Hermitage Ins Co v. Brewer ( 2003 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-60201
Summary Calendar
HERMITAGE INSURANCE COMPANY
Plaintiff - Appellee
v.
GEORGE BREWER; ET AL
Defendants
GEORGE BREWER; MALCOLM G GOODMAN
Defendants - Appellants
Appeal from the United States District Court
for the Southern District of Mississippi
No. 3:01-CV-9-BN
December 30, 2002
Before KING, Chief Judge, and DEMOSS and BENAVIDES, Circuit
Judges.
PER CURIAM:*
Defendants-Appellants George Brewer and Malcolm Goodman
appeal the district court’s denial of their motion to dismiss,
denial of their motion for summary judgment, and grant of
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
No. 02-60201
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Plaintiff-Appellee Hermitage Insurance Company’s motion for
summary judgment. For the following reasons, we AFFIRM.
I. FACTUAL AND PROCEDURAL HISTORY
Roger Creger is the sole owner of Future Energy, Inc.
("Future Energy"), a corporation that assists utility companies
with installation and maintenance of high-voltage electrical
breakers. Roger Creger obtained a general commercial liability
insurance policy from Hermitage Insurance Company (“Hermitage”).
The policy was purchased through the Association for Independent
Managers and lists the Association for Independent Managers,
Roger Creger, and several other individuals as named insureds.
The policy does not name Future Energy or Randy Creger as
insureds.1
Future Energy entered into a contract with Entergy Services,
Inc. (“Entergy”) to counsel Entergy on maintenance of electrical
breakers. According to the contract and its subsequent
amendments, Future Energy was to offer advice on how maintenance
should be performed and Entergy employees were to perform the
1
Section II of the policy explains who is considered an
insured. The policy states:
1. If you are designated in the Declarations as:
a. An individual, you and your spouse are
insureds, but only with respect to the conduct of
a business of which you are the sole owner. . . .
2. Each of the following is also an insured:
a. Your “employees”, other than your “executive
officers”, but only for acts within the scope of
their employment by you or while performing duties
related to the conduct of your business. . . .
No. 02-60201
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actual physical maintenance on the breakers. Randy Creger,
Roger's brother, was the Future Energy employee sent to consult
to George Brewer and Malcolm Goodman, the Entergy employees who
were to perform the maintenance. Randy Creger advised Brewer and
Goodman to clean the breakers using denatured alcohol. When
Brewer and Goodman followed these instructions, their alcohol-
soaked rags burst into flames and they were severely injured.
Brewer and Goodman each brought suit in Mississippi state
court against Randy Creger and Future Energy, alleging breach of
contract and negligence and seeking punitive damages.2 When
Randy Creger and Future Energy submitted a claim to Hermitage,
Hermitage denied coverage because neither was a named insured
under the policy. Brewer and Goodman then amended their
complaints to add Roger Creger and Hermitage as defendants.
Hermitage denied coverage for Roger Creger’s claim, citing the
policy’s professional liability exclusion.3
2
Brewer’s and Goodman’s complaints are virtually
identical.
3
The professional liability exclusion reads:
EXCLUSION – ENGINEERS, ARCHITECTS[,] OR SURVEYORS
PROFESSIONAL LIABILITY
. . .
This insurance does not apply to “bodily injury,”
“property damage,” “personal injury[,]” or “advertising
injury” arising out of the rendering or failure to
render any professional services by or for you,
including:
1. The preparing, approving, or failing to prepare or
approve maps, drawings, opinions, reports, surveys,
change orders, designs[,] or specifications; and
No. 02-60201
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Hermitage then filed suit in federal court against Brewer,
Goodman, Roger and Randy Creger, and Future Energy. Hermitage
sought a declaration that: (1) Randy Creger and Future Energy are
not insureds under the policy, so that there is no coverage and
no duty to defend the state-court suits with respect to them; (2)
the professional services exclusion and the contractual liability
exclusion bar coverage for the tort and contract claims against
Roger Creger; and (3) the punitive damages endorsement bars an
award of punitive damages to Brewer and Goodman.
