Court Opinion

ID: 2963555
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:11:53.029497+00
Date Added: 2024-06-11T11:42:42.393858
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 94-2004

                                 GRE INSURANCE GROUP 
                      D/B/A ATLAS ASSURANCE COMPANY OF AMERICA,

                                 Plaintiff, Appellee,

                                          v.

                    METROPOLITAN BOSTON HOUSING PARTNERSHIP, INC.,

                                Defendant, Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                    [Hon. Richard G. Stearns, U.S. District Judge]
                                              ___________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
                                       _____________
                      Coffin and Bownes, Senior Circuit Judges.
                                         _____________________

                                 ____________________

            Joseph G.  Blute with whom Jonathan  Z. Pearlson  and Robert Quinn
            ________________           _____________________      ____________
        were on brief for appellant.
            Daniel P.  Carter with  whom Michael  R. Luongo  and Jayne  Conroy
            _________________            __________________      _____________
        were on brief for appellee.

                                 ____________________

                                    July 25, 1995
                                 ____________________

               COFFIN,  Senior  Circuit  Judge.   This  appeal  raises  the
                        ______________________

          question  whether an insurance carrier  has a duty  to defend and

          indemnify  its  insured  against  lawsuits currently  pending  in

          Massachusetts  courts under  two Comprehensive  General Liability

          insurance policies.  The  district court granted summary judgment

          in favor of the carrier, and the insured appeals.  Concluding, on

          the  present state of the  record, that the  carrier must fulfill

          the first of these duties, i.e., the duty to defend the lawsuits,

          we reverse and remand.

                                    I. Background
                                       __________

               Appellee GRE Insurance Group (GRE)  sold the two policies at

          issue here to appellant Metropolitan Boston Housing  Partnership,

          Inc.   (Metropolitan),  and  one  of  its  predecessor  entities,

          Metropolitan Housing, Inc. (MHI).   Metropolitan, like MHI before

          it,   disburses   federal   and  state   housing   subsidies   to

          participating   landlords  and  tenants.1    Metropolitan  issues

          Certificates  of  Participation  to  eligible tenants,  who  then

          search  the private rental housing market.  Once a tenant locates

          a suitable unit,  Metropolitan steps in  and negotiates the  rent

          with the property's landlord.  Metropolitan and the landlord then

          enter into an agreement regarding the payment of  rent subsidies,

          and the tenant  and landlord  sign a lease.   Metropolitan  never

                              
          ____________________

               1  MHI  and  Metropolitan   were  formed  to  privatize  the
          functions  previously  performed   by  the  Metropolitan  Housing
          Assistance  Program  of  the  Massachusetts  Executive  Office of
          Communities and Development.

                                         -2-

          becomes  a  party  to  the  lease,  nor  acquires  any possessory

          interest in the apartments.

               Before  agreeing   to  subsidize  a   particular  apartment,

          Metropolitan inspects the premises to insure that federal Housing

          Quality Standards  are satisfied.   A Metropolitan representative

          visits the  apartment and,  after visual inspection,  completes a

          checklist  confirming  the number  and  types  of rooms,  whether

          sinks, stoves,  and refrigerators  are in working  order, and  so

          forth.  Metropolitan's inspectors never  test for the presence of

          lead  paint.   Instead,  they simply  note  whether the  paint is

          chipped  or peeling,  and whether  the landlord  has a  Letter of

          Compliance from a licensed lead paint inspector attesting to lead

          paint safety.  If no letter is on file, the landlord is told that

          one is required before the subsidy will be given.

               Despite  this rather  limited  role,  Metropolitan has  been

          named  as  a   defendant  or  third   party  defendant  in   five

          Massachusetts state lawsuits alleging personal injury due to lead

          paint exposure  of minors at  Metropolitan-subsidized apartments.

          These suits  assert a number of different  legal theories against

          Metropolitan, many of which  are based on its alleged  failure to

          inspect adequately  for lead  paint before agreeing  to subsidize

          the apartments.

               GRE  filed  this  diversity  action  seeking  a  declaratory

          judgment  that it  had  no  obligation  to  defend  or  indemnify

          Metropolitan against the lawsuits, and the district court granted

          summary judgment in its favor.  Metropolitan now appeals.

