Integrated Technologies, Inc.
Crum & Forster Specialty Insurance Company
Appeal from Superior Court, Chittenden Unit, Civil Division.
Robert A. Mello, J.
Palmer of Downs Rachlin Martin PLLC, St. Johnsbury, for
F. Connor of Primmer Piper Eggleston & Cramer PC,
Manchester, New Hampshire, and Gary S. Kull of Kennedys CMK,
Basking Ridge, New Jersey, for Defendant-Appellee.
PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll,
1. Integrated Technologies, Inc. (ITI) appeals from the trial
court's summary judgment decision in favor of Crum &
Forster Specialty Insurance Company (Crum). ITI alleged that
Crum breached its duty to defend ITI against a suit brought
by the GOAD Company. The court granted summary judgment to
Crum, finding no claim in the GOAD complaint that was
potentially covered by the policy's Errors &
Omissions (E&O) Liability Coverage Part. ITI asserts that
the court misread the allegations in the GOAD complaint and
interpreted the policy coverage too narrowly. We affirm.
2. ITI is an engineering and project-management firm that
works predominantly in the metals plating and finishing
industry. Crum insured ITI under two policies between March
16, 2014 and March 16, 2016, identical in all relevant
respects and collectively referred to as the policy. The
policy provided E&O liability coverage as well as
commercial general liability and contractors' pollution
3. Generally speaking, an E&O policy is" 'a
specialized and limited type of coverage . . . designed to
insure members of a particular professional group from the
liability arising out of a special risk such as negligence,
omissions, mistakes and errors inherent in the practice of
the profession.'" Crum & Forster Managers
Corp. v. Resolution Tr. Corp., 620 N.E.2d 1073, 1078
(Ill. 1993) (quoting 7A J. Appleman & J. Appleman,
Insurance Law & Practice § 4504.01, at 310 (rev.
1979) (emphasis omitted)). It is" 'the equivalent to
malpractice insurance for occupations other than those in the
legal and medical fields.'" Id. (quoting 11
Couch on Ins. 2d § 44:396, at 573-74 (rev. ed. 1982)).
As Couch explains,
The provision of "professional services," as
defined in professional liability policies, necessarily
entails an application of special learning unique to the
insured's profession. . . .
No matter the occupation of the insured, the terms of the
policies are quite similar, requiring that an act or omission
arise out of the provision of "professional
services" in the context of the particular occupation of
the insured. Accordingly, while certain general principles
can be gleaned which apply to all such policies, the
determination of what constitutes a "professional
service" is unique to each insured profession.
9A S. Plitt, et al., Couch on Ins. § 131:42 (3d ed.
4. By its terms, the E&O policy here covered
"damages" that the insured becomes legally
obligated to pay "because of" a "wrongful
act" to which the insurance applies. Under the policy:
"Wrongful act" means an act, error or omission in
the rendering or failure to render "professional
services" by any insured . . . .
"Professional services" means those functions
performed for others by you . . . that are related to your
practice as a consultant, engineer, architect, surveyor,
laboratory or construction manager.
E&O Part is limited by the policy's "Common
Exclusions," including exclusions for damages based upon
or arising out of "[a]ny criminal, fraudulent, or
dishonest act, omission or offense committed by the
insured" and "[a]ny act, omission or offense
committed by the insured with knowledge of its wrongful
nature or with the intent to cause damage." See
generally 7 Couch on Ins. § 101:22 ("In general, it
is against public policy for an insurance contract to provide
coverage for the intentional or willful misconduct of an
5. GOAD is a vendor of materials and services to customers
with metal plating facilities. In November 2015, GOAD sued
ITI in Missouri state court on four counts: breach of
contract-teaming agreement; breach of contract-commission
agreement; tortious interference with business expectancy;
and injurious falsehood.
6. GOAD alleged the following facts. In 2012, the U.S. Army
requested proposals for an Energy Improvement Project (the
"Project"). Honeywell Building Solutions sought to
be selected as the Project's Energy Service Company
(ESCO). If selected, Honeywell would submit a final proposal,
with pricing, which the Army would accept if fair and
7. The Project included a substantial process-plating
component and Honeywell asked GOAD to work with it to support
its bid. GOAD agreed to do so with the understanding that it
would be Honeywell's sole-source subcontractor as long as
GOAD's pricing was fair and reasonable. GOAD developed
proposed schedules, budgets, and forecasts for the Project,
in addition to securing subcontractors as needed. In late
2012, the Army selected Honeywell as the ESCO and awarded it
the "Right to Bid" for the Project.
8. To support Honeywell's final proposal, GOAD was tasked
with developing detailed scopes of work, with pricing, for
all phases of the process plating improvements. To assist in
this endeavor and in the subsequent work on the Project, GOAD
"found ITI . . . to provide certain engineering and
certain project ...