The opinion of the court was delivered by: BY THE COURT; JAMES T. GILES
I. BACKGROUND AND PROCEDURAL HISTORY
In April of 1985, L. Robert Kimball and Associates ("Kimball") entered into an Engineering Agreement with the Commonwealth of Pennsylvania, Department of Transportation ("PennDOT") to provide certain inspection services for the Schuylkill Expressway construction project. Soon after the project began, one worker was killed and another injured on the job site when a crane came into contact with an overhead power line.
As a result of this accident, lawsuits were brought in the Philadelphia County Court of Common Pleas against Kimball, PennDOT, and numerous other parties who allegedly played some role in the accident. Kimball eventually settled the cases for nearly one million dollars. Kimball was insured by both CNA and Hartford, and each insurer paid half of the defense costs throughout the litigation. However, Hartford refused to pay any of the settlement. CNA paid the bulk of the settlement, and now seeks indemnification from Hartford.
Hartford argues that the reason it did not contribute to the settlement of the underlying lawsuits, and the reason that it should not be required to indemnify CNA, is that the loss in the underlying lawsuits was not covered by its policy.
The CNA and Hartford policies insured Kimball against different types of losses. Kimball had a "professional liability" policy with CNA and a "comprehensive business" policy with Hartford. The CNA professional liability policy protected Kimball from personal injury claims arising out of its performance or failure to perform professional services. See Hartford Exhibit G. The Hartford comprehensive business policy covered all personal injury claims against Kimball. However, the Hartford policy carries the following endorsement excluding coverage for losses arising from professional services:
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 named insured, including:
1. the preparation or approval of maps, plans, opinions, reports, surveys, designs or specifications and
2. supervisory, inspection or engineering services.
Hartford Exhibit D (emphasis in original).
If the source of potential liability in the underlying lawsuits was Kimball's failure to render appropriate professional services, CNA's policy covers the loss, Hartford's policy excludes coverage, and Hartford need not indemnify CNA. However, if potential liability arose from Kimball's breach of a duty to perform general, non-professional services, Hartford must indemnify CNA unless some other part of its policy with Kimball excludes coverage for the loss. See Cooper Laboratories v. International Surplus Lines, 802 F.2d 667, 673-74 (3d Cir. 1980) (when underlying lawsuit settles without finding of liability, and dispute over insurance coverage arises thereafter, court must use available evidence to determine basis for liability).
Hartford has moved for summary judgment against CNA's indemnification claim. Hartford argues that the material facts are undisputed and require the court to find as a matter of law that the losses in the underlying lawsuits arose from Kimball's breach of a duty to render appropriate professional services. Because Hartford's policy excluded professional services from its coverage, Hartford contends that summary judgment must be entered in its favor. The court agrees that there are no genuine issues of material fact. However, the undisputed facts do not command judgment as a matter of law in Hartford's favor. Therefore, Hartford's motion must be denied. See Fed.R.Civ.P. 56.
Federal Rule of Civil Procedure 56 requires that summary judgment be entered in favor of the moving party when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the ...