                                         -3-

                                     II. Analysis
                                         ________

               We  review de  novo the  district court's  interpretation of
                          ________

          these insurance contracts, St.  Paul Fire and Marine Ins.  Co. v.
                                     ___________________________________

          Warwick  Dyeing Corp., 26 F.3d 1195, 1199 (1st Cir. 1994), guided
          _____________________

          by  several familiar rules of  construction.2  We  begin with the

          actual language of the policies and consider "what an objectively

          reasonable insured, reading the  relevant policy language,  would

          expect to be  covered."   Trustees of Tufts  Univ. v.  Commercial
                                    ________________________     __________

          Union  Ins. Co.,  415 Mass. 844,  849, 616  N.E.2d 68,  72 (1993)
          _______________

          (quoting  Hazen Paper  Co. v. United  States Fidelity  & Guaranty
                    ________________    ___________________________________

          Co., 407 Mass.  689, 700, 555  N.E.2d 576,  583 (1990)).   Absent
          ___

          ambiguity,  we  give  policy  language  its  plain  and  ordinary

          meaning.   E.g., Cody v.  Connecticut General Life  Ins. Co., 387
                     ____  ____     __________________________________

          Mass.  142, 146,  439 N.E.2d  234, 237  (1982).   Ambiguities are

          resolved against  the insurer,  who drafted  the  policy, and  in

          favor  of  the  insured.    Thus,  if  "there  are  two  rational

          interpretations of  policy language,  the insured is  entitled to

          the benefit of the one that is more favorable to it."  Hazen, 407
                                                                 _____

          Mass.  at 700, 555 N.E.2d at 583.   The insured bears the initial

          burden  of proving  that  a  claim  falls  within  the  grant  of

          coverage,  which, once  established, shifts  the burden  onto the

          insurer to show the applicability of any exclusion.  Camp Dresser
                                                               ____________

          & McKee, Inc. v. Home Ins.  Co., 30 Mass. App. Ct. 318, 321,  568
          _____________    ______________

          N.E.2d 631, 633 (1991).

                              
          ____________________

               2 The parties agree that Massachusetts law controls.

                                         -4-

               To determine if  a liability policy  obligates a carrier  to

          defend claims  made against  its insured,  we simply  compare the

          underlying complaint  to the policy;  "if the allegations  of the

          complaint are `reasonably susceptible' of an  interpretation that

          they state or adumbrate a claim  covered by the policy terms, the

          insurer  must undertake the defense."   Liberty Mut.  Ins. Co. v.
                                                  ______________________

          SCA  Services, Inc., 412 Mass. 330, 331-32, 588 N.E.2d 1346, 1347
          ___________________

          (1992)  (quoting Continental Cas.  Co. v. Gilbane  Bldg. Co., 391
                           _____________________    __________________

          Mass. 143, 146,  461 N.E.2d 209, 212  (1984)) (internal quotation

          omitted).   At issue here are two  combined comprehensive general

          liability  and commercial  property insurance  policies.   In the

          Insuring Agreement  of the  general liability coverage  part, GRE

          promised to:

               pay those sums that [Metropolitan] becomes legally obligated
               to pay as damages because of `bodily injury' . .  . to which
               this insurance applies. . . .  The `bodily injury'. . . must
               be caused  by an `occurrence.'   The `occurrence'  must take
               place in the `coverage  territory.'  We will have  the right
               and duty to defend any `suit' seeking those damages.

          There  is no  question that  the terms  `occurrence'  and `bodily

          injury' are defined in such a way as to cover personal injury due

          to  lead paint  exposure,  and that  the  occurrences took  place

          within the relevant  coverage territory.   Thus, unless a  policy

          exclusion  effectively defeats  this  grant of  coverage, GRE  is

          obligated to defend and indemnify the underlying lawsuits against

          Metropolitan.

               The district  court relied upon  two grounds, both  of which

          GRE urges upon us, for holding that there is no  coverage: first,

          that  the  policies  are   restricted  to  liability  arising  at

                                         -5-

          Metropolitan's  home  office;  and second,  that  the  underlying

          claims  fall within  a  policy exclusion  relating to  inspection

          services.  We examine these propositions in turn.