Brewer and Goodman brought a motion to dismiss the federal
suit based on the “first to file” rule and on principles of
Brillhart abstention. The district court denied their motion.
The district court determined that the “first to file” rule was
only applicable when there are two federal-court proceedings, not
a state-court proceeding and a federal-court proceeding. The
district court also determined that Brillhart abstention was
inappropriate because there was not a state-court proceeding that
included all of the parties and all of the issues so that
Hermitage could be subject to inconsistent verdicts in state
court.
Brewer and Goodman then each settled his state-court claims
against Roger Creger, Randy Creger, and Future Energy. By the
2. Supervisory, inspection[,] or engineering services.
No. 02-60201
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terms of the settlement, a $1,000,000 judgment was entered
against Roger Creger, Randy Creger, and Future Energy. The
settlement specifies that Brewer and Goodman may not seek payment
from Roger Creger, Randy Creger, or Future Energy if it is
determined that there is no coverage available under the
Hermitage policy.
After some discovery in federal court, Hermitage filed a
motion for summary judgment and Brewer and filed a cross-motion
for summary judgment, which Roger Creger, Randy Creger, and
Future Energy joined. The district court granted Hermitage’s
summary judgment motion and denied the federal-court defendants’
summary judgment motion. Initially, the district court agreed
with Hermitage that because the state-court case settled with the
alleged insureds escaping liability, Hermitage no longer had a
duty to provide coverage under the terms of the policy.
Nonetheless, the district court found Hermitage could be bound by
the state-court settlement agreement if it breached its duty to
defend an insured. The district court determined that Hermitage
did not breach its duty to defend Future Energy or Randy Creger
because neither was an insured under the policy.4 The district
court found that Roger Creger was an insured, but that Hermitage
4
The district court also rejected Brewer’s and Goodman’s
argument that Hermitage was bound to provide coverage for Randy
Creger and Future Energy due to statements by Jack Winebrenner,
who Brewer and Goodman claimed was a Hermitage agent.
No. 02-60201
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did not breach its duty to defend Roger Creger because the
contractual liability exclusion barred coverage for Brewer’s and
Goodman’s breach-of-contract claims, the professional liability
exclusion barred coverage for Brewer’s and Goodman’s negligence
claims, and the punitive damages endorsement barred coverage for
punitive damages.
Hermitage and Brewer appeal.5 They claim that the district
court erred in refusing to dismiss the federal-court case, in
denying their motion for summary judgment, and in granting
Hermitage’s motion for summary judgment. Specifically, they
argue: (1) Brillhart abstention is appropriate; (2) Randy Creger
and Future Energy are insureds under the policy; (3) the state-
court settlement absolving the insureds of personal liability
does not bar coverage; and (4) the professional services
exclusion does not bar coverage.
II. STANDARD OF REVIEW
This court reviews a district court’s decision whether to
stay proceedings for an abuse of discretion. E.g., Wilton v.
Seven Falls Co., 515 U.S. 277, 288-89 (1995); Black Sea Inv.,
Ltd. v. United Heritage Corp., 204 F.3d 647, 649 (5th Cir. 2000).
We have previously noted that “[a] district court has broad
discretion to retain or dismiss a declaratory judgment suit where
5
Randy Creger, Roger Creger, and Future Energy do not
appeal.
No. 02-60201
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a parallel state court suit has been filed.” Cornhill Ins. PLC
v. Valsamis, Inc., 106 F.3d 80, 84 (5th Cir. 1997).
We review a grant of summary judgment de novo, applying the
same standards as the district court. Daniels v. City of
Arlington, 246 F.3d 500, 502 (5th Cir.), cert. denied, 122 S. Ct.
347 (2001). Summary judgment should be granted if there is no
genuine issue of material fact for trial and the moving party is
entitled to judgment as a matter of law. FED. R. CIV. P. 56(c).
A genuine issue of material fact exists when there is evidence
sufficient for a rational trier of fact to find for the non-
moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586-87 (1986). In determining if there is a
genuine issue of material fact, the court reviews the evidence in
the light most favorable to the non-moving party. Daniels, 246
F.3d at 502.
