Aetna Fire Underwriters Ins. Co. v. Southwestern Engineering Co.

• Decision Date: 24 November 1981
• Docket Number: No. 8647,8647
• Citation: 626 S.W.2d 99
• Parties: AETNA FIRE UNDERWRITERS INSURANCE CO., Appellant, v. SOUTHWESTERN ENGINEERING COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 99

626 S.W.2d 99

AETNA FIRE UNDERWRITERS INSURANCE CO., Appellant, v. SOUTHWESTERN ENGINEERING COMPANY, Appellee.

No. 8647.

Court of Appeals of Texas, Beaumont.

Nov. 24, 1981.

Rehearing Denied Dec. 17, 1981.

George H. Spencer, San Antonio, for appellant.

Robert C. Patterson, Corbin L. Snow, San Antonio, for appellee.

CLAYTON, Justice.

Appellee, Southwestern Engineering Company, filed this suit against appellant, Aetna Fire Underwriters Insurance Company, on a liability insurance policy to recover Southwestern's cost of defense and settlement of three property damage suits filed against it, which appellant declined to defend on the grounds that the damages asserted in the suits arose out of engineering services performed by Southwestern which were excluded under the policy provisions. In a non-jury trial, judgment was entered for Southwestern from which Aetna has appealed.

The record before us reveals that Southwestern is a consulting engineering firm which designs telephone systems. Southwestern entered into a contract with Fort Bend Telephone Company to design expansion facilities of Fort Bend in Waller County. Sandidge Construction Company contracted with Fort Bend to construct the facilities designed by Southwestern. On April 3, 1974, while digging a trench into which telephone cable was being buried, Sandidge struck an underground pipeline owned by Phillips Pipe Line Company. As a result, three damage suits were filed against Southwestern. Aetna refused to defend the three damage suits, contending the insurance policy issued to Southwestern did not cover the damages sought in the three suits, and, therefore, it was not obligated to defend such suits. This is the sole contention made by Aetna warranting its refusal to defend the three suits.

The primary question before this court is presented by Aetna's first point which is "(t)he trial court erred in failing to hold that as a matter of law the suits in question asserted damages arising out of engineering services performed by (Southwestern) which were excluded under the policy provisions." We do not agree and overrule this point.

Aetna issued a policy of insurance to Southwestern insuring against general liability for bodily injury and property damage, but excluding therefrom liability from use of automobiles and professional services. The exclusionary provision of the policy is stated as follows:

"It is agreed that the insurance does not apply to bodily injury or property damage arising out of any professional services performed by or for the named insured, including (1) the preparation or approval of maps, plans, opinions, reports, surveys, designs or specifications and (2) supervisory, inspection or engineering services."

It is the contention of Aetna that the location of underground pipelines, under the right-of-ways upon which Fort Bend's facilities were to be located, was one of the contractual obligations undertaken by Southwestern in its contract with Fort Bend. Aetna states in its brief that Southwestern's "duties and activities on the project were completely and solely based on its written contract with Fort Bend." We have carefully read the very lengthy and comprehensive contract between Southwestern and Fort Bend, and we do not find any provisions of such contract specifically authorizing or obligating Southwestern to locate any underground pipelines. Aetna argues that the location of such pipelines is an activity in the performance of "engineering services" and "the preparation or approval of maps, plans, ... surveys, designs or specifications," and, as such, any liability arising from the failure to locate same is excluded from coverage under the exclusionary provision of the insurance policy hereinabove quoted.

In deciding the question before us, we are not called upon to give a definition of the term "engineering services." We note, however, that under the definition of "practice of engineering" or "practice of professional engineering," as defined in the Texas Engineering Practice Act, Tex.Rev.Civ.Stat.Ann. art. 3271a, § 2(4) (1968), it is stated that such terms "shall mean any service or creative work, ... the performance of which requires engineering education, training and experience in the application of special knowledge of the mathematical, physical, or engineering sciences to such services or creative work." The contract between Southwestern and Fort Bend does not define the term "engineering services." We cannot say as a matter of law the physical act of digging for and locating underground pipelines requires engineering education, training, and experience in the application of special knowledge of the mathematical, physical, or engineering sciences, so as to constitute the practice of professional engineering. The least that can be said is that the term "engineering services," not being definitely defined in the contract, is an ambiguous term.

It is a well recognized rule that exceptions and rules of limitations contained in an insurance policy will be strictly construed against the insurer. Continental Casualty Co. v. Warren, 152 Tex. 164, 254 S.W.2d 762 (1953). We must adopt the construction of an exclusionary clause urged by the insured as long as that construction is not itself unreasonable, even if the construction urged by the insurer appears to be more reasonable or a more accurate reflection of the parties' intent. Glover v. National Insurance Underwriters, 545 S.W.2d 755 (Tex.1977); Continental Casualty Co. v. Warren, supra; Insurance Co. of North America v. Cash, 475 S.W.2d 912 (Tex.1971). As stated by our Supreme Court in the Glover case, "We recognize that these rules of construction will be applied only when the language of the policy is such that it may reasonably be given one of several instructions." When the language of an insurance contract is ambiguous (that is, is subject to two or more interpretations), then that construction which affords coverage will be the one adopted. Glover v. National...