Dale A. Drozd, UNITED STATES DISTRICT JUDGE.
This matter is before the court on the parties' cross-motions for summary judgment.
Plaintiffs The Travelers Indemnity Company of Connecticut ("Travelers Indemnity") and The Travelers Property Casualty Company of America ("Travelers Property") (collectively, "Travelers") and defendant Hudson Insurance Company ("Hudson") each and separately insured NV5 Holdings, Inc. and Nolte Associates, Inc. (collectively, "Nolte"). (Doc. No. 18-2) (Joint Statement of Undisputed Facts ("JSUF")) at 2, 4.) Travelers issued Nolte commercial general liability policies, and Hudson issued Nolte a professional services policy. (Id. at 2-4.) While insured under those policies, Nolte, a firm that provides construction management services, was named as a defendant in an underlying state court action stemming from a construction site accident. (Id., Ex. 5.)
The present action is an insurance coverage dispute arising from a settlement paid by Travelers on behalf of Nolte in that underlying state court action. Travelers contends that Hudson must reimburse it for the entire settlement amount and half of the defense fees and costs it incurred in defending Nolte in that action, because the allegations against Nolte in that underlying action arose out of Nolte's professional services. (Doc. No. 18 at 2.) Hudson counters that Travelers' complaint fails as a matter of law because: (1) Travelers has pled the wrong causes of action; and (2) the events that gave rise to the underlying action against Nolte are not within the scope of the policy that Hudson issued to Nolte. (Doc. No. 17 at 7.) The following facts are relevant to the pending motions.
On May 20, 2009, Nolte and the City of Bakersfield (the "City") entered into a construction management agreement (the "CMA"). (JSUF at 4-5 & Ex. 4.) Pursuant to the CMA, Nolte was to "furnish a licensed Civil Engineer as Construction Manager" and to "competently and thoroughly provide Construction Management Services" for the second phase of the City's planned construction of a six-lane freeway (the "Project"). (Id. at 302, 313; Doc. No. 17 at 7.) These services included "construction observation, materials testing, and contract administration" for the Project, as well as "structural observation services, roadway observation services, survey quality assurance, [and] materials testing and support staff, as needed, during the course of the construction." (JSUF at 313.) As relevant here, the CMA provided that:
(Id. at 317-318.) The CMA further provided that:
(Id. at 314-15.) Finally, the CMA noted that Nolte's "tasks shall include all the procedures necessary to properly perform the Construction Management tasks, whether specifically included in the scope of work or not." (Id. at 302.)
Justin Todahl ("Todahl") was employed as a laborer by one of the contractors working on the Project. (Id. at 5.) On August 28, 2012, Todahl was injured while working on the Project. (Id.) The parties agree that on the date Todahl sustained his injuries, Nolte representatives were at the construction site "for the purpose of providing professional services pursuant to the Construction Management Agreement." (Id. at 6.)
On August 22, 2014, Todahl filed a first amended complaint against Nolte and other defendants in the Kern County Superior Court (the "Todahl action" or the "underlying action"). (Id. at 5.) Therein, Todahl alleged that, on the date of the incident, "a cement truck suddenly and without warning backed into him, crushing his body between the cement truck and paving trough." (Id.) Todahl asserted a general negligence cause of action against Nolte, alleging that it was "negligent in the selection, hiring, training, education, supervision, management, and retention of [contractors]... so as to have actually, legally, and proximately caused [Todahl] to suffer serious injuries." (Id. at 336.) Todahl alleged that Nolte "had a responsibility to supervise the job and ensure that the job was being performed in a safe manner and in compliance with state and federal regulations[] because [Nolte] ... w[as] responsible for providing construction management and/or general contractor services for the [Project]." (Id. at 337.)
In September 2014, Nolte tendered the Todahl action to Travelers under Travelers' Comprehensive General Liability Policy and to Hudson under Hudson's Professional Liability Policy. (Doc. Nos. 20-1 at
In February 2017, Todahl was deposed. During his deposition, he testified that a Nolte employee or representative instructed him to clean out the paving trough between truckloads of cement. (Doc. No. 21-4 at 5.) Specifically, Todahl testified that:
(Id. at 6-7.)
