Yorkshire v. Weatherford ( 1995 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
No. 95-30383
Summary Calendar
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YORKSHIRE INSURANCE CO. LTD., et al.,
Plaintiff-Appellee,
VERSUS
WEATHERFORD U.S., INC.,
Defendant-Appellant.
_________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
(94 CV 3922)
_________________________
December 27, 1995
Before KING, GARWOOD, and SMITH, Circuit Judges.
JERRY E. SMITH, Circuit Judge:*
Weatherford U.S., Inc. (“Weatherford”), appeals both a summary
judgment in favor of Yorkshire Insurance Co. (“Yorkshire”) and the
denial of its motion for relief from judgment. Finding no error,
we affirm.
*
Local Rule 47.5.1 provides: "The publication of opinions that have no
precedential value and merely decide particular cases on the basis of well-
settled principles of law imposes needless expense on the public and burdens on
the legal profession." Pursuant to that rule, the court has determined that this
opinion should not be published.
I.
This litigation arises from a serious injury suffered by
Raymond Gaspard, who was working on an offshore supply vessel when
a cable on a crane broke, causing an accident that cost him both of
his legs. Gaspard has filed suit against a number of parties,
including Weatherford.
Weatherford's only involvement with the crane was a service
call by Henry Davis, a crane mechanic in its employ. Two months
prior to the accident, Davis performed two operations on the crane:
a static load test and a routine inspection. He had received no
formalized training in performing these operations. He had only a
tenth-grade education and obtained his knowledge through hands-on
experience.
Yorkshire is Weatherford's insurer. Under the terms of the
policy, Yorkshire is not obligated to provide coverage for errors
of a professional nature, including those stemming from inspection:
[T]his policy shall not apply to . . .
Any negligence, error or omission, malpractice or mistake
of a professional nature committed or alleged to have
been committed by or on behalf of the insured in the
conduct of any of the insured's business activities.
Professional services includes but is not limited to the
preparation or approval of maps, plans, opinions,
reports, surveys, designs or specification and supervi-
sory, inspection, engineering, or data processing
services.
(Emphasis added.)
After Gaspard filed suit, Yorkshire initiated this action,
seeking declaratory judgment that it had no duty to defend
Weatherford. The district court found that Davis's inspection and
2
testing of the crane was an "inspection," excluded from coverage by
the insurance contract as a type of "professional service." The
court granted summary judgment for Yorkshire. Weatherford then
filed a motion for relief from judgment, which the court denied.
II.
Weatherford raises four issues on appeal regarding summary
judgment. First, it contends that the court erroneously found
Davis's inspection to be a "professional service" excluded from
coverage by the insurance contract. Second, Weatherford argues
that even if the contract does exclude Davis's inspection,
Yorkshire still has a duty to defend because Gaspard's complaint
alleged that Weatherford was liable for reasons other than Davis's
inspection. Third, Weatherford maintains that the district court
improperly made findings of fact when granting summary judgment.
Finally, Weatherford alleges that the district court should have
applied Texas rather than Louisiana law.
A.
In claiming that the contract's exclusion of "professional
services" does not include Davis's inspection, Weatherford notes
that we look to the intent of the parties to interpret contracts.
It then cites to several cases in which courts have defined
professional services to exclude the sort of inspection performed
3
by Davis.1
Weatherford's argument, however, ignores the fact that the
insurance contract before us explicitly defines "professional
services" to include "inspections." The best evidence of the
parties' intent is the language of the contract. When that
language is unambiguous, we need look no further.2 Nor do the
cases Weatherford cites support its conclusion, for in none of
those cases did the contract explicitly define "professional
services." We therefore conclude that Davis's inspection was a
"professional service" explicitly excluded from coverage.
Weatherford also calls our attention to a pending lawsuit, the
Pass case, in which the plaintiff has made similar allegations
against Weatherford. In Pass, however, Yorkshire has apparently
assumed a duty to defend. Weatherford maintains that Yorkshire's
conduct with respect to Pass demonstrates the parties' intent with
respect to the insurance contract. The parties' intent is best
1
See Hurst-Rosche Eng’rs v. Commercial Union Ins. Co., 51 F.3d 1336, 1343
(7th Cir. 1995) (observing that professional services involve “specialized
knowledge, labor or skill, and [are] predominantly mental or intellectual as
opposed to physical or manual”); Gulf Ins. Co. v. Gold Cross Ambulance Serv.,
327 F. Supp. 149, 152 (W.D. Okla. 1971) (defining professional services to mean
“work requiring knowledge of an advanced type in a field of learning or science
customarily acquired by a prolonged course of study of specialized intellectual
instruction as distinguished from training in the performance of routine, manual
or physical processes”); Ætna Fire Underwriters Ins. Co. v. Southwestern Eng’g
Co., 626 S.W. 2d 99, 101 (Tex. App.SSBeaumont 1981, writ ref’d n.r.e.) (defining
the “practice of professional engineering” to mean “any service or creative work,
. . . the performance of which requires engineering education, training and
experience in the application of special knowledge of the mathematical, physical,
or engineering sciences to such services or creative work”) (quoting TEX. REV.
CIV. STAT. ANN. art. 3271a, § 2(4) (1968)).
2
See Esplanade Oil & Gas Co. v. Templeton Energy Income Corp., 889 F.2d
621, 623 (5th Cir. 1989) ("When the words of the contract are clear and
unambiguous and lead to no absurd consequences, no further inquiry may be made
into the parties' intent."); Andrus v. Police Jury of Parish of Lafayette, 270
So. 2d 280 (La. App. 3d Cir. 1972) ("Clear and unambiguous policy provisions are
to be enforced as written.").
