Cochran v. B J Services Co USA ( 2002 )

REVISED SEPTEMBER 24, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 01-30640
_____________________
CORY DALTON COCHRAN
Plaintiff - Appellant
v.
B J SERVICES CO USA; ET AL
Defendants
DRILLMARK CONSULTING INC
Defendant - Appellant
NABORS DRILLING USA INC
Defendant-Intervenor Plaintiff - Appellant
v.
MID-CONTINENT GROUP
Defendant - Appellee
_________________________________________________________________
Appeals from the United States District Court
for the Western District of Louisiana
_________________________________________________________________
August 16, 2002
Before KING, Chief Judge, and HIGGINBOTHAM and EMILIO M. GARZA,
Circuit Judges.
KING, Chief Judge:
Plaintiff-Appellant Cory Cochran sought recovery on his
personal injury negligence suit under an insurance policy issued
to Defendant-Appellant Drillmark Consulting, Inc. by Defendant-
Appellee Mid-Continent Group. Cochran appeals the district
court's summary judgment in favor of the insurance company. For
the following reasons, we REVERSE and REMAND.
I. FACTUAL AND PROCEDURAL HISTORY
Defendant-Appellant Drillmark Consulting, Inc.
("Drillmark"), Defendant-Appellant Nabors Drilling USA, Inc.
("Nabors"), and Defendant B.J. Services Co. U.S.A. ("B.J.
Services") all contracted with Union Pacific Resources Company
("UPR") to perform various functions on an oil drilling
operation. Defendant-Appellee Mid-Continent Group ("Mid-
Continent") contracted with Drillmark to provide insurance for
some of Drillmark’s obligations arising from the UPR drilling
operation. Drillmark contracted with UPR to supervise the UPR
site overall and to report back to UPR regarding the work of
other contractors. Drillmark assigned Roy Springfield to be the
overall supervisor on the UPR site. In the vernacular of
drilling operations, Springfield was the “company man.”
On July 5, 1997, Plaintiff-Appellant, Cory Cochran, a
derrick hand employed by Nabors, was injured while removing a
cement head owned by B.J. Services from the head’s casing on top
of the drilling rig. Cochran filed a personal injury suit
alleging negligence against, inter alia, B.J. Services, Nabors,
UPR, and Drillmark. Drillmark supervisor Springfield was not
2
present at the scene of Cochran's accident with the cement head.
Cochran alleged that Springfield's absence constituted a failure
to supervise by Drillmark that caused Cochran's injury.
Cochran later added Mid-Continent as a defendant, seeking
recovery from the insurer pursuant to the insurance contract
between Mid-Continent and Drillmark, which contract provided for
defense and indemnification of Drillmark by Mid-Continent for any
covered obligations.1 Mid-Continent denied Drillmark coverage
for obligations arising from Cochran’s suit based on a provision
within the Mid-Continent-Drillmark policy that excludes coverage
for any obligations arising due to Drillmark furnishing
“professional services” on the UPR operation. On June 19, 2000,
1
UPR, Drillmark, and Mid-Continent were added as
defendants in amended complaints. A Mid-Continent subsidiary,
Mid-Continent Casualty Company, was the Mid-Continent entity
originally added as a defendant.
The parties are not clear as to whether only indemnification
or also defense is the subject of this appeal. Cochran's amended
complaint naming Drillmark as a defendant appears to pray for
both indemnification and defense by requesting "all damages to
which [Cochran] is entitled to receive ... from the date of
judicial demand and for all costs of these proceedings .... and
for all general and equitable relief." The insurance policy
issued by Mid-Continent entitles insured Drillmark to "those sums
that the insured becomes legally obligated to pay as damages
because of 'bodily injury'" and provides for Mid-Continent's
"right and duty to defend the insured against any 'suit' seeking
those damages." Mid-Continent asserts that defense is not a
subject of this appeal, only indemnification, and that Mid-
Continent is already providing defense. The record on appeal and
the district court's decision fail to clarify this point.
Because the only issue we determine on appeal is that the
exclusion at issue here does not, as a matter of law, apply to
exclude coverage by Mid-Continent in this case, any issue with
respect to the duty to defend is not material to our
determination on appeal.
3
Mid-Continent moved for summary judgment claiming no liability
under the policy it issued to Drillmark. On August 9, 2000,
based on the district court’s finding that the professional
services exclusion applied to Drillmark’s alleged failure to
supervise removal of the cement head, the district court granted
summary judgment in favor of insurer Mid-Continent. Cochran,
Nabors, and Drillmark (collectively, the "Appellants") timely
appeal that summary judgment.2
II. STANDARD OF REVIEW
This court reviews summary judgment de novo, applying the
same standards as the district court. Chaney v. New Orleans Pub.