On September 5, 2017, Travelers retendered its defense of Nolte to Hudson. (JSUF at 6.) On November 2, 2017, Hudson responded to Travelers and acknowledged that the Todahl action was potentially covered under the policy it had issued to Nolte. (Id.; see also id., Ex. 7.) Specifically, Hudson stated that "we have determined that there may be a potential of coverage; however, any such coverage would be excess to Travelers' policy, so Hudson will participate in the defense and indemnity of [Nolte] subject to a full reservation of rights following the exhaustion of Travelers' policy." (JSUF at 347.) On December 13, 2017, Travelers responded to Hudson, contending that "Hudson's excess coverage position was erroneous" and that "Traveler's coverage is co-primary with Hudson's." (Id. at 353.) Travelers demanded that "Hudson participate in resolution of th[e] claim on a pro-rata basis" given that "th[e] case clearly implicates Hudson's professional coverage." (Id.) On February 27, 2018, Hudson informed Travelers that it would participate in a mediation of Todahl's claim against Nolte scheduled for March 13, 2018. (Id. at 358.) Hudson also asserted that it had no duty to provide coverage because the allegations against Nolte did not arise out of Nolte's professional services and because its policy's "actual construction" exclusion precluded coverage. (Id. at 358-59.) Hudson reiterated its position that its coverage was only in excess to Travelers' primary coverage. (Id. at 359.) On March 2, 2018, Travelers responded to Hudson, contending that both policies were primary policies and that, depending on whether the underlying claim is a general liability claim or a professional services claim, either Travelers or Hudson would be responsible for indemnifying Nolte. (Id. at 361.) Travelers reiterated that both insurance carriers "should be participating in the defense on a 50/50 basis unless and until there is a judicial determination as to coverage" because "both carriers have acknowleged [sic] a potential for coverage." (Id.) On March 9, 2018, Hudson responded to Travelers, maintaining its position that it has no duty to contribute toward any settlement because the underlying claim is not covered by its policy." (Id. at 365.) Nevertheless, "in order to support [Nolte] and to avoid future coverage litigation," Hudson offered to "contribute 1/3rd of any settlement offer Travelers[] and Hudson agree to make... in return for Travelers' release of all claims for contribution from Hudson in this case." (Id.) Hudson also offered to pay
On or about April 5, 2018, Travelers settled the Todahl action on behalf of Nolte for $1,300,000.00, with Travelers Indemnity paying the per occurrence limit of $1,000,000.00 under its policy and Travelers Property paying $300,000.00 under its excess policy. (JSUF at 7; see also Doc. No. 21-4 at 8.) Hudson did not contribute toward Nolte's settlement of the Todahl action. (JSUF at 7.) Travelers also incurred defense fees and costs totaling $137,093.06 in defending Nolte in the Todahl action. (Id.)
Plaintiff Travelers Indemnity issued a commercial general liability ("CGL") insurance policy (insurance policy number 680-6B97547A-TCT-12) to Nolte, with effective dates of May 1, 2012 to May 1, 2013 and a per occurrence limit of $1,000,000.00 (the "Travelers policy"). (Id. at 2; Doc. No. 21-4 at 9.) Travelers Indemnity agreed to "pay those sums that [Nolte] becomes legally obligated to pay as damages because of `bodily injury' or `property damage' to which th[e] insurance applies." (JSUF at 94.) However, the Travelers policy "does not apply to: ... `Bodily injury' or `property damage' arising out of the rendering or failure to render any `professional services.'" (Id. at 95, 136.) Under the Travelers policy
(Id. at 136.)
Plaintiff Travelers Property issued a commercial excess liability (or "umbrella") insurance policy (insurance policy number CUP-6B994065-12-47) to Nolte, with effective dates of May 1, 2012 to May 1, 2013 (the "Travelers excess policy"). (Id. at 3.) Pursuant to this policy, Travelers Property agreed to "pay on behalf of [Nolte] the `ultimate net loss' in excess of the `applicable underlying limit' which [Nolte] becomes legally obligated to pay as damages because of `bodily injury,' `property injury,' [or] `personal injury' ... to which this insurance applies." (Id. at 229.) Like the Travelers policy, the Travelers excess policy excludes claims for "`[b]odily injury,' `property damage,' [or] `personal injury'... arising out of the rendering or failure to render any `professional services.'" (Id. at 230, 265.) The Travelers excess policy contains a definition of "professional services" that is identical to the one found in the Travelers policy. (See id. at 265.)
