Texas professional services, j.(4), j.(5), j.(6), k. exclusions

In Essex Ins. Co. v. McFadden, No. 6:09-cv-193 (E.D. Tex. June 3, 2010), the insured was hired to perform welding repairs to a trough used for disposing of flammable materials.  During welding operations, a fire occurred resulting in property damage to the trough as well as other components of the disposal system.   The insured was sued for the cost to repair the property damage.  The CGL insurer denied a defense relying on numerous exclusions and filed a declaratory judgment action.  The federal trial court held that none of the exclusions eliminated the insurer’s duty to defend.  The court ruled in turn:

(a)        the professional services exclusion did not eliminate a duty to defend because the insurer failed to prove that welding constituted a professional service;

(b)       exclusion j(4) did not eliminate a duty to defend because the underlying complaint did not allege that the insured exercised dominion and control over the rough or related components;

(c)       exclusion j(5) did not eliminate a duty to defend because, while the underlying complaint did allege that the insured was performing operations on the trough, it did not allege that the insured was performing operations on the other components of the disposal system that there damaged;

(d)       exclusion j(6) did not eliminate a duty to defend because “that particular part” was limited to the trough and did not include the other components of the disposal system that there damaged; and

(e)        exclusion (k) did not eliminate a duty to defend because the trough was not “handled” by the insured within that undefined term’s dictionary definition of “dealt in” or “traded by.”