42 Mass. App. Ct. 94 | Mass. App. Ct. | 1997
Two insurance companies here clash over whose policy should provide coverage to their common insured, an ambulance company sued for negligence. The alleged negligent conduct was delay on the part of the company’s ambulance, summoned by the local police to re
The appellant, The Jefferson Insurance Company of New York (Jefferson), had issued an “Ambulance Attendants Errors and Omissions” policy (E & O policy) to the ambulance company shortly before the incident triggering the litigation.
Jefferson commenced a declaratory judgment action to determine which policy should provide coverage.
The judge initially observed that National’s CGL policy itself “unambiguously covers the damages alleged ... [as a result of the] miscommunication between the dispatcher and the attendants.” He nonetheless appears to have reasoned that the ambulance attendants’ conduct constituted covered professional activities within the terms of the Jefferson E & O
Despite National’s unsupported contention to the contrary, the critical, but undefined, term “professional services” in National’s CGL policy is ambiguous and requires our construction because it is “reasonably susceptible to varying readings.” Middlesex Ins. Co. v. American Employers Ins. Co., 9 Mass. App. Ct. 855, 856 (1980). See also Lumbermens Mut. Cas. Co. v. Offices Unlimited, Inc., 419 Mass. 462, 466 (1995).
We begin with basic canons of contract construction, which mandate that doubts created by any ambiguous terms in a policy are to be resolved against the insurer (here National) and also require exclusionary clauses to be strictly construed
Two recent Massachusetts decisions addressing the undefined term “professional services” in different insurance contexts provide additional guidance. Camp Dresser & McKee, Inc. v. Home Ins. Co., supra, involved the issue whether the failure, by an insured consulting company supervising a municipal project, to warn municipal employees working on the project of certain job hazards was within a CGL policy that contained an exclusion for damages “arising out of the rendering or failure to render any professional services.” Id. at 320. In applying the above-mentioned interpretive principles, this court viewed the allegedly actionable activities as “management tasks” of a nonprofessional nature, id. at 324-325, and construed the exclusion to encompass only “purely professional activities,” id. at 325, involving an “occupation [that] requires specialized knowledge and calls for mental rather than physical skills.” Id. at 324.
Further clarification was provided in Roe v. Federal Ins. Co., supra, which concerned the issue whether a dental malpractice policy promising to pay for injuries “arising out of the rendering or failure to render . . . professional services” covered damages occasioned by a dentist’s improper sexual relationship with a patient. In the course of holding that it
“ ‘Something more than an act flowing from mere employment or vocation is essential. The act or service must be such as exacts the use or application of special learning or attainments of some kind. The term “professional” in the context used in the policy provision means something more than mere proficiency in the performance of a task and implies intellectual skill as contrasted with that used in an occupation for production or sale of commodities. A “professional” act or service is one arising out of a vocation, calling, occupation, or employment involving specialized knowledge, labor, or skill, and the labor or skill involved is predominantly mental or intellectual, rather than physical or manual .... In determining whether a particular act is of a professional nature or a “professional service” we must look not to the title or character of the party performing the act, but to the act itself.’[12 ] . . . [Membership in a profession has traditionally been recognized as requiring the possession of special learning acquired through considerable rigorous intellectual training . . . ,‘[T]he scope of professional services does not include all forms of a medical professional’s conduct simply because he or she is a doctor or dentist’ . . . [A]n act or service that requires no professional skill [is not a professional service]. Common sense, of course, will always provide a useful guide in differentiating covered from uncovered cases.”
412 Mass, at 48-49 (citations omitted).
It is significant that the court’s holding — that the injurious acts for which coverage was sought were not properly characterized as, and did not fall within the category of, professional services — was reached in the context of determining whether an ambiguous policy provision provided coverage. In such an inquiry, the provision in question is to
That, indeed, has been the conclusion in many cases from other jurisdictions that have construed professional services exclusions in insurance policies otherwise providing coverage for damages from negligent acts. See, e.g., Keepes v. Doctors Convalescent Center, Inc., 89 Ill. App. 2d 36, 40 (1967) (maid negligently leaving young child unattended on floor did not constitute the failure to render professional services); Grant v. Touro Infirmary, 254 La. 204, 217-219 (1969) (miscounting sponges after a surgery not a professional service); D'Antoni v. Sara Mayo Hosp., 144 So. 2d 643, 646-647 (La. Ct. App. 1962) (negligent failure to raise hospital bed rails not a professional service); Duke Univ. v. St. Paul Fire & Marine Ins. Co., 96 N.C. App. 635, 641 (1990) (negligent failure to lock casters on a dialysis chair not within the term “professional services”).