Defendant Hudson issued an "Architects, Engineers & Environmental Services Professional Liability" insurance policy (insurance policy number AEE72460-04) to Nolte, with the effective dates of
Pursuant to that policy, Hudson agreed to "pay on [Nolte's] behalf all sums in excess of the Deductible and up to the Limits of Liability ... that [Nolte] become[s] legally obligated to pay as Damages and Claim Expenses resulting from Claims first made against [Nolte] during the Policy Year, as a result of a Wrongful Act." (Id. at 285) (emphasis omitted). The policy
(Id.) (emphasis omitted). The Hudson policy defines "professional services" as "those services that [Nolte] perform[s] for others, in [its] practice as an architect, engineer, land surveyor, interior designer, landscape architect, construction manager, scientist, technical consultant or as otherwise defined by endorsement to this Policy." (Id. at 288.) The Hudson policy excludes liability for "Damages and/or Claims Expenses... for, based upon, or arising from actual construction performed by [Nolte], [its] agent, or [its] subcontractor, including, but not limited to, performing construction, erection, fabrication, installation, assembly, manufacture, demolition, dismantling, drilling, excavation, dredging, remediation, or supplying any materials, parts or equipment." (Id. at 289.)
On May 25, 2018, Travelers commenced this action against Hudson, alleging that Hudson was obligated to defend and indemnify Nolte in the Todahl action because Nolte's liability arose out of professional services that it rendered on the Project. (Doc. No. 1 at 10.) Travelers alleged that it was therefore entitled to reimbursement and indemnification for the entire settlement amount it paid on Nolte's behalf as well as half of the defense fees and costs it incurred in defending Nolte. (Id. at 11.) Travelers' complaint asserts causes of action for equitable indemnity, partial equitable indemnity, and equitable contribution. (Id. at 10-13.)
On March 15, 2019, Travelers and Hudson filed cross-motions for summary judgment. (Doc. Nos. 16, 17, 18.) On April 16, 2019, the parties filed their respective oppositions to the other's summary judgment motion. (Doc. Nos. 20, 21.) On April 30, 2019, Travelers filed its reply to Hudson's opposition, and on May 1, 2019, Hudson filed its reply to Travelers's opposition. (Doc. Nos. 23, 25.)
Summary judgment is appropriate when the moving party "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a).
In summary judgment practice, the moving party "initially bears the burden of proving the absence of a genuine issue of
In the endeavor to establish the existence of a factual dispute, the opposing party need not establish a material issue of fact conclusively in its favor. It is sufficient that "the claimed factual dispute be shown to require a jury or judge to resolve the parties' differing versions of the truth at trial." T.W. Elec. Serv., 809 F.2d at 631. Thus, the "purpose of summary judgment is to `pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial.'" Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (citations omitted).
"In evaluating the evidence to determine whether there is a genuine issue of fact," the court draws "all reasonable inferences supported by the evidence in favor of the non-moving party." Walls v. Cent. Contra Costa Cty. Transit Auth., 653 F.3d 963, 966 (9th Cir. 2011). It is the opposing party's obligation to produce a factual predicate from which the inference may be drawn. See Richards v. Nielsen Freight Lines, 602 F.Supp. 1224, 1244-45 (E.D. Cal. 1985), aff'd, 810 F.2d 898, 902 (9th Cir. 1987). Undisputed facts are taken as true for purposes of a motion for summary judgment. Anthoine v. N. Cent. Counties Consortium, 605 F.3d 740, 745 (9th Cir. 2010). Finally, to demonstrate a genuine issue, the opposing party "must do more than simply show that there is some metaphysical doubt as to the material facts.... Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no `genuine issue for trial.'" Matsushita, 475 U.S. at 587, 106 S.Ct. 1348 (citation omitted).