This is a diversity case and the parties agree that
Mississippi insurance law applies. We review a district court’s
interpretation of an insurance contract under Mississippi law de
novo. Mulberry Square Prods., Inc. v. State Farm Fire & Cas.
Co., 101 F.3d 414, 420 (5th Cir. 1996). Under Mississippi law,
“where an insurance policy is plain and unambiguous, a court must
construe that instrument, like other contracts, exactly as
written.” Centennial Ins. Co. v. Ryder Truck Rental, Inc., 149
F.3d 378, 382 (5th Cir. 1998). If the terms of a policy are
No. 02-60201
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ambiguous, we interpret them in favor of the insured. Id. at
382-83.
III. DISCUSSION
A. Motion to Dismiss Based on Brillhart Abstention
As a threshold matter, we consider whether the district
court abused its discretion in refusing to dismiss the federal
declaratory-judgment action based on principles of Brillhart
abstention. In Brillhart v. Excess Insurance Co. of America, the
Supreme Court determined that abstention in a federal-declaratory
judgment suit may be appropriate when there is a pending state-
court proceeding. See 316 U.S. 491, 494-97 (1942). The Court
explained that the district court “should ascertain whether the
questions in controversy between the parties to the federal suit
. . . can be better settled in the proceeding pending in the
state court.” Id. at 495. In making this determination, the
district court should consider “whether the claims of all parties
in interest can satisfactorily be adjudicated in that [state-
court] proceeding, whether necessary parties have been joined,
whether such parties are amenable to process in that proceeding,
etc.” Id. The Fifth Circuit has added other factors to
Brillhart list, including: whether the plaintiff filed suit in
anticipation of a lawsuit filed by the defendant; whether the
plaintiff engaged in forum shopping; whether inequities exist in
allowing the plaintiff to gain precedence in time or change
No. 02-60201
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forums; whether a federal forum is more convenient for parties
and witnesses; and whether retaining federal jurisdiction would
promote judicial economy. Travelers Ins. Co. v. La. Farm Bureau
Fed’n, Inc., 996 F.2d 774, 778 (5th Cir. 1993).
The district court reviewed the Brillhart factors and
determined that abstention was unwarranted. We find no abuse of
discretion in its decision. At the time of the motion to
dismiss, the state actions did not include the same parties as
the federal action. Though Hermitage had been served in the
Brewer suit, it had not been served in the Goodman suit, despite
the fact that it had been added as a defendant almost two years
prior.6 Further, as the district court correctly noted, there
were two lawsuits pending against Hermitage in state court based
on identical facts and identical legal arguments, which exposed
Hermitage to the possibility of inconsistent judgments.7
Finally, Hermitage does not appear to have been forum shopping in
6
Brewer and Goodman base a large part of their argument
that abstention is appropriate on the fact that Hermitage was
eventually served in the state-court Goodman litigation. First,
Brewer and Goodman apparently never brought this fact to the
district court’s attention, and this fact is not in the record on
appeal, so it should not be considered. See, e.g., Kemlon Prods.
& Dev. Co. v. United States, 646 F.2d 223, 224 (5th Cir. 1981).
Second, even if Hermitage had been served in both cases, there is
still the risk of inconsistent verdicts, so that the district
court did not abuse its discretion in refusing to abstain.
7
Though Brewer and Goodman allege that the parties
agreed to consolidate the state-court actions, there is no
evidence that the two state-court suits were ever joined.
No. 02-60201
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coming to federal court; rather, it wished to resolve an issue
that had been pending in state court for two years. Though the
state-court suits contained the same issues as the federal suit
and dealt exclusively with state law, the district court properly
weighed the factors for and against abstention and determined
that it need not dismiss this action.
B. Summary Judgment Motions
We next consider whether the district court erred in
granting Hermitage’s motion for summary judgment and denying
Brewer and Goodman’s motion for summary judgment. Because the
material facts are undisputed, we are called upon to construe the
meaning of the Hermitage policy as a matter of law.
