NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 19-2462

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NAVIGATORS SPECIALTY INSURANCE COMPANY,

 Appellant

v.

INVENTIV HEALTH CLINICAL, INC., f/k/a PHARMANET DEVELOPMENT 

GROUP, INC.; INVENTIV CLINICAL, LLC, f/k/a PHARMANET, LLC

v.

LANDMARK AMERICAN INSURANCE COMPANY

______________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil No. 3-15-cv-06285)

District Judge: Honorable Peter G. Sheridan

______________

Submitted under Third Circuit L.A.R. 34.1(a)

July 1, 2020

____________

Before: GREENAWAY, JR., SHWARTZ, and RENDELL, Circuit Judges.

(Opinion Filed: September 8, 2020)

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OPINION∗

______________

∗ This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does 

not constitute binding precedent.
2

GREENAWAY, JR., Circuit Judge.

Despite its contentions to the contrary, Plaintiff-Appellant Navigators Specialty 

Insurance Company (“Navigators”) had a duty to defend Defendants-Appellees inVentiv 

Health Clinical, Inc. and inVentiv Clinical, LLC, f/k/a PharmaNet Development Group, 

Inc. and PharmaNet, LLC (collectively “PharmaNet”) in an underlying arbitration dispute

(the “Underlying Arbitration”) based on the terms of a professional services liability 

policy PharmaNet had purchased from Navigators. For the reasons provided below, we 

will affirm the District Court’s Order entered on June 18, 2019.1

I. FACTUAL AND PROCEDURAL BACKGROUND

There are three key aspects to this appeal: (1) the insurance policy (the “Policy”) 

purchased by PharmaNet from Navigators, (2) the claims made by CEL-SCI Corporation 

(“CEL-SCI”) against PharmaNet in the Underlying Arbitration,2 and (3) Navigators’s 

assertion, after a professional malpractice claim was dismissed from the Underlying 

1 The District Court’s Order, dated June 17, 2019 and entered on June 18, 2019, 

CM/ECF No. 105, made final the District Court’s prior: (1) Memorandum and Order 

entered on March 29, 2016 (“March 29 Order”) denying Navigators’s Motion for 

Judgment on the Pleadings and granting PharmaNet’s Motion for Partial Summary 

Judgment on Navigators’s duty to defend PharmaNet in the Underlying Arbitration, see 

CM/ECF No. 29, (2) Order entered on March 1, 2017 (“March 1 Order”) granting 

PharmaNet’s Motion to Enforce Judgment, see CM/ECF No. 69, and (3) Opinion on 

insurance disbursement entered on February 22, 2017 (“February 22 Opinion”), see

CM/ECF No. 72. Navigators thus appeals from the March 29 Order, the March 1 Order, 

and the February 22 Opinion, all of which were finalized by the Order entered on June 

18, 2019. See J.A. 1. 

2 We note at the outset that this case contains partially sealed briefs and records, so 

as to protect arbitration-related materials. See Appellate Dkt. No. 29. To the extent we 

must discuss the claims in the Underlying Arbitration, we will do so in generalized terms.
3

Arbitration, that the remaining claims were barred by an exclusion provision in the 

Policy. 

First, PharmaNet purchased a Life Sciences Products-Completed Operations and 

Professional Services Liability Coverage Policy (i.e., the Policy) from Navigators. The 

Policy provides, in part, “B. Professional Services Coverage,” which reads:

Subject to paragraph C. below, [Navigators] will pay all amounts in 

excess of the deductible up to the limit of liability that [PharmaNet] 

becomes legally obligated to pay as damages as a result of a covered 

professional liability claim by reason of a wrongful act by 

[PharmaNet] or by someone for whom [PharmaNet] is liable. 

In addition, [Navigators] will pay all claim expenses in excess of the 

deductible and up to the limit of liability. Claim expenses are included 

within and erode both the limits of liability and the deductible.

Sealed J.A. 326 (certain emphasis omitted); see also J.A. 19–20.

