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Herzog Contracting Corp. v. Oliver12/19/2001
es coverage for "professional services."
An "Occurrence" Causing "Property Damage"
The policy states that National Standard will pay sums the insured is legally obligated to pay for "property damage" which occurs during the policy period and is caused by an "occurrence:"
We will pay those sums that the insured becomes legally obligated to pay because of "bodily injury " or "property damage" to which this insurance applies.
This insurance applies only to "bodily injury " and "property damage" which occurs during the policy period. The "bodily injury" and "property damage" must be caused by an "occurrence." (Emphasis added).
The policy defines an "occurrence" as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." "Property damage" is defined as:
a. Physical injury to tangible property, including all resulting loss of use of that property; or
b. Loss of use of tangible property that is not physically injured.
GTL's failure to detect environmental pollutants on the property site appears to be an "occurrence" as defined by the policy. In Gaylord Chemical Corporation v. Propump, Inc., 98-2367 (La. App. 1st Cir. 02/18/00), 753 So.2d 349, the defendant gave incorrect information regarding the capabilities of a product it sold to the plaintiff. When the plaintiff sued for breach of contract, the defendant filed a third-party claim against its insurer for coverage under a CGL policy in effect. The insurer claimed there was no coverage because the incident did not constitute an "occurrence." Construing policy language defining "occurrence" identical with that of the instant policy, the court held that "the occurrence of an unforeseen and unexpected loss, whether the result of a defective product or an insured's negligent communication of misleading, incomplete, or incorrect information during the policy period," constitutes an occurrence. Id. at 354. See McKenzie and Johnson, 15 Louisiana Civil Law Treatise; Insurance Law and Practice ยง 183, p. 368 (West 1996). (When "occurrence" is defined as an "accident," whether there has been an occurrence depends on whether there has been an accident, not upon the legal cause or consequence of that accident.). See also, Nelson v. Want Ads of Shreveport, Inc., 31,168 (La. App. 2d Cir. 10/30/98), 720 So.2d 1280. (Accident is defined from the viewpoint of the victim; losses that were unforeseen and unexpected by the victim are the result of an accident.).
In this instance, the policy states that the property damage to which the insurance applies must be caused by an occurrence. Although there was an occurrence, that is, GTL's failure to detect the pollutants, the Maryland Defendants claim that the occurrence did not cause the property damage, that is, the physical injury to the property or physical injury that resulted in a loss of use of the property. They claim that the pollution was already there, that GTL did not pollute the property, and, that GTL simply breached its contract to provide an accurate environmental evaluation. We need not, however, reach this issue.
Professional Services Exclusion
Regardless of whether or not the failure to detect hazardous waste materials by GTL constituted "property damage," the Maryland Defendants argue that the professional services exclusion presents an insurmountable barrier to GTL's claim for coverage. The professional services exclusion in the policy provides:
Description of Professional Services:
(If no entry appears above, information required to complete this endorsement will be shown in the Declarations applica
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