Before we construe the terms of the policy, we must consider
whether the settlement agreement and consent judgment in state
court preclude a finding of liability against Hermitage. Brewer
and Goodman argue that the district court erred in determining
that because the state-court settlement absolves all alleged
insureds of personal liability, Hermitage has no liability for
coverage. The district court did not err. According to the
policy, Hermitage “will pay those sums that the insured becomes
legally obligated to pay as damages because of ‘bodily injury’ or
‘property damage’ to which insurance applies.” The Settlement
Agreement states that Roger Creger, Randy Creger, and Future
Energy are not personally liable for the settlement amount in the
No. 02-60201
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event that there is no coverage under the Hermitage policy.8 We
have previously encountered this situation. In Jones v. Southern
Marine & Aviation Underwriters, Inc., we held that under
Mississippi law, when personal liability of an insured is a
condition of coverage and the insured is not personally liable
under a settlement agreement, the insurer is not obligated to pay
third-party victims under the settlement agreement.9 See 888
F.2d 358, 361 (5th Cir. 1989); see also Putman v. Ins. Co. of N.
Am., 673 F. Supp. 171, 177 (N.D. Miss. 1987), aff’d, 845 F.2d
1020 (5th Cir. 1988) (under Mississippi law, an agreement that
removed personal liability of insured over a set amount also
8
The settlement agreement states that Future Energy,
Roger Creger, and Randy Creger
agree[] to accept[] a settlement of these actions with
plaintiffs for the One Million Dollars ($1,000,000.00)
in liability limits under the Hermitage Policy. In
exchange for this agreement, plaintiffs will not seek
to recover from Future Energy, Inc., Roger Creger[,]
and Randy Creger, any of the funds dedicated to payment
under this Settlement Agreement in the event of a final
adjudication that coverage does not exist under the
Hermitage Policy.
9
Jones is factually similar to this case. The Jones
plaintiffs settled their state-court suit with the insured and
one insurance company, but a second insurance company,
Underwriters, did not participate in the settlement negotiations
or consent to the settlement agreement. See 888 F.2d at 359-61.
We found that because personal liability was a condition
precedent to coverage, Underwriters was not liable to pay the
settlement amount, even if there was coverage under the policy.
See id. at 361-62. We then noted that “[t]he only circumstance
in which Underwriters can be bound by the agreed judgment” is if
it waived its right to rely on the policy condition because it
breached a duty to its insured, such as the duty to defend. Id.No. 02-60201
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removed obligation of the insurer to pay because the insurance
policy provided coverage only if the insured was liable). Roger
Creger, Randy Creger, and Future Energy are not “legally
obligated to pay” any sum, so the district court correctly found
that under the terms of the policy, Hermitage cannot be found
liable for coverage.
Brewer and Goodman argue that Hermitage may nonetheless be
liable for the settlement amount if Hermitage breached its duty
to defend. The district court agreed. The district court was
correct, for under Mississippi law, “when an insurer breaches its
duty to defend an insured, the insurer is liable and bound by any
settlement agreements made by the insured as a result of this
breach.”10 Miss. Ins. Guaranty Ass’n v. Byars, 614 So. 2d 959,
964 (Miss. 1993); see also Jones, 888 F.2d at 362. An insurer
that breaches its duty to defend may be found liable for a
settlement even if the settlement absolves the insured of
personal liability.11 See Jones, 888 F.2d at 362.
10
We have further explained that under Mississippi law,
an insurer that breached its duty to defend will be liable for
any settlement agreement up to the policy limits, but will not be
liable for settlement costs or other consequential damages. See
Liberty Mut. Fire Ins. Co. v. Canal Ins. Co., 177 F.3d 326, 336-
39 (5th Cir. 1999). Brewer and Goodman only claim coverage up to
the policy limits in this case.
