Food Pro International, Inc. v. Farmers Ins. Exchange

In Food Pro International, Inc. v. Farmers Ins. Exchange (2008) 169 Cal.App.4th 976, 985, Food Pro was a consulting firm hired by Mariani Packing Company to assist in relocation of its operations to a new plant. (Food Pro, supra, 169 Cal.App.4th at p. 979.) Part of Food Pro's work was to act as Mariani's representative in dealing with contractors and suppliers, to coordinate contractor activities on the project, and to make on-site inspections of the work to determine whether it was proceeding properly. A contractor removed a piece of equipment from the mezzanine of the plant, leaving a hole in the floor. Aamold, an employee of Food Pro, noticed this and notified employees of Mariani, who covered the hole, but did not bolt down the covering. Pettigrew, an employee of another contractor, fell through the hole and was severely injured. (Id. at p. 980.) Pettigrew and his workers' compensation insurer made claims against Food Pro, alleging general negligence and premises liability. Farmers Insurance, which had issued Food Pro's CGL policy, denied coverage, based on the professional services exclusion. (Food Pro, supra, 169 Cal.App.4th at p. 981-982.) That exclusion provided that the policy did not apply to "'"bodily injury," ... arising out of the rendering or failure to render any professional services by or for you, including: 1. The preparing, approving, or failing to prepare or approve maps, drawings, opinions, reports, surveys, change orders, designs, specifications; and 2. Supervisory, inspection or engineering services.'" (Id. at p. 981.) Food Pro sued Farmers Insurance; the trial court found the bodily injury arose out of Food Pro's rendering of supervisory services, and was therefore excluded from coverage. Because there was no potential for coverage, there was no duty to defend. (Id. at p. 984.) The court reversed. It acknowledged that Food Pro provided professional services to Mariani. There was evidence, however, that Farmers Insurance was advised from the outset that it was Mariani's responsibility to cover the hole in the floor, and Food Pro was not required to protect workers from injury or to ensure the safety of the site. (Id. at p. 987.) Food Pro was to determine when each piece of equipment was to be disconnected, but the individual contractors determined how to complete each project. Food Pro's supervisory role was limited to coordination of the overall process, and the contractors were responsible for the details of their work. (Ibid.) The court concluded "Aamold was not providing supervisory or engineering services, or any other specialized skill, in relation to Pettigrew's accident." (Id. at p. 988.) "Food Pro's facts instead suggest Aamold's involvement in the accident was merely as an observer who noticed the danger and notified the responsible party. Thus, any failure to rectify the situation or warn of the danger, as alleged in the Pettigrew complaint, would implicate only ordinary negligence." (Ibid.) The court rejected Farmers' contention that Aamold was only on site to perform professional duties, so any act of his on site that resulted in injury arose from a professional service. After reviewing Hollingsworth, Tradewinds, and similar cases, the court summarized: "With this background, we read Tradewinds's summation of the reach of the professional services exclusion as follows: the act that precipitated the injury need not have been one of professional malpractice, as long as the plaintiff was injured in the performance of the professional service." (Id. at p. 991.) The court concluded: "The injury in each case cited arose from the performance of a professional service, not merely at the same time the insured was otherwise providing professional services to a third party. Here, the only link between Food Pro's rendering of engineering services and Pettigrew's injury is that the allegedly wrongful actions occurred while Food Pro was on site to provide professional services to Mariani. As Food Pro's evidence shows, it did not design or direct the removal of the extruder, nor did it direct Pettigrew's actions on March 5 as part of its professional services. In other words, Aamold's involvement in the Pettigrew incident arose from his presence at the site, but the injury did not 'arise out of the rendering or failure to render any professional services.'" (Food Pro, supra, 169 Cal.App.4th at p. 991.) The action brought against Food Pro created a potential for a covered liability under the Farmers CGL policy, and therefore Farmers had a duty to defend. (Food Pro, supra, 169 Cal.App.4th at p. 991.) In Food Pro, the acts of Food Pro's employee fell outside the professional services exclusion not because reporting a safety hazard was a task that did not require special skill, but because the employee was not performing services pursuant to Food Pro's contract with its client when he made the report. He was merely acting "as an observer, who noticed the danger and notified the responsible party." (Food Pro, supra, 169 Cal.App.4th at p. 988.)