Court Opinion

ID: 9752206
Source: CourtListenerOpinion
Date Created: 2023-08-28 17:44:10.087098+00
Date Added: 2024-06-11T07:27:09.453779
License: Public Domain

*525TAMILIA, Judge,
dissenting:
This appeal was taken from the Order of the trial court directing appellant liability insurers, Transamerica Insurance Company, Industrial Indemnity Company and Employers Reinsurance Corporation, to defend an action on behalf of Richard Biborosch, t/a The R.F. Biborosch Agency, against a discharged employee who was a soliciting agent.
I believe the trial court and the majority on the panel have completely misconstrued the terms of the contracts subject to this suit and have found liability where none exists.
The essence of the various contracts analyzed and discussed in this case was to protect the agency from losses incurred because of defects, negligence and failures in fulfilling its professional responsibility to clients and policy holders enrolled by the agency. They carry most if not all the elements of professional malpractice insurance. Under no reasonable interpretation can any of the policies be construed to require the appellants to defend an action arising out of termination of an employee/agent due to alleged malfeasance or fraud against the agency. Such a termination is pursuant to the business or employment relationship between the agent and Biborosch and not the professional dealings of the agency as represented by the managers or agent to the public.
Contracts are intended to be read in such a fashion as to avoid ambiguity. Here, reviewing each of the contracts and sections covering liability of the insurers, it is beyond question that the terms “professional” and “professional services” apply to the activities of employees of the agency as they relate to the service provided to the clients. As in any undertaking, those who hold themselves out to the public as proficient and competent to perform a service can be held liable for failure to provide the service pursuant to an acceptable standard.
This is particularly true in an endeavor which is licensed by the Commonwealth and which requires a degree of *526competence and ability, with knowledge and skills that bring it within the framework of a profession. Professional standards are clearly and specifically ascertainable whether it be in law, medicine, insurance or real estate brokerage, education or social services to mention a few. The provisions of these policies, which are the focus of this case, are geared to protect the agency from claims of insureds for some dereliction of duty to hire competent managers and agents and to train, supervise and maintain professional standards and conduct of the agents and managers of the insurance agency. This coverage is essential because the agency becomes liable to third parties, their insureds, when the third party suffers a loss because of the professional failure of the agents or managers of the agency.
Even the strained construction suggested by the majority cannot bring the termination of an employee, allegedly breaking his employment contract with the agency, and an action for wrongful discharge, within the contractual undertaking by appellant insurers. This is not a breach of duty by an agent to a client, intended to be defended against by the policy, but a simple employment contract, the breach for which, if it occurred, is not covered by the policies in question.
The involved and circuitous discussion of professional accountability in the context of this case is unconnected to the language in the policy. Appellants cite abundant law in their briefs interpreting professionalism and its application to the contracts in question, all of which support the conclusion that they are not required to defend Biborosch in the action by its terminated employee against it. I would reverse the trial court and dismiss the case.