Travelers contends that, as a matter of law, Hudson must reimburse it for the
Hudson first contends that the causes of action Travelers asserts here—for equitable indemnity, partial equitable indemnity, and equitable contribution—are not legally viable claims because the Hudson and Travelers policies do not insure against the same risk. (Id. at 16; Doc. No. 21 at 16.) Hudson argues that the only viable claim available to Travelers was for equitable subrogation, which it has not asserted. (Doc. No. 17 at 16-17.) Thus, Hudson argues that Travelers' complaint fails as a matter of law.
The court concludes that this argument fails because it is based upon a misinterpretation of the relevant law.
Fireman's Fund Ins. Co. v. Commerce & Indus. Ins. Co., No. C-98-1060VRW, 2000 WL 1721080, at *2 (N.D. Cal. Nov. 7, 2000) (quoting Herrick Corp. v. Canadian Insurance Co., 29 Cal.App.4th 753, 756, 34 Cal.Rptr.2d 844 (1994)). Nevertheless, distinguishing between these three equitable theories of recovery is of import because, depending on the facts involved in a particular action, a claim brought under the wrong theory may fail as a matter of law. For example, "the right to contribution arises when several insurers are obligated to indemnify or defend the same loss or claim, and one insurer has paid more than its share of the loss or defended the action without any participation by the others." Fireman's Fund Ins. Co. v. Maryland Cas. Co., 65 Cal.App.4th 1279,
Here, the undisputed evidence before the court on summary judgment establishes that Travelers and Hudson did not insure Nolte against the same risk. (See, e.g., Doc. No. 1 at 8-9) ("[T]he carriers do not insure the same risk. The Travelers Policy is a general liability policy whereas the Hudson Policy is a professional liability policy."). Travelers therefore cannot assert a cause of action for equitable contribution. See Maryland Cas. Co., 65 Cal. App. 4th at 1282, 77 Cal.Rptr.2d 296. Because there is no genuine dispute as to this issue, the court will grant Hudson's cross-motion for summary judgment to the extent it contends that Travelers cannot assert such a claim.
For the reasons that follow, however, the court finds that Hudson is incorrect, as a matter of law, in arguing that Travelers cannot assert a cause of action for equitable indemnification and, instead, could only have asserted a cause of action for equitable subrogation. In advancing this argument Hudson relies heavily on the decision in Maryland Casualty to assert that, "[s]imilar to contribution claims, indemnity claims are also not available between carriers who insure different risks. This is because California courts refer to equitable contribution and equitable indemnity interchangeably." (Doc. No. 21 at 17) (citing Maryland Casualty, 65 Cal. App. 4th at 1295, 77 Cal.Rptr.2d 296) (emphasis omitted). Hudson's reliance on Maryland Casualty is unavailing, however, because the state appellate court there did not refer to equitable contribution and equitable indemnity "interchangeably." Indeed, that court never once mentioned—let alone analyzed—equitable indemnification, and instead merely discussed the differences between equitable contribution and equitable subrogation. See generally Maryland Cas. Co., 65 Cal.App.4th 1279, 77 Cal.Rptr.2d 296. More importantly, Hudson is simply incorrect as a matter of law. As discussed above, courts in California recognize that a claim for equitable indemnification is different than a claim for equitable contribution. See also St. Paul Fire
Here, Travelers' contention is that Hudson should have provided coverage to Nolte in the underlying action because Todahl's allegations against Nolte fell within the scope of the Hudson policy's insuring clause, and not the Travelers policy's insuring clause. Indeed, counsel for Hudson agreed at the hearing on the pending motions that "there are two policies [at issue here] that insure different risks; one of them applies and one of them doesn't." Plainly then, Travelers may assert a claim for equitable indemnification. See, e.g., Commerce & Indus. Ins. Co., 2000 WL 1721080, at *3 ("Equitable indemnification... enables an insurer that has paid an obligation which was entirely the responsibility of a co-insurer to place the complete burden for the loss on that other party."). Accordingly, the undersigned concludes that Travelers may proceed on its equitable indemnification claim against Hudson. Because there is no genuine dispute as to whether Travelers can assert a cause of action for equitable indemnification, the court will deny Hudson's summary judgment motion to the extent that it seeks to establish that Travelers, as a matter of law, cannot assert such a claim.
