Court Holds Claims Arising from Zoning Violations Subject to Professional Liability Exclusion, Insurer Not Obligated to Defend or Indemnify

W. World Ins. Co. v. Azoff, Civ. No. 07-00494-BLS2, 2008 WL 4107481 (Mass. Super. Ct. May 15, 2008)

In this case, the Superior Court granted an insurer’s motion for summary judgment and denied the insured contractor’s cross-motion for summary judgment, holding that the insurer was not obligated to defend or indemnify the contractor for a claim brought against it in a separate action, because the claim fell under a professional liability exclusion in the relevant policies.

The insurer issued two commercial general liability policies to the insured renovation and remodeling contractor.  The policies contained an “Engineers, Architects, or Surveyors Professional Liability” exclusion.  The contractor entered into an agreement with a client to build a home.  The contractor then subcontracted with an engineering company to develop a construction plan.  Once the home was completed, the building inspector refused to issue an occupancy permit to the homeowner because the house violated minimum setback requirements mandated by local zoning ordinances.  The homeowner filed a complaint against the contractor and the engineering company, alleging breach of contract, negligence, negligent misrepresentation and violation of M.G.L. c. 93A.  The court held that the homeowner’s claim fell within the policies’ professional liability exclusion, because the complaint arose out of the contractor’s failure to supervise the preparation of an accurate survey of the property.  Accordingly, the court found that the exclusion excused the insurer from defending or indemnifying the contractor in connection with the homeowner’s complaint.