Where an architectural firm was sued by multiple plaintiffs for bodily injuries and property damage resulting from the collapse in 2003 of a parking garage it designed for the Tropicana Casino Resort in Atlantic City , its commercial general liability (CGL) carriers were held to have no duty to defend against the suits. This is because the professional liability exclusions of the policies were applicable to bar coverage. The fact that the plaintiffs alleged “general negligence” in addition to “professional negligence” did not change the fact that all the allegations arose out of the firm’s professional services as an architect. The professional services exclusion, therefore, applied.
In Wimberly Allison Tong & Goo v. Travelers Property Casualty, ( U.S. , 3rd Cir. 2009), the various complaints included allegations that the architect “failed to perform as a reasonable architect would under the same or similar circumstances.” The complaint also alleged that the defendant “failed to properly design the parking garage, failed to properly supervise the construction of the parking garage, failed to provide proper specifications for the construction… failed to inspect and supervise the worked … and otherwise deviated from the standard of care expected of architects.” A neighboring property owner also filed suit against the architect alleging the architect “unreasonably interfered with the use and enjoyment of the property of the plaintiff.” The factual basis for the allegations, said the court, included “violating construction codes, failure to design, construct, and maintain the garage in a way that would ensure it did not collapse, failure to properly supervise the construction, failure to design and follow proper blue prints, and failure to notice warning signs of a danger of collapse.”
In addition to its professional liability policy and excess professional liability policy, the architect had a CGL policy with Travelers and commercial excess policy with Gulf Underwriters Insurance. Both of the CGL policies contained exclusions for claims arising out of professional services. The exclusion in the Travelers policy, for example, provided: “This insurance does not apply to bodily injury, property damage, personal injury, or advertising injury arising out of the rendering of or failure to render any professional services by you or any engineer, architect or surveyor who is either employed by you or performing work on your behalf in such capacity.”
The principal question at issue was whether the CGL carriers had a duty to defend the suits because allegations went beyond “professional negligence” to theories that might potentially be covered by indemnification. In analyzing this question, the court explained:
“Architectural Professional liability policies and general liability policies are intended to cover different types of risk [citations omitted]. Professional liability policies are intended to cover risks inherent to a particular profession, such as the failure to perform with a standard of skill expected, as opposed to risks that arise as with many types of businesses *** In analyzing whether a professional services exclusion in a general liability policy applies, courts must examine the “character of the [insured’s] conduct” alleged and the “nature of the services” performed by the insured to determine if the insured’s liability “flowed directly” from a professional activity.
As stated by the court, the architect conceded that the exclusions were valid and applicable to the underlying professional malpractice claim. The architect argued, however, that because the complaints included personal injury, wrongful death, public and private nuisance, bystander emotional distress, and loss of consortium, those aspects of the complaint could be covered and the carrier therefore had a duty to defend the suits at least as to those aspects. In rejecting that argument, the court concluded as follows:
The bottom line here is that all of the allegations against [Architect] arose out of [Architect’s] professional services as an architect. [Architect’s] only involvement with the garage collapse, which is the basis of the underlying suits, is that they had an Owner-Architect agreement with Tropicana and were performing as an architectural firm in accordance with that contract. Plaintiffs have not pointed to any allegations of [Architect’s] conduct that were unrelated to [Architect’s] professional architectural services. … [I]t is clear that the “character” of [Architect’s] “conduct” at issue was professional in “nature” and that therefore [Architect’s] potential liability “flowed directly” from a professional activity, namely architecture.
For these reasons, the court found the trial court correctly concluded that all of the architect’s actions and failures alleged in the underlying complaints flowed from its professional role as an architect – making the professional services exclusion in the two CGL policies applicable.
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