Having determined that Travelers may proceed on its equitable indemnification claim against Hudson, the court will now address the substance of Travelers motion for summary judgment. That is, the court will evaluate whether, as a matter of law, Hudson is obligated to reimburse Travelers for any portion of the defense fees and costs that Travelers incurred in Nolte's defense or the amount that Travelers paid to settle the underlying action on behalf of Nolte.
"It is ... a familiar principle that a liability insurer owes a broad duty to defend its insured against claims that create a potential for indemnity." Horace Mann Ins. Co. v. Barbara B., 4 Cal.4th 1076, 1081, 17 Cal.Rptr.2d 210, 846 P.2d 792 (1993), as modified on denial of reh'g (May 13, 1993). "[T]he [insurer] must defend a suit which potentially seeks damages within the coverage of the policy." Gray v. Zurich Ins. Co., 65 Cal.2d 263, 275, 54 Cal.Rptr. 104, 419 P.2d 168 (1966). "The determination [of] whether the insurer owes a duty to defend usually is made in the first instance by comparing the allegations of the complaint with the terms of the policy." Horace Mann, 4 Cal. 4th at 1081, 17 Cal.Rptr.2d 210, 846 P.2d 792. In analyzing the policy, "courts must consider both the [] language in the policy, and the endorsements or exclusions affecting coverage, if any, included in the policy terms." Modern Dev. Co. v. Navigators Ins. Co., 111 Cal.App.4th 932, 939, 4 Cal.Rptr.3d 528 (2003), as modified (Aug. 29, 2003), as further modified (Sept. 18, 2003). "Facts known to the insurer and extrinsic to the third party complaint can generate a duty to defend, even though the face of the complaint does not reflect a potential for liability under the policy." Montrose Chem. Corp. v. Superior Court, 6 Cal.4th 287,
"The insurer's defense duty is obviated where the facts are undisputed and conclusively eliminate the potential the policy provides coverage for the third party's claim." Reg'l Steel Corp. v. Liberty Surplus Ins. Corp., 226 Cal.App.4th 1377, 1389, 173 Cal.Rptr.3d 91 (2014). To prevail in an action for declaratory relief with respect to the duty to defend, "the insured must prove the existence of a potential for coverage, while the insurer must establish the absence of any such potential." Id. at 300, 24 Cal.Rptr.2d 467, 861 P.2d 1153. "Facts merely tending to show that the claim is not covered or may not be covered, but are insufficient to eliminate the possibility that resultant damages (or the nature of the action) will fall within the scope of coverage ... add no weight to the scales." Montrose Chem., 6 Cal. 4th at 300, 24 Cal.Rptr.2d 467, 861 P.2d 1153.
Accordingly, for Hudson to establish that it had no duty to defend Nolte in the underlying action, it must show that the underlying claims do not fall within the Hudson policy's coverage. This it cannot do. Hudson acknowledged that the Todahl action was potentially covered under the Hudson policy while that action was still pending. (See JSUF at 347) (noting by way of letter dated November 2, 2017 that "[Hudson] ha[s] determined that there may be a potential of coverage"). Because an insurer "must defend a suit which potentially seeks damages within the coverage of [its] policy" Gray, 65 Cal. 2d at 275, 54 Cal.Rptr. 104, 419 P.2d 168, the undersigned concludes that Hudson was obligated to partake in Nolte's defense in the Todahl action.
