An architectural firm was sued for the improper design of a performing arts center in Louisiana and the Fifth Circuit Court of Appeals found that the firm’s insurer owed no coverage.
The architectural firm entered into a design contract with a Louisiana Parish, for the design of a performing arts center. The Parish sued the firm for defective design, asserting breach of warranty, negligence and lack of professional skill as the Parish experienced problems when the project was being constructed. The Parish alleged that the firm prepared a defective set of plans, failed to coordinate with consultants, failed to design the center accurately and under-designed the project.
The district court found that the insurer owed no duty to defend and this appeal to the Fifth Circuit followed. The firm argued that a professional-liability exclusion in the policy issued by the general liability insurer did not unambiguously exclude coverage. The firm also argued that there was nothing else in the policy that excluded coverage and therefore the insurer owed a defense.
The court found that the professional liability exclusion unambiguously excluded coverage. The court noted that all of the factual allegations in the underlying complaint pertained to the rendering of professional architectural services. The court noted the firm was hired for its expertise, and it is not far-reaching to find that all of the services it rendered in connection with the performing arts center project were professional in nature. There was no ordinary claim for negligence involved.
Wisznia Company, Inc. v. General Star Indemnity Company
United States Court of Appeals for the Fifth Circuit
July 16, 2014