3

 The Policy also 

contains, in part, an exclusion for “Performance Delay,” which states that 

“Coverage A and B [i.e., Professional Services Coverage] do not apply to any claim 

. . . based on or arising out of delay in delivery of or failure to complete your product 

or your work[.]” Sealed J.A. 331 (emphasis omitted); see also Redacted Appellant’s 

Br. 9. 

Second, PharmaNet was hired by CEL-SCI as a professional contract research 

3 A “[p]rofessional liability claim,” is that which “alleg[es] a wrongful act in the 

rendering or failure to render professional services.” Sealed J.A. 340 (emphasis omitted); 

see also Redacted Appellant Br. 8. A “[w]rongful act” is “any actual or alleged negligent 

act, error or omission in the rendering of professional services by any Insured on your 

behalf.” Sealed J.A. 341 (emphasis omitted); see also Redacted Appellant Br. 8. 

“Professional services” includes that which is set forth in the “Professional Services 

Endorsement,” which includes work as a contract research organization. Sealed J.A. 340, 

364; see also Redacted Appellant Br. 8. 
4

organization to aid with the management and administration of a clinical trial. CEL-SCI 

initiated the Underlying Arbitration against PharmaNet alleging breach of contract, fraud 

in the inducement, and common law fraud, and seeking damages, in part, for failures and 

delays. In an amended statement of claim, CEL-SCI added a claim for professional 

malpractice, however, this claim was ultimately dismissed by the arbitrator as duplicative 

of the breach of contract claim found in the original statement of claim. 

Third, while Navigators initially agreed to defend PharmaNet in the Underlying 

Arbitration, after the professional malpractice claim was dismissed, Navigators 

disclaimed coverage. Navigators argued that the remaining claims were based on delays, 

which fell under the Policy’s exclusion provision. 

Navigators then filed a complaint in the District Court for declaratory relief, 

“seek[ing] a declaration that it has no duty to defend or indemnify PharmaNet in” the 

Underlying Arbitration based on the Policy’s delay exclusion. Sealed J.A. 45. After

PharmaNet filed an answer and counterclaim, and Navigators filed a motion for judgment 

on the pleadings, which PharmaNet opposed, cross-moving for partial summary 

judgment, the District Court granted PharmaNet’s motion for partial summary judgment 

on the duty to defend issue and denied Navigators’s motion for judgment on the 

pleadings.

4

 Once the District Court entered partial final judgment certifying that “the 

4 Additionally, after the District Court’s March 29 Order, PharmaNet filed a 

motion to enforce judgment, which was granted and discussed in the March 1 Order and 

the February 22 Opinion, and finalized in the June 18, 2019 Order. Navigators’s 

appellate briefing is concerned only with whether, as a matter of law, it had a duty to 

defend or whether the exclusion applied. See generally Redacted Appellant Br. 21–22. 
5

parties’ claims regarding Navigators’ duty to defend [PharmaNet] in the underlying 

arbitration have been fully and finally adjudicated on the merits by way of the following 

Orders[,]” J.A. 3–4, Navigators filed a timely notice of appeal.5

II. JURISDICTION AND STANDARD OF REVIEW

The District Court had jurisdiction pursuant to 28 U.S.C. § 1332, and we have 

jurisdiction pursuant to § 1291. We review both a district court’s grant of summary 

judgment ruling and its denial of judgment on the pleadings de novo. See, e.g., Dwyer v. 

Cappell, 762 F.3d 275, 279 (3d Cir. 2014); Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 

219 (3d Cir. 2005). A grant of summary judgment is appropriate when “the movant 

shows that there is no genuine dispute as to any material fact and the movant is entitled to 

judgment as a matter of law.” Dwyer, 762 F.3d at 279 (quoting Fed. R. Civ. P. 56(a)). A 

motion for judgment on the pleadings “will not be granted unless the movant clearly 

establishes there are no material issues of fact, and he is entitled to judgment as a matter 

of law.” Sikirica, 416 F.3d at 220. “Interpretation of an insurance policy is a question of 

law,” which we review de novo. Id. 