After acknowledging a potential for coverage, Hudson offered to pay only one half of all defense fees incurred after September 5, 2017—the date when Travelers retendered the Todahl action to Hudson— arguing that "Travelers ha[d] been involved and ha[d] controlled the defense of th[e] case since 2014" and that Hudson had closed its file at Nolte's request. (JSUF at 365.) To the extent that Hudson is arguing that it should only be required to pay for half of the defense fees incurred after Travelers' retender, its position is not persuasive. It is undisputed on summary judgment that both Nolte and Travelers first tendered the Todahl action to Hudson in or around October of 2014. (Doc. No. 21-4 at 6.) It is further undisputed that Travelers obtained counsel to defend Nolte in the Todahl action in or around the same time as it first tendered the defense of that action to Hudson. (Id.) Moreover, it was clear from the outset of the underlying action in state court that Todahl's claims against Nolte were potentially covered under Hudson's professional services insurance policy because Todahl alleged in that action that Nolte "had a responsibility to supervise the job and ensure that the job was being performed in a safe manner and in compliance with state and federal regulations[] because [Nolte] ... w[as] responsible for providing construction management and/or general contractor services for the [Project]." (Id. at 337) (emphasis added); see also Storek v. Fid. & Guar. Ins. Underwriters, Inc., 504 F.Supp.2d 803, 812 (N.D. Cal. 2007) ("Under California law, an insurer's duty to defend is determined by those facts known by the insurer at the inception of a third party lawsuit, ... or from the facts and inferences known to an insurer from the pleadings, available information and its own investigations at the time of the tender of defense.") (emphasis and citations omitted), aff'd, 320 F. App'x 508 (9th Cir. 2009). Because "[t]he defense duty is a continuing one, arising on tender of defense and lasting until the underlying lawsuit is concluded
For these reasons and based upon the undisputed evidence before the court on summary judgment, the undersigned concludes that Hudson had a duty to defend Nolte in the Todahl action. Because there is no genuine dispute as to this fact, the court will grant Travelers' summary judgment motion to the extent that it seeks to establish that Travelers, as a matter of law, is entitled to half of the defense fees and costs that it incurred in defending Nolte.
Accordingly, Hudson is to reimburse Travelers for half of the $137,093.06 it expended in defending Nolte, or $68,546.53.
The court next evaluates whether Hudson had a duty to indemnify Nolte in the underlying action, such that Hudson is now obligated to equitably indemnify Travelers for the $1,300,000.00 that Travelers paid to settle Todahl's claims against Nolte in the underlying state court action.
"[An] insurer's duty to indemnify runs to claims that are actually covered, in light of the facts proved." Buss v. Superior Court, 16 Cal.4th 35, 45, 65 Cal.Rptr.2d 366, 939 P.2d 766 (1997). Thus, an insurer's duty to defend its insured is broader than its duty to indemnify its insured in that, as
Nonetheless, Travelers relies on the decision in Safeco Insurance Company of America v. Superior Court, 140 Cal.App.4th 874, 44 Cal.Rptr.3d 841 (2006), and argues that all it need do in order to establish Hudson's duty to indemnify is to demonstrate that the underlying claims are potentially covered under the Hudson policy and that the burden then shifts to Hudson to prove the absence of actual coverage. (Doc. No. 18 at 20.) Travelers' reliance on Safeco in support of this argument is misplaced. In that case, the California Court of Appeal held that
Safeco, 140 Cal. App. 4th at 881, 44 Cal.Rptr.3d 841 (emphasis added). As evidenced by this quoted language, the court in Safeco articulated this standard only with respect to claims for equitable contribution. As discussed above, however, here Travelers cannot assert a claim for equitable contribution because the policies at issue in this action cover different risks. Travelers has pointed the court to no authority, and the court is aware of none, for the proposition that the Safeco burden-shifting framework for equitable contribution claims applies to claims for equitable indemnity. Accordingly, the court will evaluate whether Travelers has established that the underlying claims were actually covered by the Hudson policy, in line with the case law discussed above.
In this regard, Travelers contends that Hudson's professional services policy covers the underlying action because Todahl's claims against Nolte arose from Nolte's professional services. (Doc. No. 18 at 2.) Travelers also argues that its commercial general liability and excess policies do not cover the underlying action because they contain professional services exclusions. (Id.) Hudson counters that the injuries Todahl suffered did not arise from the rendering of Nolte's professional services, and even if they did, its policy's "actual construction" exclusion precludes coverage.