4
reflected, however, in the explicit definition of "professional
services" contained in the contract.3
B.
Weatherford also argues that Yorkshire has a duty to defend
because Weatherford is potentially liable to Gaspard for reasons
other than Davis's negligence in inspecting the crane. Davis also
performed a static load test on the crane. Weatherford contends
that this test was not an "inspection" and hence was not excluded
as a "professional service." Weatherford also asserts that
Gaspard's complaint contains a generalized allegation of negligence
that triggers Yorkshire's duty to defend.
We find no merit in Weatherford's argument that the static
load test was not an inspection. The term “inspection” is not
defined in the contract, so we assume that it retains its common
meaning.4 We believe that "inspection," reasonably understood,
incorporates testing, at least the sort of testing Davis performed.
See WEBSTER'S NINTH NEW COLLEGIATE DICTIONARY (1983) (defining "inspec-
tion" as "a checking or testing of an individual against estab-
lished standards") (emphasis added).
3
To the extent that Weatherford is attempting to make an estoppel argument,
we agree with the district court that Weatherford has not presented any elements
of such a claim.
4
See LA. CIV. CODE ANN. art. 2047 (West 1987) ("The words of a contract must
be given their generally prevailing meaning."); Louisiana Ins. Guar. Ass'n v.
Interstate Fire & Casualty Co., 630 So. 2d 759, 763 (La. 1994) (opining that
"intent is to be determined in accordance with the general, ordinary, plain and
popular meaning of the words used in the policy"); Breland v. Schilling, 550
So. 2d 609, 610 (La. 1989) (stating that "words used in an insurance contract
will be given their commonly prevailing meaning").
5
Weatherford contends that Yorkshire also has a duty to defend
stemming from Gaspard's generalized allegation of negligence
against Weatherford. Gaspard alleges that Weatherford is liable
for "[a]ll fault and negligence contemplated by La. Civil Code Art.
2315 and all fault and negligence discovered prior to trial or
proven at trial."5 Weatherford argues that Yorkshire has a duty to
defend Weatherford against this generalized allegation of negli-
gence.
We disagree. It is well-established that in determining an
insurer's duty to defend, "[o]nly the factual allegations of the
pleadings are considered." Complaint of Stone Petroleum, 961 F.2d
90 (5th Cir. 1992).6 The only factual allegations Gaspard made
against Weatherford are that Weatherford acted improperly in
conducting its inspection and testing of the crane.
As a legal matter, Weatherford may be liable for general
negligence in its inspection of the crane, for ignoring a duty to
warn (irrespective of whether that duty is inherent in
Weatherford's contract to inspect the crane), or for a number of
other reasons. As a factual matter, however, all of Weatherford's
5
Gaspard also made three specific allegations of negligence:
a. Improper and negligent inspection of the crane and anti-two
block system;
b. Failing to detect and/or discover problems in the anti-two
block system;
c. Failing to properly test and/or inspect the crane and anti-two
block system . . . .
6
See also Jensen v. Snellings, 841 F.2d 600, 612 (5th Cir. 1988) ("It is
only the factual allegations which are considered, however; statements of
conclusions in the complaint that are unsupported by factual allegations will not
trigger a duty to defend.").
6
liability must stem from its inspection and testing of the crane,
as it had no other contact with the crane or Gaspard. Thus,
Gaspard's generalized allegation of negligence does not create a
duty to defend.
C.
Weatherford contends that the district court improperly made
findings of fact by concluding that Davis's services were
professional, that the testing he performed was an inspection, and
that any duty Weatherford had to warn Gaspard was inherent in its
contract to inspect the crane. These contentions do no more than
cast the arguments we have already addressed in a different guise.
We therefore reject them.
D.
Weatherford also takes issue with the district court's
conclusion that Louisiana law governs this case. Weatherford's
brief, however, apparently concedes that whether we apply Texas or
Louisiana law makes no difference with respect to the above
issues.7 We therefore do not reach this question.
III.
7
In its brief, Weatherford states that "[t]he district court concluded
. . . that there was no difference between the insurance laws of the two states
[Louisiana and Texas]. The district court was . . . premature to decide this
issue if the principles were the same in both states. The court should simply
have limited its holding to a conclusion that the general principles involved
were widely accepted and it made no difference which law was applied to the
issues before the court." (Emphasis added.)
7
Weatherford contends that the district court improperly denied
its motion for relief of judgment pursuant to FED. R. CIV. P. 60(b).
We review an order denying such a motion for abuse of discretion.
Vela v. Western Elec. Co., 709 F.2d 375, 376 (5th Cir. 1983)
(stating that "we reverse only if the district judge has plainly
abused discretion"); Phillips v. Insurance Co. of N. Am., 633 F.2d
1165, 1167 (5th Cir. Unit B Jan. 1981) (noting that "our review is
limited to whether the district court abused its discretion in
denying the Rule 60 motion").
We conclude that the district court's reasons for denying the
rule 60 motion were legitimate and not an abuse of discretion.
Weatherford sought relief from judgment on the ground that the
lawsuit had proceeded to summary judgment so quickly as to impair
its ability to obtain evidence and defend the case. The district
court rejected Weatherford's argument because Weatherford made no
attempt, before summary judgment, to obtain additional time in
which to gather evidence and prepare a defense:
At no time did Weatherford move for a continuance of the
motion for summary judgment. The record indicates that
the court freely granted continuances on a separate
motion for summary judgment in this proceeding. Nor did
Weatherford indicate in its opposition that summary
judgment was premature because of inadequate discovery.
On appeal, Weatherford offers no explanation for its failure to
request a continuance or to delay summary judgment. See FED. R.
CIV. P. 56(f). We thus find no abuse of discretion.
AFFIRMED.
8