THE JEFFERSON INSURANCE COMPANY OF NEW YORK vs. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.

LAURENCE, J. Two insurance companies here clash over whose policy should provide coverage to their common insured, an ambulance company sued for negligence. The alleged negligent conduct was delay on the part of the company's ambulance, summoned by the local police to re-

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spond to a medical emergency, [Note 1] in arriving at the residence of a man who had collapsed with chest pain. The stricken individual died shortly after being transported by the ambulance to a nearby hospital emergency room. An action brought against the company by the decedent's administratrix and widow attributed the death to that delay. [Note 2] There is no dispute that the delay was occasioned by miscommunication between the company's radio dispatcher and the ambulance attendants regarding the address to which the ambulance was told to respond. [Note 3]

The appellant, The Jefferson Insurance Company of New York (Jefferson), had issued an "Ambulance Attendants Errors and Omissions" policy (E & O policy) to the ambulance company shortly before the incident triggering the litigation. [Note 4] Jefferson defended the ambulance company against the tort action and eventually settled the matter before trial for $75,000. During the pendency of the action, Jefferson had asked the appellee, National Union Fire Insurance Company of Pittsburgh, Pa. (National), to contribute to both the defense and the settlement, based upon National's issuance of a "Comprehensive General Liability Policy" (CGL policy) to the ambulance company during the year in which the incident

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occurred. [Note 5] National, however, refused to participate in either the defense or the settlement, apparently relying upon National's CGL policy exclusion of coverage for "the rendering of or failure to render . . . medical . . . or nursing services [or] any service or treatment . . . of a professional nature" (the professional services exclusion). [Note 6]

Jefferson commenced a declaratory judgment action to determine which policy should provide coverage. [Note 7] On cross motions for summary judgment, a Superior Court judge ruled for National, holding that Jefferson's E & O policy provided "complete and exclusive coverage" for the claims asserted in the underlying complaint. We conclude that National's CGL policy provided concurrent coverage for the delay in responding to the emergency call. [Note 8]

The judge initially observed that National's CGL policy itself "unambiguously covers the damages alleged . . . [as a result of the] miscommunication between the dispatcher and the attendants."' He nonetheless appears to have reasoned that the ambulance attendants' conduct constituted covered professional activities within the terms of the Jefferson E & O

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policy [Note 9] and, perforce, was not covered by National's CGL policy because of its professional services exclusion. The judge, we hold, construed the professional services exclusion too expansively, particularly in the context of a general liability policy.

Despite National's unsupported contention to the contrary, the critical, but undefined, term "professional services" in National's CGL policy is ambiguous and requires our construction because it is "reasonably susceptible to varying readings." Middlesex ins. Co. v. American Employers Ins. Co., 9 Mass. App. Ct. 855, 856 (1980). See also Lumbermens Mut. Cas. Co. v. Offices Unlimited, Inc., 419 Mass. 462, 466 (1995). [Note 10] Although there is no Massachusetts precedent interpreting the professional services exclusion in the context of medical or ambulance services or of a CGL policy, there are several guideposts that persuade us that the dispatcher's and attendants' actions charged as negligent do not constitute the sort of professional services properly falling within that exclusion.

We begin with basic canons of contract construction, which mandate that doubts created by any ambiguous terms in a policy are to be resolved against the insurer (here National) and also require exclusionary clauses to be strictly interpreted

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against the insurer. [Note 11] See Liquor Liab. Joint Underwriting Assn. v. Hermitage Ins. Co., 419 Mass. 316, 322 (1995); Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. 318, 324 (1991), and cases cited. Application of those canons and the test of common sense, see Roe v. Federal Ins. Co., 412 Mass. 43, 49 (1992), cast doubt on the proposition that misreading or misstating an address or driving to the wrong location constituted a professional service, even on the part of an acknowledged professional. Cf. Camp Dresser & McKee, Inc., supra at 323 (it is the actual substance of the conduct under scrutiny, not the formal title or position of those involved, that provides the crucial framework for determining the scope of the professional services exclusion).

Two recent Massachusetts decisions addressing the undefined term "professional services" in different insurance contexts provide additional guidance. Camp Dresser & McKee, Inc. v. Home Ins. Co., supra, involved the issue whether the failure, by an insured consulting company supervising a municipal project, to warn municipal employees working on the project of certain job hazards was within a CGL policy that contained an exclusion for damages "arising out of the rendering or failure to render any professional services." Id. at 320. In applying the above-mentioned interpretive principles, this court viewed the allegedly actionable activities as "management tasks" of a nonprofessional nature, id. at 324-325, and construed the exclusion to encompass only "purely professional activities," id. at 325, involving an "occupation [that] requires specialized knowledge and calls for mental rather than physical skills." Id. at 324.