Facility Mgmt., Inc., 179 F.3d 164, 167 (5th Cir. 1999). Summary
judgment is appropriate when there is no genuine issue as to any
material fact, and the moving party is entitled to judgment as a
matter of law. FED. R. CIV. P. 56(c).
III. MID-CONTINENT'S OBLIGATION TO PROVIDE COVERAGE TO DRILLMARK
The district court applied Louisiana law to hold that the
professional services exclusion provision in the Mid-Continent-
Drillmark insurance contract released Mid-Continent from any
insurance liability arising from Cochran’s suit as a matter of
law.3 In deciding cases governed by state law, we are bound by
2
B.J. Services does not appeal the summary judgment.
3
Defendant-Appellant Drillmark argues in the alternative
that the district court erred in applying Louisiana law and that
Texas law governs this case so that, under Texas law, Mid-
4
applicable decisions of the state's highest court. See, e.g.,
Gaia Techs. Inc. v. Recycled Prods. Corp., 175 F.3d 365, 375 n.11
(5th Cir. 1999) (citation omitted). The Louisiana Supreme Court
has yet to interpret the scope of the precise type of
professional services exclusion provision implicated in this case
in like circumstances. In the absence of a decision on point by
the Louisiana Supreme Court, we must ascertain how that court
would rule if faced with the interpretation of the scope of the
Mid-Continent-Drillmark provision. See id. To accomplish that
task, we may look for guidance from decisions by Louisiana
intermediate appellate courts, see id., and decisions by federal
courts applying Louisiana law. See State Farm Mut. Auto. Ins.
Co. v. Coviello, 233 F.3d 710, 713 (3d Cir. 2000) (citation
omitted); Meridian Mut. Ins. Co. v. Kellman, 197 F.3d 1178, 1181
(6th Cir. 1999) (citation omitted).
The professional services exclusion provision within the
Mid-Continent-Drillmark insurance contract reads in relevant
part:
Continent owes coverage to Drillmark. Drillmark makes this
argument for the first time on appeal, and thus we are entitled
to disregard it on that ground alone. See, e.g., Employers Ins.
of Wausau v. Occidental Petroleum Corp., 978 F.2d 1422, 1430 n.8
(5th Cir. 1993) (A “party has an obligation to call the
applicability of another [forum’s] law to the court’s attention
in time to be properly considered.”) (quotation omitted).
Moreover, because we agree with Drillmark's asserted
interpretation of its contract with Mid-Continent under Louisiana
law, we find it unnecessary to address this argument.
5
EXCLUSION - ENGINEERS, ARCHITECTS OR SURVEYORS
PROFESSIONAL LIABILITY .... This insurance does not
apply to "bodily injury", "property damage" ... arising
out of the rendering of or failure to render any
professional services by [Drillmark] or any engineer,
architect or surveyor who is either employed by
[Drillmark] or performing work on [Drillmark's] behalf
in such capacity. Professional services include: 1.
The preparing, approving, or failure to prepare or
approve maps, shop drawings, opinions, reports,
surveys, field orders, change orders or drawings and
specifications; and 2. Supervisory, inspection,
architectural, or engineering activities.
(emphasis added). As one Louisiana appellate court recently
reiterated, such exclusion provisions are common to so-called
commercial or comprehensive general liability insurance contracts
(known as "CGL" insurance) such as the contract between Mid-
Continent and Drillmark. See Smith v. Travelers Prop. Cas.,
35,695 (La. App. 2 Cir. 2/27/02), 811 So. 2d 1097, 1101. Such
provisions reflect the fact that insured professionals, such as
engineers, on drilling operations for example, ordinarily carry
special insurance separate from the CGL policy to cover
obligations arising from the rendering of professional services.
See id. (citing McCarthy v. Berman, 95-1456 (La. 2/28/96), 668
So. 2d 721).