          A.   Was Coverage Limited to Metropolitan's Office?
               _____________________________________________

               GRE argues that the  policy does not apply to  liability for

          claims arising from Metropolitan's  activities away from its home

          office, relying  upon language in the  policy's Declarations form

          and  two  supplemental schedules,  and  upon  the  amount of  the

          premium, which the district court found to be too low conceivably

          to reflect the parties' intent to cover additional risks.   

               As for the policy  language, the "Common Policy Declarations

          Form"  lists certain basic information about  the policy, such as

          the types of  coverage purchased, the  premium for each  coverage

          part, the coverage period, the name, address and type of business

          of the  insured,  the  policy number,  and  so forth.    It  also

          contains the operative  sentence: "In return  for the payment  of

          the premium,  and subject to  all the  terms of  this policy,  we

          agree  with  you  to provide  the  insurance  as  stated in  this

          policy."  GRE seizes on  the fact that the next line of  the form

          calls  for a  "business  description" of  the  insured, which  is

          listed as "office," as evidence that only liability  arising from

          Metropolitan's  office operations was covered.   The flaw in this

          reasoning is that  the question  calls for a  description of  the

          insured's type of business, not the premises or building to which
                    ____

          insurance was to be limited.  The fact that Metropolitan operated

          as  an office, rather than a hockey rink, manufacturing plant, or

                                         -6-

          boarding  house, was obviously relevant to coverage.  But it does

          not show a clear understanding  to restrict coverage to liability

          arising out of Metropolitan's office only.

               A  somewhat closer  question is  presented by  language that

          appears in  the insurance schedules.   The "Comprehensive General

          Liability Coverage  Declarations  Form"  directs  the  reader  to

          "refer to [the] common policy premises schedule for a description

          and location of all  premises owned, rented or controlled  by the

          named insured."  The "Common Policy Premises Schedule," under the

          heading "Premises," lists "434 Massachusetts Avenue, Boston, MA,"

          i.e., the  location of  Metropolitan's office.   Further,  on the

          "Comprehensive    General   Liability    Insurance   Supplemental

          Schedule,"  the "Description of Hazards Classification" is listed

          as "Buildings  or  Premises --  Office,"  and the  "Exposure"  is

          listed   as   "15,000"  square   feet,   roughly   the  area   of

          Metropolitan's  office.   GRE  argues that  this shows  that only

          those risks arising out  of Metropolitan's office activities were

          covered.

               Based  on a recent decision of the Supreme Judicial Court of

          Massachusetts, however,  we cannot agree.   In Trustees  of Tufts
                                                         __________________

          University v.  Commercial Union  Ins. Co., the  insurance carrier
          __________     __________________________

          argued that the failure to include a certain risk on the schedule

          of hazards to a  comprehensive general liability insurance policy

          removed  any coverage  for  that risk.    The SJC  rejected  that

          argument,  holding   simply   that  "nowhere   does  the   policy

          unambiguously provide  that coverage  is limited to  the specific

                                         -7-

          hazards listed in the schedule."  415 Mass. at 856, 616 N.E.2d at

          76.

               In  the instant  case, there  is no  language in  the policy

          clearly indicating that liability  insurance is limited to claims

          arising from occurrences at the premises listed  on the schedules

          from  which we  have  quoted.3   This absence  is made  even more

          probative  when compared to the presence of such language on both

          the  coverage grant description and the declarations form for the

          property coverage  part of the policy.   The grant of coverage on
          ________

          the property part states  that: "We will pay for  direct physical

          loss of or damage  to Covered Property at the  premises described
                                                 __________________________

          in the Declarations caused by or resulting from any Covered Cause
          ___________________

          of Loss" (emphasis added).  The property declarations form, under

          the  heading "Coverages  Provided,"  states  that  the  insurance

          "applies  only to the premises  shown below, and  with respect to

          those premises, only for the coverages, causes of loss and limits

          shown."    By reference  to  the  common  premises schedule,  the

          "premises  shown  below" is  Metropolitan's  office  space.   The

          failure  to  include  such  language anywhere  in  the  liability
                                                                  _________

          coverage  part, under  Tufts, is  fatal to  GRE's claim  that its
                                 _____

          comprehensive liability  insurance was converted into a premises-

                              
          ____________________

               3  We  reject  GRE's  citation  to  the  "products-completed
          operations   hazard"  exclusion  as  a  sufficiently  unambiguous
          statement  of such  a  limitation.   As  GRE recognized  at  oral
          argument, that provision applies  when a completed product causes
          injury  or property  damage  after it  leaves  the hands  of  its
          manufacturer.   It excludes  from coverage liability  that arises
          after an insured's  operations are completed, not, as  here, from
          the insured's operations themselves.