Perhaps most instructive in this regard is Guaranty Natl. Ins. Co. v. North River Ins. Co., 909 F.2d 133 (5th Cir. 1990). There, a psychiatric patient was placed in an “open” fourth floor room (one without mesh screens affixed over the windows) and jumped through a window to her death. The
In supportive contrast, where the negligent conduct alleged to trigger coverage did involve specialized knowledge and skills, courts elsewhere have found the professional services exclusion to apply. See, e.g., Alpha Therapeutic Corp. v. St. Paul Fire & Marine Ins. Co., 890 F.2d 368, 370-371 (11th Cir. 1989) (exclusion applies to error by medical technician in transcribing medical test results because such activity involves some degree of technical expertise); Northern Ins. Co. v. Superior Ct., 91 Cal. App. 3d 541, 544 (1979) (exclusion applies to error by physician’s clerical employee in confusing patients’ records and causing physician to operate on wrong patient, as it “is beyond dispute that a physician has the professional duty to correctly identify a surgical patient before undertaking a particular procedure”); Millers Cas. Ins. Co. v. Flores, 117 N.M. 712, 716 (1994) (exclusion in physician’s business liability policy applies to unsupervised and untrained physician assistant’s giving patient “contraindicated injection,” which resulted in a stroke, as the hiring and supervision of employees assisting in providing medical care to patients was part of the rendering of professional medical services); Duncanville Diagnostic Center, Inc. v. Atlantic Lloyd’s Ins. Co., 875 S.W.2d 788, 791 (Tex. Ct. App. 1994) (exclusion applies to administering overdose of sedative by technician).
Applying the canons of construction, the discussions in Roe and Camp Dresser, and the analytical approach reflected in other jurisdictions to the underlying facts here, we conclude that the negligent conduct complained of did not constitute
Indeed, to rule otherwise — particularly in the context of a CGL policy generally intended and expected to provide broad liability coverage for tort claims arising out of the insured’s entire business and administrative operations, cf. Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 847-849 (1993); Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. at 319-321, 323
Since the judge ruled that there was no concurrent coverage, he did not reach the additional point Jefferson presses on appeal, that National was in breach of its duty to defend the insured ambulance company.
Charged with a contractual duty to defend because its policy provided coverage in the underlying action,
The judgment is vacated. The case is remanded to the Superior Court for entry of: (a) a declaratory judgment that National’s CGL policy provided concurrent coverage of the underlying claim and required National to participate with Jefferson in the defense and settlement of that claim; and (b) summary judgment in favor of Jefferson requiring National to contribute and indemnify Jefferson for one-half of the reasonable costs of the defense and settlement of the underlying action.
So ordered.
The ambulance company had contracted with the municipality (Peabody) in which the emergency occurred to provide such service.
The complaint also alleged further negligent delay by the ambulance attendants at the decedent’s residence and breach of the ambulance company’s contractual obligations to the municipality, but those allegations are not at issue in this appeal.
The miscommunication consisted either of the dispatcher’s misrouting the ambulance or of the attendants’ mistake in proceeding to the wrong address.
The decedent had collapsed at his residence, 6 Rockdale Park, Peabody. The local police, called by the decedent’s wife, had contacted the company’s dispatcher, pursuant to the company’s contract with Peabody. The dispatcher told the company’s ambulance, standing by in an adjacent town and staffed by two trained emergency medical technicians, “to respond to 6 Rockdale.” The ambulance driver assumed that this meant “Rockdale Avenue,” as did her colleague, who had looked into a “map book” under “Rockdale” in Peabody and found a listing for Rockdale Avenue. After failing to discover any residence numbered 6 at Rockdale Avenue, the attendants called the dispatcher, who then “told [them] it was [6] Rockdale Park.”
Jefferson’s E & O policy generally covered damages “arising out of the performance of services ... in connection with . . . [the] business of ambulance service.”
National’s CGL policy generally covered damages caused by “occurrences,” defined as “accidents,” in the course of the insured’s “ambulance service” business. “The term ‘accident,’ . . . commonly is defined as‘an unexpected happening without intention or design,’ . . . and may include ‘[u]nintended or unforeseen consequences of reckless or negligent acts.’ ” Liberty Mut. Ins. Co. v. Tabor, 407 Mass. 354, 358 (1990) (citations omitted). National had also sold the insured a “Business Automobile Liability Policy,” which Jefferson initially contended provided coverage but has not so argued on appeal.
National asserted before this court that Jefferson had not informed it of the underlying claims or demanded its defense-settlement participation. This assertion is belied by the statement of agreed facts on cross motions for summary judgment and by the trial judge’s finding regarding National’s refusal to provide or contribute to the defense or settlement of the matter.
Jefferson sought a declaration either that its E & O policy did not provide coverage while National’s CGL policy did, or, alternatively, that, if its policy applied, National’s provided concurrent coverage. On appeal, Jefferson has argued only for the alternative relief, effectively requiring National to pay its pro rata share of the defense and settlement.
Jefferson does not here dispute the judge’s ruling that its E & O policy “unambiguously covers the damages alleged in the underlying complaint, regardless of whether it was the dispatcher [or] the attendants . . . whose actions or omissions caused those damages.”
