Court Opinion

ID: 9477237
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:18:10.725048+00
Date Added: 2024-06-11T17:45:46.340052
License: Public Domain

SLOVITER, Circuit Judge,
dissenting.
I agree with the majority that in the circumstances of this case, where the parties had stipulated that “[t]he only issue to be determined by the Court in connection with the motion to set aside default judgment is whether or not Aetna has established a meritorious defense which would constitute a defense to plaintiffs’ action,” App. at 195, the district court did not err in deciding the merits of Aetna’s position rather than merely whether a meritorious defense was alleged. I differ with the majority, however, in their conclusion that Aetna’s policy excluded Harad’s claim against it. Although the majority’s construction of the policy language is not an unreasonable one, it is not the only possible construction. See Little v. MGIC Indemnity Corp., 836 F.2d 789, 794-95 (3d Cir.1987). Therefore, I agree with Chief Judge Fullam who decided this case in the district court that, at best, the Aetna policy was ambiguous, containing two contradictory *986provisions. Under Pennsylvania law, ambiguity in an insurance contract is to be resolved against the insurer.1 Therefore, the judgment against Aetna, which was the insurer in this case, should be affirmed.
The Aetna policy is a Business Owners Policy, sets forth that Harad’s business is that of an Attorney at Law, and provides, inter alia, coverage for damages arising out of claims for personal injury. The definition of personal injury applicable to the “Personal Injury And Advertising Offense Liability Coverage” expressly includes malicious prosecution: “[pjersonal injury means injury arising out of the offense of ... malicious prosecution.” App. at 91. The majority concludes that notwithstanding this embrasive inclusion, Aetna need not defend the malicious prosecution suit brought by Catania against Harad because the policy excludes “personal injury arising out of the rendering or failure to render any professional service” if the policy is issued to an attorney, or certain other named professionals. App. at 95.
The district court held that this exclusion for rendering or failing to render professional services had no application to Harad’s potential liability to Catania, who was an adverse party to Harad’s client and to whom he rendered no professional services. In concluding that the district court erred, the majority refers to cases in other jurisdictions construing the term “professional services.”2 See Maj. at 984. However, in almost all of the relevant cases, the term has been construed to extend liability coverage for the insured, and not to contract it. See, e.g., Bank of California, N.A. v. Opie, 663 F.2d 977 (9th Cir.1981); St. Paul Fire & Marine Ins. Co. v. Three “D” Sales, Inc., 518 F.Supp. 305, 310 (D.N.D.1981); Noyes Supervision, Inc. v. Canadian Indem. Co., 487 F.Supp. 433, 438 (D.Colo.1980). It is particularly significant that the Pennsylvania courts, to whom we must look for the construction of Pennsylvania law, have viewed the term “professional services” to be ambiguous, see Danyo v. Argonaut Insurance Companies, 318 Pa.Super. 28, 464 A.2d 501, 502 (1983), and have upheld coverage based on the ambiguity in the policy.
Aetna’s policy does not define the term “professional services” as used in the exclusion or elsewhere. This court faced a similar situation in Pacific Indemnity Co. v. Linn, 766 F.2d 754, 763 (3d Cir.1985), where we held that when the term “professional services” is not defined within the policy and is subject to more than one reasonable interpretation, the term is ambiguous. A term is ambiguous under the law “if reasonably intelligent men on considering it in the context of the entire policy would honestly differ as to its meaning.” Celley v. Mutual Benefit Health and Accident Association, 229 Pa.Super. 475, 324 A.2d 430, 434 (1974).
In Linn, we referred to the well settled principle under Pennsylvania law that “where ambiguous, exceptions to an insurer’s general liability are to be strictly construed against the insurer.” 766 F.2d at 763. Accordingly, we held that the exclusion from coverage for injuries resulting from the rendering or failure to render professional services was inapplicable to exclude coverage for claims based on the insured physician’s alleged liability arising out of a diet book he authored. We stated in Linn that “[although Aetna’s reading of the exclusion is plausible, i.e., professional services are not covered, under Pennsylvania law the ambiguity must be resolved in favor of the insured.” Id. I see no reason why the same result should not follow in this case.
There is yet another reason why Aetna’s claim that this coverage is excluded should fail. Aetna knew when it provided business insurance for Harad that his business was that of an attorney. Insurance compa*987nies should not be allowed to give coverage with the right hand and then take it away with the left. I cannot agree with the niggardly approach taken by Aetna, and accepted by the majority, that the Business Owners Policy is intended to cover only the “non-professional” business activities of an attorney, such as renting office space, purchasing supplies, and hiring and firing staff. Such an approach is particularly inappropriate here because the Aetna policy expressly includes coverage for malicious prosecution, which is different in essence from the ministerial activities to which Aetna claims it is limited. It is difficult to conceive of the type of malicious prosecution suit brought against an attorney to which the express coverage would apply under Aetna’s construction. If it wanted to exclude the defense of attorneys in malicious prosecution suits, it should have done so expressly.
Therefore, I would affirm the judgment of the district court.

. This court has held, following Pennsylvania’s law, that the rule of construction in favor of the insured is not altered by the fact that the insurer and insured are both large corporations that bargained together over the policy. See ACandS, Inc. v. Aetna Casualty and Surety Co., 764 F.2d 968, 973 (3d Cir.1985).

. The cases relied on by the majority in footnote 5 do uphold actions against attorneys by third parties, but do not consider construction of insurance policies and in particular do not hinge on the definition of "professional services."