                                         -8-

          only  liability policy simply by listing a certain premise on the

          schedule of hazards.

               Several other considerations support our conclusion that the

          liability  insurance   was   not  limited   to   occurrences   at

          Metropolitan's  office.    First,  for  an  additional   premium,

          Metropolitan  purchased  a  so-called "Broad  Form  Comprehensive

          Liability"  endorsement  for  the   1990-91  policy,  which   was

          incorporated into the 1991-92  policy.  This endorsement expanded

          the  coverage territory to "anywhere in the world with respect to
                                      _____________________

          [injuries]  arising  out  of  the activities  of  [the]  insured"

          (emphasis added).   We find  it quite unlikely  that parties  who

          intended  coverage only  for  activities at  Metropolitan's  home

          office at 434  Massachusetts Avenue in  Boston would have  bought

          and  sold  such  an  endorsement.    Certainly,  an  "objectively

          reasonable insured, reading [this]  policy language, would expect

          to  be covered"  for liability  beyond that  arising at  its home

          office.  Tufts, 415 Mass. at 849, 616 N.E.2d at 72.
                   _____

               Second,  as   part   of  its   application  for   insurance,

          Metropolitan,  through  its  broker,  made a  specific  point  of

          telling  GRE  that it  hired outside  "inspectors"  to go  to the

          apartments  and  determine  whether they  satisfied  the relevant

          federal  standards  so as  to qualify  for  the subsidy.   Having

          received this  information, GRE sold Metropolitan  policies that,

          as  their titles  made clear,  purported to  cover "comprehensive

          general liability."  Thus, absent express  exclusionary language,

                                         -9-

          it was  reasonable for Metropolitan to believe  that its coverage

          included the inspectors' activities.

               Indeed,  as we  find  infra, there  was an  endorsement, the
                                     _____

          professional services exclusion, which may indeed have been added

          in an attempt to exclude from the grant of coverage any liability

          arising  from the  inspectors' activities.   Among  other things,

          that  endorsement  expressly  excluded from  coverage  any claims

          "arising  out  of   the  rendering  or  failure  to   render  any

          professional services  . .  . including  . . .  inspection .  . .

          services."  If coverage were given only to Metropolitan's  office

          activities in the first place, there would have been no reason to

          add this exclusion. 

               The district court  also gave weight to the relatively small

          amount  of   the   premium  as   evidence  that   no  more   than

          Metropolitan's  office activities  were covered.   While  we also

          find the  premium to  be relatively  low, we  do not  believe the

          amount of the premium to be dispositive.  First, if GRE wanted to

          press  this argument  seriously, it  could have  submitted expert

          testimony  regarding  the  premium  amount  here  versus premiums

          charged  for comparable risks.  Instead, on this record, there is

          no  factual basis  whatsoever  upon which  to assess  whether the

          premium is low or high for the covered risks.

               More  importantly, we can  speculate as to  many reasons for

          the  low premium.  GRE may have concluded that Metropolitan faced

          very  little  liability exposure  because  it  was essentially  a

          disbursing agent for government  funds, which, even including the

                                         -10-

          apartment inspections, may  not have been  seen as an  enterprise

          generating large risks.   Or, GRE's calculus of low  exposure may

          have been  influenced by a  Massachusetts statute, Mass.  Gen. L.

          ch. 231   85K, which limits liability of non-profit organizations

          to  a $20,000 per  claim cap.   Or, it could  have calculated the

          premium erroneously, overlooking  the apartment inspection aspect

          of Metropolitan's operations.   Thus, without  a fact finding  on

          the  circumstances  surrounding  premium  calculation   based  on

          competent  evidence, our general view  is that the  amount of the

          premium will  rarely be dispositive in determining  the extent of

          coverage, for such a rule would allow  poor estimates of risk, or

          calculations of risk based  upon mathematical error, to supersede

          the actual coverage to which parties agreed.

