Hartford Casualty Insurance v. DP Engineering, L.L.C., 827 F.3d 423

DP Engineering (DP) and employee John Scroggins provided engineering services for removal of a 520-ton stator at an Entergy nuclear plant; during the lift the gantry collapsed causing death, injuries, and property damage.
Entergy and injured workers sued DP and others for breach of contract and negligence; underlying complaints alleged design, inspection, testing, hiring/supervision, and approval failures.
DP was insured by Hartford Casualty and Hartford Lloyds; each policy contained a professional-services exclusion for bodily injury or property damage "arising out of" professional services (e.g., designs, shop drawings, inspections, supervisory/engineering activities).
Hartford sought a declaratory judgment that it had no duty to defend or indemnify DP; the district court granted summary judgment for Hartford on both duties and dismissed DP’s counterclaims.
On appeal the Fifth Circuit reviewed whether the professional-services exclusion precluded (1) Hartford’s duty to defend (based on the pleadings) and (2) Hartford’s duty to indemnify (typically determined by facts developed later).
Court held Hartford had no duty to defend (pleadings arose out of professional engineering services) but reversed the dismissal of the indemnity issue and remanded because indemnity could depend on facts developed later.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Duty to defend: whether the professional-services exclusion bars coverage	DP: some pleaded acts were non-professional (administrative/implementation) and thus potentially covered	Hartford: pleadings allege failures in engineering judgment/design/inspection; exclusion applies	Affirmed: no duty to defend — pleadings arise out of professional engineering services
Definition of "professional services" for exclusion	DP: exclusion ambiguous or inapplicable to some factual allegations (e.g., crane assembly/use)	Hartford: term covers specialized engineering tasks, inspections, designs, approvals	Court: professional services include specialized, mental/judgmental engineering activities; allegations fit that definition
Effect of "bald" allegations that some acts were non-engineering	DP: general statements that employees did non-engineering tasks create potential coverage	Hartford: conclusory labels insufficient; court should examine alleged facts	Held: conclusory assertions do not create coverage when factual allegations show professional services
Duty to indemnify: whether it can be decided now from the pleadings	Hartford: Griffin-like rule applies; pleadings conclusively show no indemnity ever possible	DP: facts at trial could show non-professional causes and create coverage	Reversed and remanded: Griffin exception not applicable; indemnity depends on facts developed later or extrinsic evidence

Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156 (5th Cir. 2006) (standard of de novo review on summary judgment)
National Union Fire Ins. Co. of Pittsburgh v. Merchs. Fast Motor Lines, Inc., 939 S.W.2d 139 (Tex. 1997) (insurer’s duty to defend if pleadings potentially allege covered claim)
Willbros RPI, Inc. v. Cont’l Cas. Co., 601 F.3d 306 (5th Cir. 2010) (Eight Corners Rule and distinguishing professional vs. execution of plans)
Utica Nat’l Ins. Co. of Tex. v. Am. Indem. Co., 141 S.W.3d 198 (Tex. 2004) ("arising out of" requires but-for causation)
D.R. Horton-Texas, Ltd. v. Markel Int’l Ins. Co., 300 S.W.3d 740 (Tex. 2009) (duty to indemnify may require trial or extrinsic evidence)
Farmers Tex. Cnty. Mut. Ins. Co. v. Griffin, 955 S.W.2d 81 (Tex. 1997) (limited Griffin exception where pleadings foreclose any possibility of indemnity)
LCS Corr. Servs., Inc. v. Lexington Ins. Co., 800 F.3d 664 (5th Cir. 2015) (application of Griffin where pleadings could not be transformed into covered conduct)
Gore Design Completions, Ltd. v. Hartford Fire Ins. Co., 538 F.3d 365 (5th Cir. 2008) (insurer bears burden to prove exclusion; doubts resolved for insured)