III. ANALYSIS

The District Court was correct in finding that, as a matter of law, Navigators had a 

duty to defend PharmaNet in the Underlying Arbitration, as at least some of CEL-SCI’s 

damages claims were predicated on performance failures, existing separate and apart 

5 Though Landmark American Insurance Company appears on the case caption, 

the company was dismissed as a defendant from this case on May 2, 2019. See CM/ECF 

No. 103. 
6

from delays, such that the Policy’s delay exclusion did not exempt Navigators from its 

duty to defend (i.e., there were allegations made by CEL-SCI that were covered and not 

excluded by the Policy). 

As the District Court noted, “New Jersey law controls in this case,” J.A. 9, and 

under New Jersey law, an insurance company has a duty to defend when an underlying 

complaint against the insured “states a claim constituting a risk insured against.” 

Voorhees v. Preferred Mut. Ins. Co., 607 A.2d 1255, 1259 (N.J. 1992) (citation omitted). 

The duty to defend is “determined by comparing the allegations in the complaint with the 

language of the policy . . . [and it] arises, irrespective of the claim’s actual merit. If the 

complaint is ambiguous, doubts should be resolved in favor of the insured and thus in 

favor of coverage.” Id. (internal citation omitted); see also Abouzaid v. Mansard

Gardens Assocs., LLC, 23 A.3d 338, 346 (N.J. 2011) (“As a practical matter, the 

determination of an insurer’s duty to defend requires review of the complaint with 

liberality to ascertain whether the insurer will be obligated to indemnify the insured if the 

allegations are sustained” (citation and internal quotation marks omitted)). If a complaint 

contains multiple alternative causes of action, “the duty to defend will continue until 

every covered claim is eliminated.” Voorhees, 607 A.2d at 1259; see also Hofing v. CNA

Ins. Cos., 588 A.2d 864, 867–68 (N.J. Super. Ct. App. Div. 1991) (“If the pleadings state 

facts bringing the injury within the coverage of the policy, the insurer must defend 

regardless of the insured’s ultimate liability to the complainant. . . . The nature of the 

damage claim . . . determines whether the insurer is obliged to defend.”). 

Here, in the Underlying Arbitration, CEL-SCI’s statement of claim and amended 
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statement of claim contained multiple allegations. Though Navigators believes the 

allegations of failures alleged by CEL-SCI “were inseparable from PharmaNet’s delays 

and its ultimate failure to complete,” Redacted Appellant Br. 11, we disagree. The delays 

and failures alleged by CEL-SCI are not all inexorably intertwined, indeed, there are

instances where CEL-SCI alleged failures by PharmaNet that appear to exist separate and 

apart from allegations of delays and the failure to complete. See, e.g., Voorhees, 607 

A.2d at 1259 (resolving ambiguities and doubts in a complaint in favor of the insured). 

As such, the claims made by CEL-SCI can be read as including references to both delays 

and failures that exist separately from one another. See, e.g., Sealed J.A. 140–141 ¶¶ 15-

16, 155 ¶ 68, 218 § IX, 237 ¶ 369, 248 ¶ 416; but see, e.g., Sealed 254 ¶ 434. Further, 

though one of CEL-SCI’s claims was dismissed—a claim for professional malpractice—

it was noted as being essentially duplicative of allegations that remained. See Sealed J.A. 

451. Thus, having considered the underlying allegations by CEL-SCI, and finding that 

there were claims related to performance failures, existing separate and apart from the 

delays—i.e., not just existing as but-for causation for the delays, see, e.g., Robert W. 

Hayman, Inc. v. Acme Carriers, Inc., 696 A.2d 1125, 1127–29 (N.J. Super. Ct. App. Div. 

1997)—we turn to the Policy itself to see if any claims are covered. 

The Policy provides coverage for “wrongful act[s],” Sealed J.A. 326 (emphasis 

omitted), defined as “actual or alleged negligent act[s], error[s] or omission[s] in the 

rendering of professional services,” Sealed J.A. 341 (emphasis omitted), i.e., services 

performed by PharmaNet in its role as a contract research organization. See Sealed J.A. 