               Neither of the cases relied upon by the district court is to

          the  contrary.  In Chesapeake  Physicians Prof. Ass.  v. The Home
                             _________________________________     ________

          Ins. Co., 92  Md. App. 385,  608 A.2d 822  (1992), the court  was
          ________

          faced  with a question similar to ours -- whether a comprehensive

          general liability insurance  policy was in fact  limited to cover

          only certain  premises -- and determined  that it was.   But that

          court's  holding was based upon the fact that the policy language

          itself clearly limited coverage to the premises in question.  The

          "key language" was  the carrier's promise to indemnify and defend

          all  claims "arising out of the ownership, maintenance, or use of
                                                                         __

          the insured premises and all operations incidental thereto."  Id.
          ____________________                                          ___

          at  394, 608  A.2d at 826  (emphasis added).   As  we have noted,

          GRE's  liability policies have a conspicuous lack of such express

                                         -11-

          language limiting coverage to Metropolitan's office.  It is  true

          that  the Chesapeake  court  went  on  to  discuss  a  number  of
                    __________

          considerations that buttressed its decision, one of which was the

          fact, also present in  our case, that the premium  was calculated

          based  on  the  square  footage of  the  properties  and premises

          covered.   But,  as this  was  in the  context of  a policy  that

          unambiguously limited coverage to certain premises by its express

          terms, it  has  little, if  any,  relevance to  interpreting  the

          meaning  of the  instant  policy --  particularly  after the  SJC

          decision in Tufts.
                      _____

               The second case, Rumford Property  and Liability Ins. Co. v.
                                ________________________________________

          Carbone, 590 A.2d  398 (R.I. 1991), is even  less persuasive.  In
          _______

          Rumford, the insurance company had argued that the relatively low
          _______

          premium and the use  of only certain square footage  to calculate

          the  premium showed that only certain premises were covered.  The

          trial  court  rejected that  argument,  a ruling  from  which the
                        ________

          insurance company did not  even appeal.  Instead, the  only issue

          on  appeal  was the  insurance  company's  alleged bad  faith  in

          refusing to provide coverage.   In the context of  resolving that

          issue,  the Supreme  Court of  Rhode Island  stated that  the low

          premium  and the square footage calculation  created "at least an

          arguable  basis  for  denying  coverage."   Since  the  insurance

          company's  contention was "not  a frivolous one,"  its conduct of

          refusing to defend and indemnify, "while certainly not exemplary,

          . . . failed to  reach the level of  bad faith."  Id. at  400-01.
                                                            ___

                                         -12-

          Thus, neither Rumford nor Chesapeake persuade us that the  amount
                        _______     __________

          of the premium is highly probative in this case.

          B.   The Professional Services Exclusion
               ___________________________________

               Each  policy contains  a  professional  services  exclusion,

          which  removes  from  coverage  liability  "arising  out  of  the

          rendering or  failure to render  any professional services  by or

          for you, including .  . . supervisory, inspection  or engineering

          services."    The  district  court found  that  this  endorsement

          "plainly  omits  coverage  for any  inspection  service  (however
                                         ___

          `professional'  it might  be)."  GRE  Ins. Group  v. Metropolitan
                                           _______________     ____________

          Boston Housing Part., Inc.,  No. 93-11727-RGS, slip op. at  6 (D.
          __________________________

          Mass. Aug. 11, 1994).

               We disagree.    By  its own  plain  terms,  the  endorsement

          excludes coverage for a broad category -- professional services -

          - and then specifies  types of excluded professional services  as

          examples.  The  examples themselves  cannot be  broader than  the

          category  they exemplify; they  are nothing more  than subsets of

          "professional  services."    Thus,  only  inspections   that  are

          "professional," as opposed to "nonprofessional," fall within  the

          endorsement.  See Atlantic  Mut. Ins. Co. v. McFadden,  413 Mass.
                        ___ _______________________    ________

          90,  92, 95, 595 N.E.2d  762, 764, 765  (1992) (employing similar

          reasoning  in finding  that lead  paint exposure  was  not within

          pollution exclusion, which defined pollutant as "any contaminant,

          including smoke, vapor,  soot, fumes,  acids, alkalis,  chemicals

          and waste,"  because  of additional  requirement  of  "discharge,

          dispersal, release or escape" of pollutant).