Further clarification was provided in Roe v. Federal Ins. Co., supra, which concerned the issue whether a dental malpractice policy promising to pay for injuries "arising out of the rendering or failure to render . . . professional services" covered damages occasioned by a dentist's improper sexual relationship with a patient. In the course of holding that it

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did not, the Supreme Judicial Court expatiated on the term "professional services":

"'Something 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' in the context used in the policy provision means something more than mere proficiency in the performance of a task and implies intellectual skill as contrasted with that used in an occupation for production or sale of commodities. 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 of a professional nature or a 'professional service' we must look not to the title or character of the party performing the act, but to the act itself.' [Note 12] . . . [M]embership in a profession has traditionally been recognized as requiring the possession of special learning acquired through considerable rigorous intellectual training ....'[T]he scope of professional services does not include all forms of a medical professional's conduct simply because he or she is a doctor or dentist' . . . [A]n act or service that requires no professional skill [is not a professional service]. Common sense, of course, will always provide a useful guide in differentiating covered from uncovered cases." 412 Mass. at 48-49 (citations omitted).

It is significant that the court's holding -- that the injurious acts for which coverage was sought were not properly characterized as, and did not fall within the category of, professional services -- was reached in the context of determining whether an ambiguous policy provision provided coverage. In such an inquiry, the provision in question is to

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be construed in favor of the insured and coverage. See Charles Dowd Box Co. v. Fireman's Fund Ins. Co., 351 Mass. 113, 119-120 (1966); Hazen Paper Co. v. United States Fid. & Guar. Co., 407 Mass. 689, 700 (1990). Even when thus interpreting the term "professional services" liberally against the insurer, the court would not extend coverage to conduct by a professional that was not an integral part of the specific treatment regimens ordinarily involved in the application of the relevant professional skills. [Note 13] The scope of the term "professional services" in the context of an exclusion in an ambulance policy should not be, under the Camp Dresser-Roe analysis, any broader. That is, the term should encompass conduct constituting emergency medical treatment and the related exercise of professional judgment, but should not apply to incidents involving ordinary tasks performed or achievable by those lacking the relevant professional training and expertise.

That, indeed, has been the conclusion in many cases from other jurisdictions that have construed professional services exclusions in insurance policies otherwise providing coverage for damages from negligent acts. See, e.g., Keepes v. Doctors Convalescent Center, Inc., 89 Ill. App. 2d 36, 40 (1967) (maid negligently leaving young child unattended on floor did not constitute the failure to render professional services); Grant v. Touro Infirmary, 254 La. 204, 217-219 (1969) (miscounting sponges after a surgery not a professional service); D'Antoni v. Sara Mayo Hosp., 144 So. 2d 643, 646-647 (La. Ct. App. 1962) (negligent failure to raise hospital bed rails not a professional service); Duke Univ. v. St. Paul Fire & Marine Ins. Co., 96 N.C. App. 635, 641 (1990) (negligent failure to lock casters on a dialysis chair not within the term "professional services").

Perhaps most instructive in this regard is Guaranty Natl. Ins. Co. v. North River Ins. Co., 909 F.2d 133 (5th Cir. 1990). There, a psychiatric patient was placed in an "open" fourth floor room (one without mesh screens affixed over the windows) and jumped through a window to her death. The

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hospital, sued for negligence, had several liability policies, including a CGL policy from North River and a professional liability policy from another company which agreed to provide coverage to the policy limit. North River refused to pay anything, "claiming that the professional services exclusion in the comprehensive general liability policy excluded any coverage." Id. at 135. The Court of Appeals, however, ruled that the exclusion applied only to "actions taken on behalf of a patient that are based on professional, medical judgment," ibid., and that "[t]he decision to protect the open unit patients through screws in the window sashes rather than through fixed, protective screens over the windows was an administrative, business decision and was not a professional, medical decision." Id. at 136.

In supportive contrast, where the negligent conduct alleged to trigger coverage did involve specialized knowledge and skills, courts elsewhere have found the professional services exclusion to apply. See, e.g., Alpha Therapeutic Corp. v. St. Paul Fire & Marine Ins. Co., 890 F.2d 368, 370-371 (11th Cir. 1989) (exclusion applies to error by medical technician in transcribing medical test results because such activity involves some degree of technical expertise); Northern Ins. Co. v. Superior Ct., 91 Cal. App. 3d 541, 544 (1979) (exclusion applies to error by physician's clerical employee in confusing patients' records and causing physician to operate on wrong patient, as it "is beyond dispute that a physician has the professional duty to correctly identify a surgical patient before undertaking a particular procedure"); Millers Cas. Ins. Co. v. Flores, 117 N.M. 712, 716 (1994) (exclusion in physician's business liability policy applies to unsupervised and untrained physician assistant's giving patient "contraindicated injection," which resulted in a stroke, as the hiring and supervision of employees assisting in providing medical care to patients was part of the rendering of professional medical services); Duncanville Diagnostic Center, Inc. v. Atlantic Lloyd's Ins. Co., 875 S.W.2d 788, 791 (Text Ct. App. 1994) (exclusion applies to administering overdose of sedative by technician).