As the Appellants correctly point out, the district court
erred by stating that courts applying Louisiana law construe
these exclusion provisions "broadly." Rather, it is well-settled
Louisiana law that all insurance contract exclusion provisions
are construed "'strictly ... against the insurer, and any
6
ambiguity is construed in favor of the insured.'" Id. at 1100
(quoting Ledbetter v. Concord Gen. Corp., 95-0809 (La. 1/6/96),
665 So. 2d 1166, 1169) (internal citation omitted). "However, the
rule of strict construction does not authorize a perversion of
language, or the exercise of inventive powers for the purpose of
creating an ambiguity where none exists." Id. at 1100-01
(quoting Ledbetter, 665 So. 2d at 1169) (internal quotation and
citation omitted). It is also well-settled Louisiana law that
the insurance provider has the burden of proving that an
exclusion unambiguously applies. See, e.g., Arnette v. NPC
Servs., Inc., 2000-1776 (La. App. 1 Cir. 2/15/02), 808 So. 2d 798,
802 (citing Gaylord Chem. Corp. v. ProPump, Inc., 98-2367 (La.
App. 1 Cir. 2/18/00), 753 So. 2d 349, 352). Moreover, "[s]ummary
judgment declaring a lack of coverage under an insurance policy
may not be rendered unless there is no reasonable interpretation
of the policy, when applied to the undisputed material facts
shown by the evidence supporting the motion, under which coverage
could be afforded." Smith, 811 So. 2d at 1100 (citing Reynolds v.
Select Props., Ltd., 93-1480 (La. 4/11/94), 634 So. 2d 1180).
Consequently, contrary to the district court’s portrayal,
Louisiana law places a heavy burden on Mid-Continent when that
insurer seeks to exclude insureds from coverage via the type of
professional services provision at issue in this case, especially
on motion for summary judgment.
7
This court has at least twice interpreted the scope of
professional service exclusion provisions in insurance contracts,
which provisions were materially indistinguishable from the Mid-
Continent-Drillmark provision, with contrasting results. See
Natural Gas Pipeline Co. of Am. v. Odom Offshore Surveys, Inc.,
889 F.2d 633, 636 (5th Cir. 1989) (finding in favor of an
insurance company under Louisiana law that a professional
services exclusion provision excluded coverage for obligations
arising due to allegedly negligent anchor placement by a surveyor
on a pipeline operation); Thermo Terratech v. GDC Enviro-
Solutions, Inc., 265 F.3d 329, 337 (5th Cir. 2001) (finding in
favor of insureds under Louisiana law that a professional
services exclusion provision did not exclude coverage for
obligations arising due to allegedly negligent removal of a part
within a hazardous waste incinerator by the employee of an
incinerator design contractor). The district court in this case
relied upon our decision in Odom to interpret the meaning of the
term "supervisory" -- as it appears in the Mid-Continent-
Drillmark exclusion provision -- to include the allegedly
negligent action by Drillmark that gave rise to Cochran's suit,
specifically failure to supervise removal of the cement head.
The district court thus concluded that the provision excluded
coverage for any failure by Drillmark to supervise cement head
removal. Close examination of Odom, along with our more recent
decision in Thermo Terratech, however, indicates that the
8
district court's interpretation of the scope of the instant
exclusion provision is flawed.
In Odom, an insured surveyor contractor was hired to survey
a pipeline project and to guide a dive vessel during anchoring
operations. 889 F.2d at 634. After an anchor injured the
pipeline, the surveyor contractor was sued for negligence. Id.
The surveyor’s CGL insurance policy included the following
professional services exclusion provision, which provision is
analogous to the Mid-Continent-Drillmark provision:
This insurance does not apply: ... if the insured is an
architect, engineer or surveyor, to bodily injury or
property damage arising out of professional services
performed by such insured, including ... the
preparation or approval of maps, drawings, opinions,
reports, surveys, change orders, designs, or
specifications, and ... supervisory, inspection, or
engineering services.
Id. at 635. We rejected an argument that the employees
responsible for negligent anchor placement were merely
navigating, but not surveying, at the time of the accident. See
id. We instead credited testimony that the acts performed were
"generally recognized as surveying services." Id. at 635. We
also credited testimony relied upon by the district court in that
case that the employees of the contractor required training as a
surveyor to operate the necessary equipment and to perform the
allegedly negligent anchor placement tasks. See id.
In Odom, we further cited to a definition of professional
services first set forth by a Louisiana intermediate appellate
9
court in Aker v. Sabatier, 200 So. 2d 94, 97 (La. Ct. App. 1967).
