The district court granted summary judgment to QBE, finding that although Tranqualino's complaint characterized BMI's conduct as negligent, it only alleged “intentional” actions and inactions and that any harm was a foreseeable consequence of the alleged conduct. As a result, the court concluded that there was no “occurrence” and, thus, no coverage or duty to defend.

BMI appealed. The Court of Appeals, Fifth Circuit, affirmed, holding that the professional services exclusion applied and that QBE had no duty to defend.

According to the court, although the policy did not define “professional services” nor “engineering services,” Mississippi courts had concluded that in the context of a professional service exclusion where the contract is silent on its meaning, “a 'professional service' involves the application of special skill, knowledge and education arising out of a vocation, calling, occupation or employment.”

Thus, applying the eight-corners test, the court looked to the complaint to determine whether the conduct alleged fell within the “professional services” exclusion of the policy. Pursuant to the test, the professional services exclusion for bodily injuries was applicable. Although the conduct complained of included non-technical activities, the complaint in the underlying action explicitly attributed the accident to a breach of “professional responsibilities” as the “engineering firm” on the site, and these acts were excluded from coverage.

Editor's Note: The court emphasized in its holding that even studiously construing the policy in favor of the insured in this case, the allegations in the complaint were precisely the sort of potential liability the professional services exclusion is designed to excise from coverage.