Williams v. Insurance Co. of North America

961 F.2d 90
CourtCourt of Appeals for the Fifth Circuit
DecidedMay 22, 1992
DocketNo. 90-3780
StatusPublished
Cited by1 cases

This text of 961 F.2d 90 (Williams v. Insurance Co. of North America) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. Insurance Co. of North America, 961 F.2d 90 (5th Cir. 1992).

Opinion

POLITZ, Chief Judge:

S.I. Williams, d/b/a Arthur H. Terry & Company appeals the dismissal of his claims against Insurance Company of North America, his comprehensive general liability insurer, for the cost of defense of third-party indemnity actions. Concluding that INA owed Williams the duty to defend under Louisiana law, we reverse.

Background

A Stone Petroleum Company concrete barge used as a production platform for an oil well in Lake Maurepas, Louisiana was severely damaged by weather and its hull insurer engaged Williams, a marine survey- or, to survey the barge, determine the extent of damage and cost of repair, and seek [91]*91repair bids. On behalf of the insurer, Williams approved Stone’s selection of a repair company and the payment agreement. An explosion and fire occurred resulting in multiple deaths and injuries. Stone initiated a limitation of liability action.

In its suit Stone named Production Management Structural Systems, Inc., the principal contractor, and Holes of Louisiana, Inc., the subcontractor, retained to repair the weather damage. Production, Holes, and their insurers filed third-party claims against Williams, INA declined to defend Williams on the grounds that the suits were not covered by its policy. The policy lists as categories of coverage “Premises — Operations Hazard” and “Products — Completed Operations Hazard” and describes coverage, as “Inspection Companies — Inspecting -for Insurance or Valuation Purposes.” INA maintains that the claims against Williams fall within the “Malpractice and Professional Services” exclusion, which reads:

It is agreed that with respect to any operation described below or designated in the policy as subject to this endorsement, the insurance does not apply to bodily injury or property damage due to the rendering of or failure to render any professional service.

The policy does not define “professional service.”

Williams successfully defended the suits and recovered damages and attorney fees from Production and its insurer for bringing the claims. Williams now seeks to recover from INA the attorney’s fees and costs he incurred. After a bench trial the district court held that the third-party claims against Williams were either professional malpractice claims, or so conclusion-ary and unsupported that they did not trigger a duty to defend. Matter of Stone Petroleum, Inc., No. 87-1598 (E.D.La. Sept. 26, 1990). The trial court denied Williams’ claim for the costs of defense and he timely appealed.

Analysis

Contract interpretation and the issue of contract ambiguity are matters subject to de novo review in this court. See Gladney v. Paul Revere Life Ins. Co., 895 F.2d 238 (5th Cir.1990). Under controlling Louisiana law, the duty to defend arises if there are any facts, which, if taken as true, support a claim for which coverage is not unambiguously excluded. Jensen v. Snellings, 841 F.2d. 600 (5th Cir.1988) (citations omitted); Meloy v. Conoco, Inc., 504 So.2d 833 (La.1987); Leon Lowe & Sons v. Great American Surplus Lines Insurance Co., 572 So.2d 206 (La.App.1990); Williamson v. Historic Hurstville Association, 556 So.2d 103 (La.App.1990); Alombro v. Salman, 536 So.2d 764 (La.App.1988); Bourque v. Lehmann Lathe, Inc., 476 So.2d 1129 (La.App.1985), cert. denied, 479 So.2d 362 (La.1985). That there may be recovery under a policy obliges the insurer to defend the insured. The duty to defend is determined by comparing the factual allegations of the complaint and the terms of the policy. The complaint is “liberally interpreted” for purposes of determining whether coverage is unambiguously excluded. Williamson, 556 So.2d at 105; Alombro, 536 So.2d at 766; see also W. McKenzie & H. Johnson, 15 Louisiana Civil Law Treatise § 211 (1986).

Williams contends that the charges against him reflected claims beyond the professional service exclusion. Williams need only establish coverage for one claim; additional uncovered claims do not vitiate the coverage. Jensen, 841 F.2d at 612. Williams has demonstrated that coverage is not unambiguously excluded for at least one of the claims by each of the third-party plaintiffs. Holes and its insurer pleaded that, “[t]he explosion occurred solely, or in part as a result of the fault, negligence or other omissions of ... [Williams] and/or its agents servants and employees.” This pleading also seeks punitive damages due to Williams’ “reckless and willful disregard of the safety of third party plaintiff’s personnel and property and/or gross negligence in failing to insure that the barge was safe for the work undertaken.” Similarly, Production and its insurer accused Williams of “failing to [92]*92properly ensure that the production facility was safe for the specified work.”. The pleading also claimed entitlement for damages “[a]s a result of the fault, neglect, or breach of the warranty of workmanlike performance, and/or the breach of contractual, quasi-contractual and/or other legal obligations on the part of [Williams].” In the alternative, Production pleaded that Williams breached a warranty of fitness of the company and its employees in performing their job assignments.

Liberally construed, these pleadings include claims that go beyond the purview of professional services. In Gregoire v. AFB Construction, Inc., 478 So.2d 538 (La.App. 1985), a general liability insurer was liable for costs of defense despite a policy exclusion for “any liability arising out of any professional services performed by ... the Insured[.]” 478 So.2d at 540 n. 1. Gre-goire was a tort action for injuries incurred while the plaintiff was working on a project for Star Telephone Co. During this time the insured was providing Star with engineering services. The plaintiff pleaded that the insured was negligent in supervision of the project and had allowed the project to proceed when it knew, or should have known, of the danger. The Louisiana intermediate appellate court held that:

Interpreted liberally, [the] allegations that [the insured and another defendant] knew of the danger but allowed the project to proceed, could be construed to include the breach of the general duty of reasonable care, (owed by all involved in the project), to report unsafe conditions. Such a duty to warn could be found to be outside of the “professional” or “supervisory” services [the insured] agreed to perform in its contract....

Id. at 541 (citations omitted). Similarly, the general liability policy at issue in CBM Engineers, Inc. v. Transcontinental Insurance Co., 460 So.2d 745 (La.App.1984), excluded “bodily injury or property damage arising out of the rendering of or the failure to render any professional services by ... the named insured_” The insured provided consulting structural engineering services on a construction project at which an injury occurred when an elevator fell. The insured was called to task for failing to inspect the elevator, failing to instruct regarding its safe use and its safety mechanisms, failing to place warning labels on the elevator, and in general for failing to make sure that everything at the site was free from defects. This final allegation, according to the court, “could be construed to include the breach of the general duty of reasonable care, owed by all

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