                                         -13-

               In  Roe v. Federal  Ins. Co., 412  Mass. 43, 587  N.E.2d 214
                   ___    _________________

          (1992),  the Supreme  Judicial  Court applied  a formulation  for

          assessing the applicability of a  professional services exclusion

          that  we find instructive in the instant  case.  To be engaged in

          professional services, 

               "[s]omething more  than an act flowing  from mere employment
               or vocation is  essential.  The act or  service must be such
               as  exacts  the use  or application  of special  learning or
               attainments of some  kind.   The term `professional'  . .  .
               means   something  more   than  mere   proficiency  in   the
               performance of a task and implies intellectual skill . . . .
               A  `professional' act  or service  is one  arising out  of a
               vocation,  calling,  occupation,  or   employment  involving
               specialized  knowledge, labor,  or  skill and  the labor  or
               skill  involved  is  predominantly mental  or  intellectual,
               rather  than physical  or  manual. .  .  .   In  determining
               whether a particular act  is . . . a  `professional service'
               we must  look not  to the title  or character  of the  party
               performing the act, but to the act itself." 

          412 Mass. at 48, 587 N.E.2d at 217 (quoting Marx v. Hartford Acc.
                                                      ____    _____________

          &  Indem.  Co., 183  Neb.  12, 13,  157  N.W.2d  870, 872  (1968)
          ______________

          (citations omitted)).  The cases collected in Roe all analyze the
                                                        ___

          applicability of professional  services exclusions by determining

          whether the relevant  activity was "professional" in nature.  See
                                                                        ___

          Harad v. Aetna Cas. & Sur. Co., 839 F.2d 979,  984 (3d Cir. 1988)
          _____    _____________________

          (professional   services   exclusion   applies    to   attorney's

          preparation and filing of pleadings); Curtis Ambulance v. Shawnee
                                                ________________    _______

          County  Bd. of County Comm'rs., 811 F.2d 1371, 1379-84 (10th Cir.
          ______________________________

          1987)  (professional  services  exclusion  applies  to  ambulance

          personnel's provision  of emergency  medical  services); Bank  of
                                                                   ________

          California,  N.A. v. Opie, 663  F.2d 977, 981-82  (9th Cir. 1981)
          _________________    ____

          (professional  services exclusion  applies  to mortgage  broker's

          management of loan proceeds).  Therefore, we reverse the district

                                         -14-

          court's decision  that all inspections were  necessarily excluded

          under  this  endorsement,  and  remand  for  a  determination  of

          whether,  under  Massachusetts  law,   Metropolitan's  inspectors

          performed professional services.

               Even  if   Metropolitan's  inspections  are   found  to   be

          professional in nature, however,  GRE would still have to  defend

          the  underlying lawsuits  --  at least  initially.   This  is  so

          because,   after   reviewing   the   complaints   filed   against

          Metropolitan,  we  find  that  some of  the  claims  raise  legal

          theories of recovery broader  than inadequate inspections.  Taken

          collectively,   the   claims   include    negligence,   negligent

          misrepresentation,  negligently  creating   a  lead  paint  risk,

          failing to require an owner to take corrective action, failing to

          correct  a lead paint  hazard, failure to  obtain certificates of

          compliance with the lead paint law, and breach of contract and/or

          the implied covenant of habitability.

               At  least  on  their  face,  these  claims  are  "reasonably

          susceptible" of  being read to  "state or adumbrate"  claims that

          are beyond  the inspection  services exclusion.   Liberty Mutual,
                                                            ______________

          412 Mass. at 330,  588 N.E.2d at 1347 (quoting  Continental Cas.,
                                                          ________________

          391 Mass. at  146, 461 N.E.2d at 212).   For example, the claimed

          failure  to  correct a  lead paint  risk appears  to rest  on the

          theory  that the very provision of rent subsidies carried with it

          the   responsibility   to  make   whatever   lead   paint  safety

          improvements  were necessary.  Other claims might be based on the

          theory  that the  inspections  were all  perfectly adequate,  but

                                         -15-

          Metropolitan's  follow up  with the landlords  was lacking.   See
                                                                        ___

          Sterilite Corp. v. Continental  Cas. Co., 17 Mass. App.  Ct. 316,
          _______________    _____________________

          318,  458  N.E.2d  338, 341  (1983)  ("[T]he  process  is one  of

          envisaging  what kind of losses may be proved as lying within the
                                          ___

          range  of  the  allegations  of the  complaint,  and  then seeing

          whether  any  such  loss   fits  the  expectation  of  protective

          insurance  reasonably generated  by  the terms  of the  policy.")