Applying the canons of construction, the discussions in Roe and Camp Dresser, and the analytical approach reflected in other jurisdictions to the underlying facts here, we conclude that the negligent conduct complained of did not constitute

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professional services. [Note 14] It was rather in the nature of nonspecialized, clerical or administrative activity requiring neither special learning, intellectual skill, nor professional judgment. Nothing in the record suggests that specialized training, skill, or knowledge, beyond the normal intelligence of the ordinary prudent person, is required: to receive messages from the police, to relay those messages or otherwise supply ambulances with the information necessary for emergency medical technicians to render emergency services, to follow directions, or to locate and drive to specified addresses. To the contrary, ordinary experience and common sense, see Roe, supra at 49, indicate that such activities require only the everyday, practical abilities of the average adult, not the art of the adept. [Note 15]

Indeed, to rule otherwise-particularly in the context of a CGL policy generally intended and expected to provide broad liability coverage for tort claims arising out of the insured's entire business and administrative operations, cf. Trustees of Tufts Univ. v. Commercial Union Ins. Co., 415 Mass. 844, 847-849 (1993); Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. at 319-321, 323 [Note 16] - would produce an anomalous result. If the conduct here at issue were construed as falling within the professional services exclusion,

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there would be few actions of ambulance employees that would be covered, for virtually all of the ordinary activities of ambulance company personnel could be deemed professional in the broad, general sense. [Note 17] Such an interpretation "would have the exclusion swallow the policy," id. at 323, and cannot be endorsed. Cf. Liberty Mut. Ins. Co. v. Tabor, 407 Mass. 354, 358 (1990) ("A provision in an insurance policy that negates the very coverage that the policy purports to provide . . . is void as against public policy."). [Note 18]

Since the judge ruled that there was no concurrent coverage, he did not reach the additional point Jefferson presses on appeal, that National was in breach of its duty to defend the insured ambulance company. [Note 19] In light of our discussion of the professional services exclusion, we need pause only briefly to note our agreement with Jefferson. The judge himself read the National CGL policy, sans exclusion, as "unambiguously cover[ing] the damages alleged in the underlying complaint." Under the applicable test, a duty to defend arose on National's part because the allegations of the complaint showed at least a possibility of coverage under its CGL policy. Sterilite Corp. v. Continental Cas. Co., 17 Mass. App. Ct. 316, 318-319, 323-324 (1983). See Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. at 321-322. That possibility could not reasonably be deemed wholly extinguished by an ambiguous exclusionary clause which National should have been aware would be strictly construed against it. See id. at 323 & n.4,

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324-325. Contrast, e.g., Timpson v. Transamerica Ins. Co., 41 Mass. App. Ct. 344, 350-353 (1996) (no duty to defend when the underlying complaint alleges only intentional conduct and the policy explicitly excludes intentional conduct from coverage).

Charged with a contractual duty to defend because its policy provided coverage in the underlying action, [Note 20] National incurred liability for the reasonable costs of both defense and settlement. See Camp Dresser & McKee, Inc. v. Home Ins. Co., 30 Mass. App. Ct. at 325-326. Compare Polaroid v. Travelers Indem. Co., 414 Mass. 747, 761, 763-765 (1993). We agree with Jefferson that the extent of National's liability in this case is one-half of those costs. An insurer who unjustifiably refuses or fails to defend its insured, even in good faith, assumes the consequential risks of that breach of its insurance contract, including liability for the expense of a reasonable settlement of the underlying claim as well as the cost of the defense to that time. See Berke Moore Co. v. Lumbermens Mut. Cas. Co., 345 Mass. 66, 70-71 (1962); Polaroid Corp. v. Travelers Indem. Co., 414 Mass. at 762-764. We conclude that, when two policies issued by different insurers arguably cover at least some, if not all, of the settled claims, the defense-defaulting insurer bears the burden of establishing that the allocation of those costs should be other than per capita. See Liquor Liab. Joint Underwriting Assn. v. Hermitage Ins. Co., 419 Mass. at 323-324 & n.6. See also Kenner v. Century Indem. Co., 320 Mass. 6, 14-15 (1946); Travelers Ins. Co. v. Aetna Ins. Co., 359 Mass. 743 (1971); Mission Ins. Co. v. United States Fire Ins. Co., 401 Mass. 492, 498-501 (1988). See generally Federal Ins. Co. v. Cablevision Sys. Dev. Co., 836 F.2d 54, 56-58 (2d Cir. 1987); Twin City Fire Ins. Co. v. Home Indem. Co., 650 F. Supp. 785 (E.D. Pa. 1986); Continental Cas. Co. v. Zurich Ins. Co., 57 Cal. 2d 27 (1961); 8A Appleman, Insurance Law and Practice s. 4907.65, at

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367-369 (rev. ed. 1981). National has wholly failed to satisfy that burden here. [Note 21]

The judgment is vacated. The case is remanded to the Superior Court for entry of: (a) a declaratory judgment that National's CGL policy provided concurrent coverage of the underlying claim and required National to participate with Jefferson in the defense and settlement of that claim; and (b) summary judgment in favor of Jefferson requiring National to contribute and indemnify Jefferson for one-half of the reasonable costs of the defense and settlement of the underlying action.

So ordered.