Court Opinion

ID: 9526755
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:23:34.767949+00
Date Added: 2024-06-11T13:21:46.018944
License: Public Domain

JUSTICE HOFFMAN, dissenting: Resolution of this appeal requires the construction of the professional services exclusion contained within a general liability policy of insurance issued by Vigilant Insurance Company (Vigilant). The majority has correctly set forth the general standards to be applied in construing an insurance policy. However, I am compelled to dissent because I believe that the majority has misapplied those standards by failing to interpret arguably ambiguous terms in the subject policy in favor of coverage. See Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 119, 607 N.E.2d 1204 (1992). The majority has accurately set forth the facts of this case. Succinctly put, David Carmell filed a six-count complaint against the law firm of Gould & Ratner and one of its partners, Jonathan Backman. Two of the counts in Carmell’s complaint stated claims for defamation against Gould & Ratner by reason of certain letters Backman wrote in the course of the firm’s representation of Apex Automotive Warehouse, L.E, in a bankruptcy proceeding. Gould & Ratner tendered the defense of the Carmell action to its insurer, Vigilant. Vigilant denied coverage under the general liability policy it had issued to Gould & Ratner, claiming, inter alia, that the defamation claims fell within the scope of a policy exclusion for professional services. As a consequence, Vigilant refused to defend Gould & Ratner. After settling the Carmell suit, Gould & Ratner filed the instant action against Vigilant for breach of contract. In affirming the summary judgment entered in favor of Vigilant, the majority relies primarily upon the holding in Pekin Insurance Co. v. L.J. Shaw & Co., 291 Ill. App. 3d 888, 684 N.E.2d 853 (1997) (Pekin), and finds that the defamation actions asserted against Gould & Ratner in the Carmell suit fall within the professional services exclusion at issue. I disagree. Rather, I believe that the wording of the professional services exclusion in the Vigilant policy is readily distinguishable from the exclusion at issue in Pekin. In Pekin, the policy at issue excluded coverage for certain damages “due to rendering or failure to render any professional service[s].” 291 Ill. App. 3d at 890. The Pekin court held that the exclusion was applicable to actions brought by one whose damages were caused by the insured’s rendering or failing to render professional services and was not limited to actions brought by a client of the insured. Pekin, 291 Ill. App. 3d at 894-97. In so holding, the court relied upon the holdings in Hurst-Rosche Engineers, Inc. v. Commercial Union Insurance Co., 51 F.3d 1336 (7th Cir. 1995) (Hurst-Rosche), and Erie Insurance Group v. Alliance Environmental, Inc., 921 F. Supp. 537 (S.D. Ind. 1996) (Erie). Pekin, 291 Ill. App. 3d at 892-97. In Hurst-Rosche, the court determined that actions for libel and tortious interference with contract asserted against the insured engineering firm by a non-client and arising out of a letter that a firm employee wrote in the course of performing duties for a client fell within the scope of a policy provision which excluded coverage for damages “arising out of the rendering or failure to render any professional services.” Hurst-Rosche, 51 F.3d at 1343-44. In Erie, the policy provision at issue excluded coverage for damages “due to any service of a professional nature.” Erie, 921 F. Supp. at 542. Citing, inter alia, Hurst-Rosche, the Erie court concluded that claims of defamation and tortious interference with contract asserted against the insured by a nonclient and arising from statements the insured made during the course of performing inspection services for a client fell within the scope of the professional services exclusion. Erie, 921 F. Supp. at 541-47. The majority concludes that the professional services exclusion contained in the policy issued by Vigilant, like the relevant provisions in Pekin, Erie and Hurst-Rosche, is not limited to claims or suits brought by a client of the insured. I disagree. The professional service exclusions at issue in Pekin, Erie and Hurst-Rosche are framed in terms of injury or damage “due to” (see Pekin, 291 Ill. App. 3d at 890; Erie, 921 F. Supp. at 541) or “arising out of’ (see Hurst-Rosche, 51 F.3d at 1340) the rendition or failure to render professional services, not in terms of the legal theory upon which the claim or suit for the damage or injury is based. See Erie, 921 F. Supp. at 542. As a consequence, these exclusions do not require privity between the insured and the underlying claimant and are not limited to injury or damage suffered by a client of the insured professional. See Pekin, 291 Ill. App. 3d at 894-97. In contrast, the professional service exclusion in the Vigilant policy at issue in this case states that the insurance provided does not apply to any “claim or suit” against the insured “for rendering or fading to render written or oral professional legal services or advice.” I believe that the exclusion in the Vigilant policy can reasonably be interpreted as being applicable only to claims or suits brought by a client of the insured or a third-party beneficiary of a contract between the insured and its client, since only a client or a third-party beneficiary of an attorney-client relationship has a claim, or can maintain a suit, against an attorney for rendering or failing to render legal services. See Pelham v. Griesheimer, 92 Ill. 2d 13, 440 N.E.2d 96 (1982). There is, to my mind, a clear distinction between the wording of the professional service exclusions at issue in Pekin, Erie and Hurst-Rosche and the one at issue in this case. Further, contrary to the declaration of the majority, I believe that the distinction is one with a difference. In support of its conclusion that the professional service exclusion in the instant case is no different in scope than the one at issue in Pekin, the majority notes that “[t]he American Heritage College Dictionary (3d ed. 2000) defines both ‘for’ and ‘due to’ as ‘because of.’ ” 336 Ill. App. 3d at 409. I believe, however, that reliance upon dictionary definitions in many cases is akin to reliance upon expert testimony: you can always find one to say what you need said. Webster’s Third New International Dictionary (Webster’s), which bills itself as “The Definitive Merriam-Webster Unabridged Dictionary of the English Language,” defines “for” as “on this ground.” Webster’s Third New International Dictionary 886 (1981). If one adopts Webster’s definition of the word “for” and construes the professional service exclusion in Vigilant’s policy to apply to claims or suits asserted against its insured on the grounds of rendering or failing to render professional legal services, Gould & Ratner’s assertion that the exclusion is only applicable to claims or suits brought by a client is no longer easily dismissed. See Pelham, 92 Ill. 2d at 20-25. In any case, I believe that Gould & Ratner’s suggested interpretation is a reasonable one. As our supreme court stated in Outboard Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 119, 607 N.E.2d 1204 (1992): “[I]n construing the terms in an insurance policy, the court must ascertain the intent of the parties. [Citation.] If the terms of the policy are clear and unambiguous, the court must give them their plain, ordinary, popular meaning. [Citation.] If a term in the policy is subject to more than one reasonable interpretation within the context in which it appears, it is ambiguous. [Citation.] Ambiguous terms are construed strictly against the drafter of the policy and in favor of coverage. [Citations.] This is especially true with respect to exclusionary clauses. [Citation.]” (Emphasis added.) I believe that, at a minimum, the professional services exclusion contained in the Vigilant policy is ambiguous and can reasonably be interpreted as applying only to claims or suits for the rendition of or failure to render legal services brought by a client of the insured attorney or a third-party beneficiary of a contract between the insured attorney and a client. Since it is clear from the underlying complaint that CarmelPs claims for defamation against Gould & Ratner were not based upon his status as a client or a third-party beneficiary or based upon any legal services rendered to him or for his benefit, they do not fall within the scope of the professional services exclusion. I would, therefore, reverse the judgment of the circuit court and remand this matter for further proceedings.