          (emphasis  added); cf.  Complaint of  Stone Petroleum  Corp., 961
                             ___  ____________________________________

          F.2d 90,  91-92 (5th Cir.  1992) (general liability  insurer must

          defend  suits  because   they  contain  claims  that,   liberally

          construed, are  beyond the professional services  exclusion).  We

          express  no view  on whether  such expansive  theories ultimately

          will be successful against Metropolitan, and thus GRE.4 

               Therefore, because certain of the claims are  not within the

          professional services  exclusion, GRE is obligated  to defend the

          underlying  suits  notwithstanding the  possibility  that certain

          other claims might be found to be excluded.  See Camp Dresser, 30
                                                       ___ ____________

          Mass. App.  Ct. at  323, 568  N.E.2d at 634  (imposing a  duty to

          defend despite  the fact that "many of  the complaint allegations

          fell within the exclusion"); see also Aetna Cas. & Surety  Co. v.
                                       ___ ____ ________________________

          Continental Cas. Co., 413 Mass. 730,  732 n.1, 604 N.E.2d 30,  32
          ____________________

          n.1  (1992) (noting that "the weight of authority places the duty

          to defend all  counts on an insurer which has a duty to defend at

          least one  count of  a complaint").   As  the Camp Dresser  court
                                                        ____________
                              
          ____________________

               4 Nor need  we, for GRE  agreed to defend  suits within  the
          grant  of coverage  "even  if the  allegations  of the  suit  are
          groundless, false or fraudulent." 

                                         -16-

          indicated, an insurer in this position may "undertake the defense

          of  the  underlying action  with  a  reservation of  rights  with

          respect  to the  excludable  claims" or  it may  share respective

          defense  responsibilities with co-counsel.   30 Mass. App. Ct. at

          323 n.4, 568 N.E.2d at 634 n.4.

                                   III. Conclusion
                                        __________

               If the inspections are found to fall within the professional

          services  exclusion, GRE would  be obligated to  defend the suits

          against   Metropolitan  until   the  non-excludable   claims  are

          resolved,5  or an  arrangement such as  contemplated by  the Camp
                                                                       ____

          Dresser court is established, and would have to indemnify only if
          _______

          Metropolitan were found liable on a non-excludable claim.  If the

          inspections are found  not to be professional services, GRE would

          have to  defend  the suits  and  indemnify Metropolitan  for  any

          successful claims.

               The  judgment of  the  district court  in  favor of  GRE  is
               ____________________________________________________________

          reversed.  The case is remanded for entry of judgment in favor of
          _________________________________________________________________

          Metropolitan  on the  duty  to defend,  and  for a  determination
          _________________________________________________________________

          consistent   with  this   opinion   of   whether   Metropolitan's
          _________________________________________________________________

                              
          ____________________

               5 In  this case,  we would imagine  that GRE could  test the
          viability of those claims that do not rely exclusively on alleged
          inadequate inspections by way  of early motion to dismiss  or for
          summary  judgment in the underlying state cases.  If those claims
          were removed,  it  appears that  GRE's obligation  to defend  the
          underlying cases  would terminate.  See Sterilite,  17 Mass. App.
                                              ___ _________
          Ct. at 323-24 (the duty to  defend ceases if and when the insurer
          demonstrates that no claim asserted  within the grant of coverage
          can be successful in the underlying  action); see also Lumbermans
                                                        ___ ____ __________
          Mut.  Cas. Co. v. Belleville  Ind., Inc., 407  Mass. 675, 685-86,
          ______________    ______________________
          555  N.E.2d 568, 575  (1990) (citing Sterilite  approvingly).  Of
                                               _________
          course, we are not faced with these questions.

                                         -17-

          inspections were professional in nature.
          _______________________________________

                                         -18-