A number of lawsuits were pursued against an engineering design firm when two pedestrian bridges collapsed on 13 and 14 November 2014 causing death and damage. The court held that these were ‘related claims’ as defined in the engineering firm’s professional indemnity policy. The policy provided that ‘all related claims shall be considered a single claim’.
The policy defined ‘related claims’ as all claims arising out of ‘a single wrongful act’ or ‘multiple wrongful acts that are logically or causally connected by any common fact, situation, event, transaction, advice, or decision’. The claims therefore fell within the $3 million per claim liability limit.
The cause of both events was a failure resulting from a design feature, namely that the notched ends of certain trusses were not mechanically reinforced. It was admitted that the lack of mechanical reinforcement resulted from a miscommunication between the project manager and the project engineer. An investigation by the Occupational Safety and Health Administration concluded that the same structural design flaw caused both bridge failures.
The court rejected an argument that the phrase ‘arising out of’ could be interpreted to require that the proximate cause of the claims must arise solely from the wrongful acts. That would strip the phrase ‘arising out of’ from the broader context of the ‘related claims’ provision.
Focusing on the ‘related claims’ provision, the policy’s plain language directed the court to consider the wrongful acts and whether those wrongful acts involved a common factual nexus.
The court also rejected the argument that the phrase ‘logically connected’ is ambiguous. The phrase is unambiguous if the facts of the case comfortably fit with the commonly accepted definition of this concept. Wrongful acts are logically connected if there are shared facts, circumstances and decisions, as was the case here.
Hardly a surprising decision on the wording and the law. It is comforting to see a court not straining to find ambiguity in plain language.
[The case is Stewart Engineering Inc. v Continental Casualty Co.]