11
Hermitage argues that under Mississippi law, an insurer
may not waive a condition that relates to policy coverage and the
policy in this case conditions coverage on an insured’s personal
liability. Hermitage is correct that under Mississippi law,
conditions impacting coverage generally may not be waived by
No. 02-60201
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An insurer has a duty to defend if the pleadings in a
lawsuit against an insured arguably state facts that bring the
claimed injury within the policy coverage. See Mulberry Square
Prods., 101 F.3d at 421. “Ultimate liability by the insurer is
not dispositive of its duty to defend. . . . [T]he insurer has a
duty to defend when there is any basis for potential liability
under the policy.” Merchants Co. v. Am. Motorists Ins. Co., 794
F. Supp. 611, 617 (S.D. Miss. 1992).
1. Duty to Defend Randy Creger and Future Energy
We now consider whether Hermitage breached its duty to
defend Randy Creger and Future Energy. Brewer and Goodman
contend that the district court erred in finding that Randy
Creger and Future Energy are not insureds under the Hermitage
policy. The district court found that Randy Creger is not an
insured because he is not one of Roger Creger’s employees. The
district court also found that Future Energy was not an insured
under the policy because the policy only extends to Roger Creger
and Future Energy is a separate legal entity. We agree.
The insurance policy lists, as named insureds, the
Association for Independent Managers and twenty-three
implication. See, e.g., Yazoo County v. Int’l Surplus Lines Ins.
Co., 616 F. Supp. 153, 156 (S.D. Miss. 1985). Yet, we have
specifically held that under Mississippi law, an insurer waives a
policy condition requiring personal liability when it breaches
its duty to defend. See Jones, 888 F.2d at 361-62. Hermitage’s
argument is thus without merit.
No. 02-60201
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individuals, including Roger Creger, who were added by
endorsement. Randy Creger and Future Energy are not named
anywhere in the policy.
Brewer and Goodman argue that Future Energy is an insured
under the policy because coverage extends to businesses that are
solely owned by an insured. The policy states: “If you are
designated in the Declarations as[] [a]n individual, you and your
spouse are insureds, but only with respect to the conduct of a
business of which you are the sole owner.” Brewer and Goodman
read this language to say that both Roger Creger and any business
over which he is the sole owner are insureds. Yet, the policy
language clearly states that Roger Creger is the insured and he
is only covered for activities relating to his wholly-owned
business. Future Energy is not itself an insured; claims against
Future Energy, a separate legal entity, are not covered under the
policy.
Brewer and Goodman argue that Randy Creger is covered by the
policy because he is an employee of Roger Creger. The policy
states that coverage extends to “[y]our employees . . . but only
for acts within the scope of their employment . . .” The state-
court complaints refer to Randy Creger as an employee of Future
Energy, not of Roger Creger. Further, the only evidence on
whether Randy Creger was an employee of Roger Creger was Randy
Creger’s testimony, in which he stated that he was an employee of
No. 02-60201
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Future Energy, not Roger Creger. Future Energy is not an
insured, so Randy Creger is not covered by the policy.12 Thus,
the district court correctly found that there was no breach of
the duty to defend with respect to Randy Creger and Future
Energy.
2. Duty to Defend Roger Creger
Finally, we consider whether Hermitage breached its duty to
defend Roger Creger. The parties agree that Roger Creger is an
insured under the policy. The parties disagree as to whether the
policy’s professional services exclusion bars coverage in this
case.13 The exclusion makes coverage inapplicable to claims
“arising out of the rendering or failure to render any
professional services” including “[s]upervisory, inspection or
engineering services.” The district court found that the
professional services exclusion bars coverage because all of the
claims arise out of services Roger Creger, Randy Creger, and
Future Energy provided that required specialized skill and
expertise. We agree.
Under Mississippi law, a “professional service” is one
12
Because Roger Creger was not Randy Creger’s employer,
we need not consider whether Randy Creger was acting within the
scope of his employment.
13
Brewer and Goodman do not argue on appeal that there is
coverage for the breach-of-contract or punitive damages claims.
Thus, the only issue remaining is whether the professional
services exclusion bars the negligence claim against Roger
Creger.