See Odom, 889 F.2d at 636. That definition from Aker states that
"'[p]rofessional services, in its usual connotation, means
services performed by one in the ordinary course of the practice
of his profession, on behalf of another, pursuant to some
agreement, express or implied, and for which it could reasonably
be expected some compensation would be due.'" Id. (quoting Aker,
200 So.2d at 97). Relying on that Aker definition, we
interpreted Louisiana law in Odom to require a court to look to
the nature of the particular service allegedly negligently
provided (or not provided) to determine whether that service was
recognized as a professional service of the type included within
the category of professional services that the contractor agreed
to provide. See 889 F.2d at 636. We also relied on a finding by
the district court that the surveyor had contracted "to provide
both the survey of the ocean floor and the interpretation and
translation of that information into correct anchor placements."
Id. We found, therefore, that the contractor's failure in anchor
placement "easily fall[s] within the 'professional services'
category" of services required under its contract. Id. at 636.
We thus concluded that the provision at issue excluded coverage
for any suit arising from a failure to properly place the anchor.
See id.
In contrast, in our more recent decision Thermo Terratech,
we interpreted a professional services exclusion provision in a
10
CGL policy, which provision likewise is materially
indistinguishable from the Mid-Continent-Drillmark provision, to
find that the provision did not exclude coverage by the insurer.
See 265 F.3d at 335-37. In so doing, we distinguished Odom in a
manner that is instructive in this case. See id. In Thermo
Terratech, an insurer issued a CGL insurance policy to a
hazardous incineration job operator. Id. at 333. The
incineration job operator hired a contractor to "design, develop,
manufacture, and deliver" a portable incinerator to an
incineration plant. Id. at 331. An employee of the design
contractor, an engineer, was assigned to the plant as a "lead
operator[]," and his "primary duty ... was to train the employees
of [the incineration job operator] to operate the incinerator."
Id. At the request of the incineration job operator, the design
contractor employee "disrupted power to the control panel" of the
incinerator to facilitate removal of a speed control driver for
repair. Id. at 332. By doing so, the employee "thereby
disconnect[ed some] recirculat[ion] pumps." Id. A fire in the
incinerator "ensued shortly after the power to the control panel
was disconnected." Id.
Claims were filed against the design contractor to recover
amounts paid in settlement due to the fire based on the allegedly
negligent removal of the driver. Id. at 332. The design
contractor prevailed, and the suit for repayment of fire damages
11
was dismissed.4 The design contractor then filed suit against
the incineration job operator to recover attorney fees and costs
incurred in defending the claims. Id. at 333. As a threshold
matter, we determined that the CGL policy held by the incinerator
operator in Thermo Terratech, which provided for indemnification
and defense to the incinerator operator for obligations arising
from the incineration operation, extended to cover obligations
owed by the design contractor as well. See id. at 335.5
The CGL insurer in Thermo Terratech claimed, however, that
the professional services exclusion provision in the CGL policy
in that case excluded coverage for obligations arising due to the
removal of the incinerator driver. Id. The exclusion provision
4
A district court's finding that the incineration job
operator party to Thermo Terratech owed indemnification to the
design contractor for amounts paid due to the fire, pursuant to
their design and sales contract, was affirmed on appeal in a
separate action in which a third party sought reimbursement for
settlement amounts paid. See 265 F.3d at 333.
5
We based that finding on a provision in the Thermo
Terratech CGL insurance policy that provided for coverage for
obligations owing due to incidental contracts of the incineration
job operator, the holder of the insurance policy. We determined
that the contract between the incineration job operator and the
design contractor qualified as such an incidental contract so
that coverage was owed due to obligations arising from acts of
employees of the design contractor. See Thermo Terratech, 265
F.3d at 335. Although in the instant case, Drillmark -- as the
party accused of negligence and thus the party situated similarly
to the design contractor in Thermo Terratech -- is the direct
holder of the CGL policy, we find this difference between the
circumstances of Thermo Terratech and the instant case to be of
no material consequence to our determination.
12
in Thermo Terratech, which is materially indistinguishable from
the Mid-Continent-Drillmark provision, reads in relevant part:
It is agreed that the insurance does not apply to
bodily injury or property damage arising out of the
rendering of or the failure to render any professional
services by or for the name insured, including ....
supervisory, inspection or engineering services.
Id. at 333 n.8.
In reversing summary judgment that was granted in favor of
the insurer, we noted that under Louisiana law, where an
insurance exclusion is susceptible to more than one reasonable
interpretation, a court "must adopt the interpretation that
provides coverage to the insured." Id. at 334-35 (citing Talley
v. Blue Cross Blue Shield of La., 99-1974 (La. App. 3 Cir.
