Jefferson Ins. Co. of New York v. National Union Fire Ins. Co. of Pittsburgh, Pa.

• Decision Date: 27 January 1997
• Docket Number: No. 95-P-1618,95-P-1618
• Parties: The JEFFERSON INSURANCE COMPANY OF NEW YORK v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.
• Court: Appeals Court of Massachusetts

Page 225

677 N.E.2d 225

42 Mass.App.Ct. 94

The JEFFERSON INSURANCE COMPANY OF NEW YORK v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.

No. 95-P-1618.

Appeals Court of Massachusetts Essex.

Argued June 11, 1996.

Decided Jan. 27, 1997.

Dina B. Browne, for plaintiff.

Joseph B. Bertrand, Boston, for defendant.

Before DREBEN, GILLERMAN and LAURENCE, JJ.

LAURENCE, Justice.

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 respond to a medical emergency, ¹ in arriving at the residence of a man who had collapsed with chest pain. The stricken individual died shortly after being transported by the ambulance to a nearby hospital emergency room. An action brought against the company by the decedent's administratrix and widow attributed the death to that delay. ² There is no dispute that the delay was occasioned by miscommunication between the company's radio dispatcher and the ambulance attendants regarding the address to which the ambulance was told to respond. ³

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. ⁴ Jefferson defended the ambulance company against the tort action and eventually settled the matter before trial for $75,000. During the pendency of the action, Jefferson had asked the appellee, National Union Fire Insurance Company of Pittsburgh, Pa. (National), to contribute to both the defense and the settlement, based upon National's issuance of a "Comprehensive General Liability Policy" (CGL policy) to the ambulance company during the year in which the incident occurred. ⁵ National, however, refused to participate in either the defense or the settlement, apparently relying upon National's CGL policy exclusion of coverage for "the rendering of or failure to render ... medical ... or nursing services [or] any service or treatment ... of a professional nature" (the professional services exclusion). ⁶

Jefferson commenced a declaratory judgment action to determine which policy should provide coverage. ⁷ On cross motions for summary judgment, a Superior Court judge ruled for National, holding that Jefferson's E & O policy provided "complete and exclusive coverage" for the claims asserted in the underlying complaint. We conclude that National's CGL policy provided concurrent coverage for the delay in responding to the emergency call. ⁸

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 policy ⁹ and, perforce, was not covered by National's CGL policy because of its professional services exclusion. The judge, we hold, construed the professional services exclusion too expansively, particularly in the context of a general liability policy.

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, 400 N.E.2d 882 (1980). See also Lumbermens Mut. Cas. Co. v. Offices Unlimited, Inc., 419 Mass. 462, 466, 645 N.E.2d 1165 (1995). ¹⁰ Although there is no Massachusetts precedent interpreting the professional services exclusion in the context of medical or ambulance services or of a CGL policy, there are several guideposts that persuade us that the dispatcher's and attendants' actions charged as negligent do not constitute the sort of professional services properly falling within that exclusion.

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 interpreted against the insurer. ¹¹ See Liquor Liab. Joint Underwriting Assn. v. Hermitage Ins. Co., 419 Mass. 316, 322, 644 N.E.2d 964 (1995); Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass.App.Ct. 318, 324, 568 N.E.2d 631 (1991), and cases cited. Application of those canons and the test of common sense, see Roe v. Federal Ins. Co., 412 Mass. 43, 49, 587 N.E.2d 214 (1992), cast doubt on the proposition that misreading or misstating an address or driving to the wrong location constituted a professional service, even on the part of an acknowledged professional. Cf. Camp Dresser & McKee, Inc., supra, at 323, 568 N.E.2d 631 (it is the actual substance of the conduct under scrutiny, not the formal title or position of those involved, that provides the crucial framework for determining the scope of the professional services exclusion).

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, 568 N.E.2d 631. 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, 568 N.E.2d 631, and construed the exclusion to encompass only "purely professional activities," id. at 325, 568 N.E.2d 631, involving an "occupation [that] requires specialized knowledge and calls for mental rather than physical skills." Id. at 324, 568 N.E.2d 631.

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 did not, the Supreme Judicial Court expatiated on the term "professional services":

" '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] ... [M]embership 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, 587 N.E.2d 214 (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 be construed in favor of the insured and coverage. See Charles Dowd Box Co. v. Fireman's Fund Ins. Co., 351 Mass. 113, 119-120, 218 N.E.2d 64 (1966); Hazen Paper Co. v. United States Fid. & Guar. Co., 407 Mass. 689, 700, 555 N.E.2d 576 (1990). Even when thus interpreting the term "professional services" liberally against the insurer, the court would not extend coverage to conduct by a professional that was not an integral part of the specific treatment regimens ordinarily involved in the application of the relevant professional skills. ¹³ The scope of the term "professional services" in the context of an exclusion in an ambulance policy should not be, under the Camp Dresser-Roe analysis, any broader. That is, the term should encompass conduct constituting emergency medical treatment and the related exercise of professional judgment, but should not apply to incidents involving ordinary tasks performed or achievable by those lacking the relevant professional training and expertise.

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, 231 N.E.2d 274 (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, 223 So.2d 148 (...