No. 02-60201
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“arising out of a vocation, calling, occupation, or employment
involving specialized knowledge, labor, or skill, and the labor
or skill involved is predominately mental or intellectual, rather
than physical or manual.” Burton v. Choctow County, 730 So. 2d
1, 5-6 (Miss. 1997); see also Titan Indem. Co. v. Williams, 743
So. 2d 1020, 1025-26 (Miss. Ct. App. 1999). In determining
whether an act is of a professional nature, Mississippi courts
“look not to the title or character of the party performing the
act but to the act itself.” Burton, 730 So. 2d at 7 (quoting
Marx v. Hartford Accident & Indem. Co., 157 N.W.2d 870, 872 (Neb.
1968)).
Whether a claim arises from a professional service is
determined from the allegations in Brewer’s and Goodman’s state-
court complaints. The complaints allege that Roger Creger was
himself negligent and that he is responsible for Randy Creger’s
negligence through the doctrine of respondeat superior. Because
we found that Future Energy, not Roger Creger, was Randy Creger’s
employer, Roger Creger likely is not liable for Randy Creger’s
torts. Nonetheless, we will consider whether claims against both
Roger and Randy Creger were due to injuries caused during the
performance of professional services.
The complaints state that Future Energy, Roger Creger, and
Randy Creger, based on their “skill, training[,] and expertise,
had a duty to design a safe cleaning product to be used” and that
No. 02-60201
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they are liable for their “failure to designate a safe cleaning
solvent,” “failure to exercise ordinary care based on [their]
expertise and training, to know that the denatured alcohol was
inappropriate,” “failure to warn Plaintiff of the dangers of the
use of the denatured alcohol,” “failure to foresee that the
denatured alcohol was subject to sparking,” “failure to supervise
the work with proper safety,” and “failure to follow proper
electrical safety practices.” All of the allegations relate to
decisions the defendants made based on their expertise in
handling high-voltage breakers. The complaints do not allege
negligence based on what a reasonable person would have done
under the circumstances.
Further, the claims arise out of the Future Energy-Entergy
contract, in which Future Energy agreed to furnish consulting
services to Entergy and Entergy agreed to have its employees
perform physical maintenance on the breakers.14 The basis for
14
In their state-court complaints, Brewer and Goodman
characterize the contract as one “for the supervision and
expertise required in overhauling Entergy’s 500,000 volt
electrical breakers” and state that the contract required a on-
site Future Energy consultant to “provid[e] instructions to the
employees of Entergy as to the construction work[] [and] to
ascertain and assure that the construction work was progressing
in strict accordance with the plans and specifications of such
work on such a hazardous activity.” The complaints also state,
“Under said contractual arrangement and agreement, the Defendant
Future [Energy], through its agent and employee in the capacity
of Field Service Engineer, Defendant Randy Creger, designated
supplies, supervised[,] and instructed the employees of Energy in
the repairs of said breakers.”
No. 02-60201
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the contract is that Future Energy has specialized expertise
about high-voltage electrical breakers that even Entergy, a
utility company, did not have. The fact that specialized
expertise was essential to the performance of the contract shows
that the contract was for “professional services.” See Burton,
730 So. 2d at 7-8 (finding that activities a layperson could
perform without special training, such as bathing another person,
are not “professional services”); cf. Thermo Terratech v. GDC
Enviro-Solutions, Inc., 265 F.3d 329, 336 (5th Cir. 2001)
(finding that under Louisiana insurance law, an act that could
have been done by an unskilled or untrained employee is not a
“professional service”). Roger Creger, Randy Creger, and Future
Energy were responsible for giving advice on how maintenance
should be done; they were not hired to actually do the
maintenance. See Cochran v. B.J. Servs. Co. USA, 302 F.3d 499,
507 (5th Cir. 2002) (holding, under Louisiana law, that a
contract that did not “provide[] any instruction, specialized or
otherwise, to contractors on how to accomplish any particular
job” was not a contract for “professional services”). All of the
activities that Brewer and Goodman allege Roger Creger
negligently performed or was responsible for another performing
are thus “professional services.”
Brewer and Goodman contend that Roger Creger and Randy
Creger could not offer “professional services” because they do
No. 02-60201
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not have advanced degrees. Under Mississippi law, though, a
person is not required to have formal training before he can
render a “professional service.” See Burton, 730 So. 2d at 8.