5/3/00), 760 So. 2d 1193, 1195). We further cited to the same
Aker definition of professional services relied upon by the
district court in this case. See id. at 335-36 (quoting Aker,
200 So. 2d at 94) (internal quotation and citation omitted). We
then reiterated the test we outlined in Odom that was developed
by Louisiana appellate courts for interpretation of the scope of
professional service exclusion provisions such as the Mid-
Continent-Drillmark provision:
To determine whether services are professional in
nature, we look: [t]o the character of the services
performed, such as whether special knowledge and
technical expertise are required, rather than the title
or character of the party performing the services.
Acts which could have been done by an unskilled or
untrained employee are not subject to a professional
services exclusion. Professional services involve
13
discretion acquired by special training and the
exercise of special judgment.
Id. at 336 (internal quotation and citations omitted) (citing Am.
Cas. Co. v. Hartford Ins. Co., 479 So. 2d 577, 579 (La. Ct. App.
1985), which decision in turn notes that the test was first set
forth in D’Antoni v. Sara Mayo Hosp., 144 So. 2d 643, 646 (La. Ct.
App. 1962)). We interpreted this test, along with the Aker
definition, to require that "for the Professional Liability
exclusion to apply [in Thermo Terratech], the fire and resulting
property damage must have arisen from [the negligent employee's]
rendering, or his failure to render, an engineering service."
Id.
We then noted that it was "undisputed" in Thermo Terratech
"that [some] of the [incineration job operator employees], none
of whom were professional engineers, had been trained ... to
assess the incinerator logs and control panel prior to
disconnecting power to the system" so that "several non-engineer
employees had the training necessary to remove the damaged
driver." Id. at 332, 336. We found, therefore, that although
"the actions taken by [the allegedly negligent design contractor
employee] could not have been performed by an individual not
trained to operate the incinerator[,] ... [such] actions ...
could have been performed by individuals who had neither
engineering training, nor the ability to exercise special
judgment unique to the field of engineering." Id. at 336. We
14
thus concluded in Thermo Terratech "that the actions taken by
[the design contractor employee] were not engineering services
and, therefore, fall outside the scope of the Professional
Liability exclusion contained in the CGL policy." Id. (citation
omitted).
In so concluding in Thermo Terratech, we distinguished Odom
on its facts, noting that "there was a substantial amount of
evidence [in Odom] to show that the services being performed,"
specifically anchor placement, "were of the type 'generally
recognized as surveying,'" thus constituting professional
services for the purpose of the exclusion. Id. at 337 (quoting
Odom, 889 F.2d at 635). We then contrasted the circumstance of
Thermo Terratech, reasoning that the "facts show that the actions
taken" in Thermo Terratech "were not required to satisfy the
engineering portion of the [contract] as, at the time the actions
were taken, [the employee] was not in the process of designing,
developing, or otherwise acting within the course of the practice
of his engineering profession on behalf of [the allegedly
negligent contractor]." Id. We therefore found that the
exclusion did not apply and found in favor of the insured. Id.
In absence of contradictory authority from the Louisiana
Supreme Court, we reaffirm our reading of Louisiana law in Odom
and Thermo Terratech indicating that when an allegedly negligent
service performed by a contractor is not of the type recognized
as requiring professional expertise or skill, the type of
15
professional services exclusion provision at issue in the instant
case will not operate to exclude coverage under a CGL policy for
obligations arising from an insured contractor's performance (or
non-performance) of that particular service. We further note
that, contrary to the parties' assertions, although such
information is relevant to this determination, the title or trade
of the insured contractor or its employees, or the contractor's
overall job description, is not the determinative factor in this
inquiry. Rather, it is the nature of the particular service
allegedly negligently performed (or not performed), and whether
that service is recognized as requiring specialized training or
expertise, that determines whether a professional services
exclusion in a CGL policy applies under Louisiana law. See id.
at 335-37; see also Smith, 811 So. 2d at 1101-02 (relying on Odom
to reverse summary judgment to find in favor of an insurer that a
professional services exclusion, which enumerated "consulting
forester" as one of the excluded professional services, excluded
coverage for losses from "identif[ication of] property lines"
because that function was "essential" to the contractor
consulting forester’s business and required specialized training
and tools); Harbor Ins. Co. v. Omni Constr., Inc., 912 F.2d 1520,
1523-25 (D.C. Cir. 1990) (relying on Odom and noting that an
exclusion provision nearly identical to the Mid-Continent-
Drillmark provision "clearly refers to the nature of the service
16
provided, not to the nature of the service provider") (emphasis
added).