340, 364. This language is plain and unambiguous. See Voorhees, 607 A.2d at 1260. 
8

The Policy also includes an exclusion barring coverage for professional liability claims 

due to wrongful acts “based on or arising out of delay in delivery of or failure to 

complete your product or your work[.]” Sealed J.A. 331 (emphasis omitted). This 

exclusion is likewise clear, exempting Navigators from having to provide coverage for 

wrongful acts “based on or arising out of” PharmaNet’s potential delays or failure to 

complete. Id.; see also Princeton Ins. Co. v. Chunmuang, 698 A.2d 9, 17 (N.J. 1997) 

(explaining that exclusions are also “given effect if specific, plain, clear, prominent, and 

not contrary to public policy” (citation and internal quotation marks omitted)). 

Navigators thus argues that this delay exclusion exempts it from defending 

PharmaNet in the Underlying Arbitration because the underlying claims were based on or 

arose out of a delay or failure to complete. Though “[t]he phrase ‘arising out of’ has been 

defined broadly in other insurance coverage decisions to mean conduct ‘originating 

from,’ ‘growing out of’ or having a ‘substantial nexus’ with the activity for which 

coverage is provided,” Princeton Ins. Co., 698 A.2d at 16 (citation omitted), “exclusions 

must be narrowly construed,” and “the burden is on the insurer to bring the case within 

the exclusion,” id. at 16–17. See also S.T. Hudson Eng’rs, Inc. v. Pa. Nat. Mut. Cas. Co., 

909 A.2d 1156, 1163 (N.J. Super. Ct. App. Div. 2006) (noting that the burden is on the 

insured to show a claim falls under a policy). Here, it is evident that at least some of 

CEL-SCI’s claims are related to PharmaNet’s alleged delays. See J.A. 10 (referencing 

and providing examples of CEL-SCI’s claims that detail alleged delays). Indeed, there 

are instances where CEL-SCI’s claims could reasonably be read as suggesting delays 

arising from PharmaNet’s mismanagement. See, e.g., Sealed J.A. 249 ¶ 418, 251 ¶ 424, 
9

252 ¶ 429, 254 ¶ 434. However, there are also claims that purely allege failures to 

perform tasks as required by the contract. See, e.g., Sealed J.A. 252 ¶¶ 427, 428, 253 ¶¶ 

430, 431. 

Thus, given the ambiguities in the complaint—namely, whether CEL-SCI sought 

damages due solely to delays, for delays caused by wrongful acts, or for both wrongful 

acts and delays—it was correct of the District Court pursuant to New Jersey law to read 

the complaint liberally in favor of PharmaNet. See J.A. 11–12 (citing the Amended 

Statement of Claim, ¶ 416, which mentions “delays and failures” (emphasis added)); see 

also Abouzaid, 23 A.3d at 346; Voorhees, 607 A.2d at 1259. 

CEL-SCI’s allegations and claims include, at the very least, both claims of delays 

and claims of failures, which can be read independently at times. See, e.g., Salem Grp. v. 

Oliver, 607 A.2d 138, 140 (N.J. 1992) (holding that when a complaint can be read as 

alleging concurrent causation, the insurer “must honor its duty to defend”). Thus, while 

the Policy contained a valid exclusion, Princeton Ins., 698 A.2d at 17, there were 

underlying claims that did not fall into the Policy’s exclusion and remain covered under 

the Policy, Voorhees, 607 A.2d at 1259, such that Navigators had a duty to defend.6

IV. CONCLUSION

For the reasons set forth above, we will affirm the Order entered by the District 

Court on June 18, 2019, which finalized two prior orders and one oral decision, from 

6 Having found that Navigators had a duty to defend, we need not reach the 

question of whether the Policy’s exclusion was illusory. See, e.g., Redacted Appellant 

Br. 41. 
10

March 29, 2016, March 1, 2017, and February 22, 2017.