Rather, a person need only have specialized expertise or skill
that is predominantly mental or intellectual. See Burton, 730
So. 2d at 5-6. There is ample testimony that Roger Creger and
Randy Creger developed years of on-the-job experience to become
experts in handling electrical breakers. Indeed, the state-court
complaints consistently refer to Roger Creger and Randy Creger as
experts.15
Brewer and Goodman argue that the professional services
exclusion is ambiguous because the title of the exclusion
suggests that it only applies to engineers, architects, or
surveyors, while the text of the exclusion is more broad, and
that this ambiguity should be resolved in their favor. The mere
15
For example, the complaints state that:
Randy Creger[] held himself out to Plaintiff to be an
expert in this field and has specialized knowledge of
high[-]voltage electrical breaker repairs and the
associated activity thereof. . . .
Randy Creger knew, or by the nature of his training and
expertise, should have known that the denatured alcohol
which he specifically designated for Plaintiff to use
in the cleaning of the breaker had a flashpoint of 54
degrees and that the static electricity of the heavy
voltage nearby was subject to sparking and flaming up
said alcohol. . . .
Defendants, based upon their skill, training[,] and
expertise, had a duty to design[ate] a safe cleaning
product to be used for such cleaning adjacent to high
voltage lines.
No. 02-60201
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fact that the parties disagree about the meaning of a provision
does not make the provision ambiguous. Burton, 730 So. 2d at 6.
The term “professional services” has a well-defined meaning under
Mississippi law. See Burton, 730 So. 2d at 5-6 (Miss. 1997)
(adopting definition used by several other states); Shelton v.
Am. Ins. Co., 507 So. 2d 894, 896 (Miss. 1987). Further, while
the exclusion’s title refers only to “engineers, architects, and
surveyors,” the language of the exclusion clearly refers to all
“professional services,” including, but not limited to,
activities such as engineering and surveying. See Winter Garden
Ornamental Nursery, Inc. v. Cappleman, 201 So. 2d 479, 480 (Fla.
Ct. App. 1967) (stating the “general rule” that while a caption
may be used to explain an ambiguity in the “operative part of the
clause,” it should not be used to “create ambiguity where none
exists”). Many courts have considered the exact language at
issue here and have concluded that the exclusion is not limited
to engineering, architectural, and surveying services. See,
e.g., Cochran, 302 F.3d at 502-08 (interpreting Louisiana law);
Prisco Serena Sturm Architects, Ltd. v. Liberty Mut. Ins. Co.,
126 F.3d 886, 892-93 (7th Cir. 1997) (interpreting Illinois law);
Harbor Ins. Co. v. OMNI Constr., Inc., 912 F.2d 1520, 1522-25
(D.C. Cir. 1990) (interpreting District of Columbia law). The
exclusion is not ambiguous.
Finally, Brewer and Goodman suggest that the policy coverage
No. 02-60201
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is illusory if the professional services exclusion applies in
this case. Though the exclusion bars coverage for claims arising
from bad consulting advice, it does not bar coverage for other
claims arising from Roger Creger’s business operations, such as
claims for personal injuries on business premises or property
damage to business premises. See Prisco Serena Sturm Architects,
126 F.3d at 893 (explaining the difference between comprehensive
general liability coverage and professional liability coverage in
a case with facts similar to this one). Brewer and Goodman also
cite evidence that Roger Creger and Entergy believed the
Hermitage policy was sufficient to cover any claims arising out
of Future Energy’s contract with Entergy. Roger Creger’s and
Entergy’s beliefs are insufficient to show coverage when there is
no coverage under the policy’s terms. The district court did not
err in finding that the professional services exclusion bars
claims against Roger Creger so that Hermitage did not breach its
duty to defend him.
IV. CONCLUSION
For the foregoing reasons, the district court's denial of
Brewer’s and Goodman’s motion to dismiss and motion for summary
judgment and grant of Hermitage’s motion for summary judgment are
AFFIRMED.