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1325 North Van Buren5/17/2005
Before Fine, Curley and Kessler, JJ.
1325 North Van up, Buren, LLC (1325) appeals from the trial court's grant of: (1) summary judgment in favor of Indiana Insurance Company, on the basis of the economic loss doctrine, dismissing all of 1325's coverage claims against Indiana and negligence claims against T-3 Group, Ltd., and (2) declaratory judgment in favor of Westport Insurance Corporation, dismissing all of 1325's claims against Westport and declaring that Westport has no obligation to defend or indemnify the insured, T-3, against 1325's claims in the matter. 1325 contends that the trial court incorrectly applied the economic loss doctrine to dismiss its negligence claims and erroneously ruled that T-3 had no insurance coverage arising from such claims. In regard to Indiana, 1325 argues that the commercial general liability (CGL) policy provides coverage for the contract claims 1325 asserted against T-3 for property damage and loss of use caused by its subcontractors. Finally, 1325 insists that the trial court erred in declaring that Westport has no obligation to defend or indemnify T-3, under the professional liability policy, in regard to 1325's claims that T-3 inadequately provided professional services, and dismissing 1325's claims against Westport.
Because the economic loss doctrine does not apply in this case, as the relevant agreement was a contract for services, to which the economic loss doctrine is inapplicable under Insurance Co. of North America v. Cease Electric Inc., 2004 WI 139, 276 Wis. 2d 361, 688 N.W.2d 462, we conclude that the trial court erred in dismissing all of 1325's negligence claims against T-3. We also conclude that although 1325's claims trigger coverage under the Indiana policy, there are exclusions in the policy that may preclude coverage, though the extent to which that is the case presents factual issues for determination on remand. With regard to 1325's claims against Westport, we conclude that the professional liability policy does require Westport to defend and indemnify T-3 against 1325's claims concerning T-3's failure to provide adequate professional services. Accordingly, we reverse and remand for further proceedings consistent with this opinion.
I. BACKGROUND
In March 2001, 1325 entered into a contract with T-3 for the purpose of renovating an existing industrial warehouse building into a forty-two unit condominium building with attached parking garages. Essentially, T-3 was to provide professional construction management and administration services and hire subcontractors to renovate the building and complete the project. The contract would have yielded over $6 million dollars to T-3. Pursuant to the agreement, T-3 was to maintain $2 million of commercial general liability coverage for the project. It secured this coverage from Indiana. In addition, T-3 secured professional liability coverage for its construction management services from Westport.
Unfortunately, the construction project did not go as planned. There were numerous accidents and setbacks, and the project did not proceed according to schedule. As a result, 1325 fired T-3 and filed a lawsuit alleging claims in both tort and contract. In its second amended complaint, 1325 alleged several causes of action, against multiple defendants, including: breach of contract; negligence in carrying out professional responsibilities; negligent misrepresentation; intentional misrepresentation; slander of title; failure to indemnify and/or defend against construction liens; theft by contractor; and claims for insurance coverage.
Indiana moved for declaratory and summary judgment on the pleadings, asking the trial court to declare that Ind
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