The parties agree that, on the date Todahl sustained his injuries, representatives of Nolte were at the construction site "for the purpose of providing professional services pursuant to the Construction Management Agreement." (JSUF at 6.) Travelers position is that Nolte's liability arose out of the rendering of its professional services because "Nolte's employee ... instructed Todahl to clean out the paving troughs to ensure the consistency of the cement was compliant with specifications." (Doc. No. 18 at 22-23.) This, Travelers argues, constitutes a "professional
As an initial matter, the court notes that Travelers has provided no support for its position that Nolte's liability arose out of the rendering of its professional services. Travelers' argues that because (1) "courts have defined `professional services' as those `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,'" and (2) "[t]he instruction [at issue] arose out of a professional construction management vocation[] [that] was based on specialized knowledge of cement specifications ... and [] involved a skill that was predominantly mental," the instruction therefore arose out of Nolte's professional services. (Doc. No. 18 at 21) (quoting Tradewinds Escrow, Inc. v. Truck Ins. Exch., 97 Cal.App.4th 704, 713, 118 Cal.Rptr.2d 561 (2002)). Travelers' argument is not persuasive. It is not the case that any task Nolte employees completed while working on the Project was within the scope of Nolte's professional services. The decision in Blumberg v. Guarantee Insurance Company, 192 Cal.App.3d 1286, 238 Cal.Rptr. 36 (1987), is instructive in this regard. In that case, an attorney, insured under a professional liability policy for claims arising out of acts or omissions in rendering or failing to render professional services for others in his capacity as a lawyer, tendered his defense of his former law partner's breach of partnership lawsuit to his insurer. Id. at 1290-91, 238 Cal.Rptr. 36. In finding that the professional services insurance policy at issue there did not provide coverage for the breach of partnership lawsuit, the court noted that, "at the time Blumberg made the alleged misrepresentations [to his law partner], he was not rendering professional services `for others,' nor acting in his `capacity as a lawyer.'" Id. at 1292-93, 238 Cal.Rptr. 36. Rather, the court found "Blumberg was acting in his capacity as Zommick's law partner and the fact that he happened to be a lawyer was of no import what[so]ever." Id. at 1293, 238 Cal.Rptr. 36. A similar rationale applies here because even though Nolte's engineers were onsite on the day of Todahl was injured, as discussed below, when Nolte's employee instructed Todahl to clean out the troughs, that employee was not acting within the scope of Nolte's professional services.
Pursuant to the CMA—the agreement defining the scope of Nolte's professional services with regard to the Project—Nolte was to "furnish a licensed Civil Engineer as Construction Manager" and to "competently and thoroughly provide Construction Management Services" for the Project. (JSUF at 302, 313; Doc. No. 17 at 7.) These services—as defined in Exhibit A to the CMA, "DRAFT SCOPE OF CONSULTANT SERVICES"—included "construction observation, materials testing, and contract administration" for the Project, as well as "structural observation services, roadway observation services, survey quality assurance, [and] materials testing and support staff, as needed, during the course of the construction." (JSUF at 313.) To the extent that Nolte observed that construction was not taking place in accordance with the Project's plans or specifications, the CMA required Nolte to
(JSUF at 314-15) (emphasis added). Thus, the CMA expressly noted that Nolte is not responsible for construction means, methods, techniques, sequences or procedures—such as the exact manner the cement troughs needed to be cleared—nor is Nolte responsible for safety precautions.
That Nolte's professional services did not include giving the instruction that Todahl alleged he received from a Nolte employee is further bolstered by three uncontroverted declarations from Nolte engineers that Hudson has attached to its cross-motion for summary judgment. Joey Carrol, a Nolte field engineer who was working on the Project on the day of the incident, avers in his declaration that: (1) his duty was to observe the Project to make sure it complied with the plans; (2) neither he, nor any other field engineer to his knowledge, exercised control over how the contractors' laborers did their jobs; and (3) that directing laborers on how to do their jobs "was not part of Nolte's professional services on the [] Project." (Doc. No. 17-8 at 1-2.) Tiffany Goodwin, a Nolte field engineer who was working on the Project as the lead field engineer on the day of the incident, avers that she is familiar with the job responsibilities of Nolte's field engineers, that Nolte was hired to observe, inspect, and report to the City whether work on a particular day complied with the Project's plans and specifications, and that Nolte's engineers had no control over the manner in which the laborers did their jobs. (Doc. No. 17-7 at 1-2.) Goodwin also declares that, prior to the incident, she observed a
Thus, the undisputed evidence before the court on summary judgment establishes that instructing laborers such as Todahl on how often to clean out cement troughs was not within the scope of Nolte's professional services. Because there is no genuine dispute as to this issue, the court will deny Travelers' summary judgment motion to the extent it seeks to establish that the Hudson professional services policy actually covered the underlying state court action.
For the reasons set forth above,