We find the instant circumstance is more analogous to that
of Thermo Terratech than of Odom. Thus, as in Thermo Terratech,
we find in favor of the insured Drillmark that the instant
professional services exclusion provision does not release Mid-
Continent as a matter of law from covering Drillmark's
obligations arising from Cochran's suit. Although Drillmark is
described as a consulting engineering firm by trade in its
insurance contract with Mid-Continent, the parties do not dispute
that Drillmark was not hired in its capacity as an engineering
firm per se on the UPR drilling operation to, for example, design
or approve design of any portion of the operation. Rather, it is
undisputed that Drillmark contracted with UPR to be the overall
supervisor of "company operated drilling, completion and workover
activities" and was charged only with monitoring the progress of
other contractors and reporting back to UPR. As we have
previously noted and as the testimony reflects, Springfield was
the "company man"6 on the UPR site. Springfield, whose absence
at the accident Cochran alleges resulted in a failure to
supervise causing Cochran's injury, further testified that he is
6
This court has repeatedly acknowledged the role of
the "well known 'company man'" on drilling operations who
typically "monitor[s] the progress of the work of independent
contractors" and reports back to the principal, such as UPR.
E.g., Zepherin v. Conoco Oil Co., Inc., 884 F.2d 212, 213 (5th
Cir. 1989).
17
a non-engineer with a high school education. Additionally, as
the district court noted, undisputed testimony by Drillmark owner
Dennis Kruse and Springfield indicated that it was not
Drillmark's job to provide, and Springfield did not provide, any
instruction, specialized or otherwise, to contractors on how to
accomplish any particular job, including cement head removal.
Thus, in contrast to the contractors in Odom and Thermo
Terratech, Drillmark did not contract to provide any package of
professional services, such as engineering or surveying, to UPR.7
More importantly, as Mid-Continent points out in its brief to
this court, undisputed testimony by Kruse and Springfield further
indicates that removal of a cement head is a routine task that
does not require specialized instructions, and which ordinarily
is performed by a cementing or drilling crew including, for
example, drillers, derrick hands and roughnecks, which are non-
professionals. It follows that the supervision of (or failure to
supervise) cement head removal likewise does not require
professional engineering expertise or other expertise of a
professional nature. These undisputed facts lead to the
7
Mid-Continent asserts that Springfield's job
description, including such activities as making daily progress
reports, checking mud systems, inspecting equipment, and making
sketches of tools, for example, constituted provision of services
tantamount to professional engineering, albeit non-degreed. Even
assuming without deciding that Mid-Continent is correct, we
nevertheless conclude that the specific service at issue here,
supervision of removal of a cement head, was not specialized or
engineering in nature within the meaning of this exclusion
provision.
18
conclusion, in accord with our decisions in Odom and Thermo
Terratech, that any negligent failure by Drillmark's company man
Springfield to supervise removal of the cement head does not
constitute a failure in the rendering of a professional service
by Drillmark within the meaning of the Mid-Continent-Drillmark
exclusion provision.
We respectfully disagree with the district court's
interpretation of Louisiana law and reliance on this court's
citation to the Aker definition of professional services in Odom
as the basis for that court's conclusion that all supervisory
duties performed (or not performed) by Drillmark on the UPR
drilling operation should qualify as professional services
because the enumeration of excluded services within the exclusion
provision includes the term "supervisory" and because Drillmark
contracted to supervise the UPR site. Rather, we conclude that
the term "supervisory" within the meaning of the instant
exclusion provision excludes coverage only for obligations
arising due to supervision of a professional nature, thus
applying only to supervision requiring a Drillmark employee's
professional or specialized expertise or skill. We further note,
were we to interpret the scope of a professional services
exclusion provision in a CGL policy issued to the company man
charged with overall supervision of a drilling operation as did
the district court, and as Mid-Continent urges, such exclusion
provisions would virtually swallow the entirety of insurance
19
coverage available to a drilling operation company man under a
CGL. We decline the invitation to interpret the scope of a
professional services exclusion provision in that manner. We
thus conclude that Mid-Continent owes coverage to Drillmark as
provided by the terms of their contract, including defense and
indemnification, for all obligations arising from Cochran's
personal injury suit based on alleged failure by Drillmark to
supervise removal of a cement head.
IV. CONCLUSION
For the foregoing reasons, the district court’s summary
judgment in favor of insurer Mid-Continent is REVERSED. We
REMAND this case to the district court for further proceedings
consistent with this decision.
20