Marx v. Hartford Acc. & Indem. Co.
| Citation | 183 Neb. 12,157 N.W.2d 870 |
| Decision Date | 05 April 1968 |
| Docket Number | No. 36756,36756 |
| Parties | Louis E. MARX and Paul D. Marx, a Co-Partnership, Appellees, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, Impleaded with Federal Securities Company, Inc., a Nebraska Corporation, Appellee. |
| Court | Supreme Court of Nebraska |
Syllabus by the Court
1. In the absence of a statute to the contrary, the risks insured against under a policy of liability insurance are determined by the terms of the policy and not by the liability of the insured. And, if plainly expressed, insurers are entitled to have such limitations construed and enforced as expressed.
2. 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.
3. 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.
4. Generally, the obligation of an insurer to defend is no broader than the insuring agreement.
Cline, Williams, Wright, Johnson, Oldfather & Thompson, Lincoln, for appellant.
Chambers, Holland & Dudgeon, Lincoln, for appellees.
Heard before WHITE, C.J., and CARTER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.
This is a declaratory judgment action. The question involved is whether Hartford, plaintiffs' malpractice insurer, is liable for fire damage to plaintiffs' offices resulting from the negligence of an employee technician. The district court entered judgment for plaintiffs against Hartford. We reverse the judgment.
In refilling the hot water sterilizer, plaintiffs' employee mistakenly poured benzine instead of water into the sterilization container. Fumes exploded causing a fire, and extensive damage to the building resulted. Routine sterilization is accomplished by boiling for 15 minutes in water. No patient was present or being treated.
Hartford's policy provided: 'To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of injury arising out of: (a) malpractice, error or mistake of the insured, or of a person for whose acts or omissions the insured is legally responsible * * * In rendering or failing to render professional services, * * * committed during the policy period in the practice of the insured's profession described in the Declarations.' (Emphasis supplied.)
Generally, the plaintiffs are legally liable for the damage caused by the negligent act of their employees during the course of employment. But the precise question is whether the damage arose out of the rendering or failure to render professional services. In the absence of a statute to the contrary, the risks insured against under a policy of liability insurance are determined by the terms of the policy and not by the liability of the insured. And if plainly expressed, insurers are entitled to have such limitations construed and enforced as expressed. Lonsdale v. Union Ins. Company, 167 Neb. 56, 91 N.W.2d 245; 45 C.J.S. Insurance § 824, p. 872; 29 Am.Jur., Insurance, s. 250, p. 632.
The insurer's liability is thus limited to the performing or rendering of 'professional' acts or 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. Steinbeck v. Gerosa, 4 N.Y.2d 302, 175 N.Y.S.2d 1, 151 N.E.2d 170; People v. Sterling Optical Co., Inc., 26...
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