
applies
to
attorney's
County Bd. of County Comm'rs., 811 F.2d 1371, 1379-84 (10th Cir.
______________________________
1987)
(professional
personnel's provision
services
of emergency
(professional
exclusion
medical
applies
to
ambulance
services); Bank of
________
services exclusion
applies
to mortgage
broker's
-14-
court's decision
under
this
whether,
endorsement,
under
and
remand
Massachusetts
law,
for
necessarily excluded
determination
Metropolitan's
of
inspectors
Even
if
Metropolitan's
inspections
the
underlying lawsuits
because,
after
Metropolitan,
we
--
collectively,
the
at least
the
find
some of
claims
found
to
reviewing
that
are
initially.
complaints
filed
claims
defend
is
so
against
raise
legal
Taken
include
the
This
be
negligence,
negligent
misrepresentation,
negligently
creating
lead
paint
risk,
correct
a lead paint
hazard, failure to
obtain certificates of
compliance with the lead paint law, and breach of contract and/or
At
least
on
susceptible" of
are beyond
failure
theory
the
to
face,
being read to
the inspection
391 Mass. at
their
these
claims
are
"reasonably
"state or adumbrate"
claims that
services exclusion.
correct a
lead paint
Liberty Mutual,
______________
Continental Cas.,
________________
risk appears
to rest
on the
responsibility
to
make
whatever
lead
paint
safety
improvements
theory
were necessary.
that the
inspections
were all
perfectly adequate,
but
-15-
Metropolitan's
follow up
was lacking.
318,
458
N.E.2d
338, 341
(1983)
("[T]he
process
See
___
Ct. 316,
is one
of
envisaging
range
of
whether
the
any
allegations
such
loss
of the
fits
insurance
reasonably generated
(emphasis
added); cf.
___
F.2d 90,
defend
because
construed, are
express
the
by
and
expectation
the terms
of
protective
of the
they
contain
claims
policy.")
on whether
such expansive
insurer must
that,
no view
then seeing
suits
complaint,
liberally
exclusion).
We
theories ultimately
professional services
underlying
suits
notwithstanding the
possibility
to defend the
that certain
Mass. App.
(imposing a
Ct. at
defend despite
323, 568
N.E.2d at 634
duty to
fell within the exclusion"); see also Aetna Cas. & Surety Co. v.
___ ____ ________________________
n.1
32
to defend all
least one
count of
a complaint").
As
court
____________________
4 Nor need
grant
of coverage
"even
agreed to defend
if the
-16-
allegations
suits within
the
of the
are
suit
of
the
underlying action
excludable
with
reservation of
respect
to the
claims" or
it may
defense
rights
with
share respective
III. Conclusion
__________
services
be obligated to
against
Metropolitan
resolved,5
or an
until
the
non-excludable
arrangement such as
claims
contemplated by
are
the Camp
____
have to
defend
If the
the suits
and
indemnify Metropolitan
for
any
successful claims.
consistent
with this
opinion
of
whether
Metropolitan's
_________________________________________________________________
____________________
5 In
this case,
we would imagine
test the
were removed,
it
underlying cases
appears that
If those claims
GRE's obligation
would terminate.
or for
See Sterilite,
___ _________
to defend
the
17 Mass. App.
-17-
Of
-18-