The judge quoted the coverage section of Jefferson’s E & O policy that specifically promises to defend and indemnify the insured ambulance company for actions of any “employee in the employee’s profession as a Certified Emergency Medical Technician ... or Ambulance Driver, or Ambulance Attendant.” The judge noted that dispatchers were not included among the “professional” employees listed in the E & O policy but deemed that fact not subversive of his ruling that Jefferson’s policy alone provided coverage, on the grounds that a Jefferson underwriting manager conceded (in deposition) that the E & O policy covered any employee acting within the scope of his duties and that the essential injury alleged in the complaint arose out of the failure to render (timely) emergency care services, whatever the reason (dispatcher mistransmission or attendant misunderstanding) for that failure.
Construing the language of an insurance contract generally, interpreting ambiguities in such a contract (when there is no dispute as to underlying facts), and interpreting the scope of any exclusion in an insurance contract are all questions of law for the court, subject to plenary review on appeal. See Ober v. National Cas. Co., 318 Mass. 27, 30 (1945); Cody v. Connecticut Gen. Life Ins. Co., 387 Mass. 142, 146 (1982); Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. 318, 323-324 (1991).
These principles apply even in litigation between presumptively sophisticated insurers, so long as the policy being construed is one issued to a noninsurance company. See Middlesex Ins. Co. v. American Employers Ins. Co., 9 Mass. App. Ct. at 856. Contrast Boston Ins. Co. v. Fawcett, 357 Mass. 535, 543 (1970) (the liberal principles of construction against an insurer do not apply to disputes over contracts of reinsurance, where all the parties to the litigation are themselves large insurance companies).
These statements were approvingly quoted by the court from Marx v. Hartford Acc. & Indem. Co., 183 Neb. 12, 13-14 (1968), and were observed by the court to have “been widely accepted.” Roe, supra at 48.
The court observed that a “dentist’s area of professional work involve[s] the patient’s teeth,” Roe, supra at 50; and that a dentist’s “professional services . . . [comprise] the cleaning and examination of teeth, the replacement of fillings, the extraction of a tooth, and appropriate follow-up care . . . .” Roe, supra at 49.
The summary judgment record does not clarify whether the chargeable fault was the dispatcher’s failure to supply the correct address, or the ambulance driver’s failure to hear or understand the exact street name supplied, or the ambulance attendant’s incomplete examination of the map book, or both emergency medical technicians’ failure to verify the correct address when a complete examination would have revealed the ambiguity. This uncertainty is, however, immaterial, because none of those scenarios can, under the proper analysis outlined above and discussed below, be deemed professional.
We note that, in Curtis Ambulance of Fla., Inc. v. Board of County Commrs., 811 F.2d 1371 (10th Cir. 1987), “ambulance services” were deemed “professional services” in the context of a public bidding statute. The court focused, however, on the specified substantive duties of the emergency medical technicians staffing the ambulances. Id. at 1382. There is no dispute that the lifesaving skills of an emergency medical technician require specialized training and knowledge and would, had they constituted the challenged negligent conduct here, clearly have fallen within the professional services exclusion.
It will be recalled (see note 9, supra) that the Superior Court judge observed that the National CGL policy “unambiguously covers the damages alleged in the underlying complaint” prior to ruling that the professional services exclusion took away what the basic policy gave.
National in fact argues that any activities or operations that are “necessary and incidental to the operation of an ambulance service” are “professional” in nature and therefore covered by Jefferson’s policy but excluded from National’s.
With a reasonably narrow reading of the professional services exclusion, the two policies at issue can be seen to complement each other and dovetail in most circumstances — the CGL policy providing general liability coverage except for medical treatment given by ambulance employees, which is covered by the E & O policy — with an occasional overlap in circumstances such as the present. See note 9, supra. The insured’s automobile liability policy with National, see note 5, supra, completes the picture, providing coverage for accidents arising out of the ownership, maintenance, and use of the ambulances, including their loading and unloading.
National’s assertion that Jefferson raised National’s breach of its duty to defend for the first time on appeal is incorrect. The issue was reflected in both the statements of agreed facts and was specifically addressed in Jefferson’s memorandum in support of its motion for summary judgment.
National could always have participated in the defense of the underlying action under a reservation of rights. See Liquor Liab. Joint Underwriting Assn. v. Hermitage Ins. Co., 419 Mass, at 323; Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. at 323 n.4.
Each of the relevant policies in this case contains an “other insurance” clause. Such clauses are generally construed to require apportionment of defense costs among coinsurers on a pro rata basis in proportion to each policy’s limit vis-á-vis the aggregate limit , of all available policies. See Mission Ins. Co. v. United States Fire Ins. Co., 401 Mass, at 495 n.3.; 8A Appleman, Insurance Law and Practice § 4906 at 345-350 (rev. ed. 1981). This is the so-called “majority rule” of allocation of costs in concurrent coverage cases. See Continental Cas. Co. v. Aetna Cas. & Sur. Co., 823 F.2d 708, 712 (2d Cir. 1987). Application of that rule would not change the result here because each policy contained liability limits of $500,000 per claim or occurrence and $500,000 aggregate.
