A New Jersey insurance agency has failed to convince two courts that a landscape gardening insurance policy for a long-time client was ambiguous enough to also cover tree removal.

The agency also struck out with its argument that tree removal coverage existed because the landscaper paid a premium based on its total revenues that included tree removal services.

The policy dispute arose in a case involving a wrongful death. Two workers for RML Construction, Inc., which had a $1.8 million contract to remove trees damaged by Superstorm Sandy, were in a New York park cutting down a damaged tree when Jing-An Liu was struck by a falling branch or trunk while cycling. Liu later died of his injuries. Liu’s estate filed a wrongful death action against RML, its two workers, and New York City, alleging their negligence caused Liu’s injuries and death.

Gotham Insurance Co., affiliated with ProSight Specialty Management Co., declined to cover the wrongful death claim against RML on the grounds that RML’s landscaper insurance policy did not cover tree removal. The company pointed out that tree pruning and tree removal were not permitted classifications under Gotham’s specialty trade contractor program.

RML sued Gotham seeking defense and indemnification in the Liu action, and also sued its long-time insurance agency, Suburban General Insurance Agency, for professional malpractice.

Suburban filed a cross-claim against the insurer Gotham for indemnification and contribution, claiming that RML should be covered because the term landscaping was ambiguous.

Gotham explained that the ISO form for Landscape Gardening —Classification 97047— makes clear this classification involves beautification work such as the design, preparation of ground, including tilling and fertilizing, planting of seeds, shrubs and small trees as well as interior landscaping. Tree care operations, however, are covered under an entirely distinct code —Classification 99777— titled Tree Pruning, Dusting, Spraying, Repairing, Trimming, Fumigating. This classification involves the removal of dead, dangerous or unwanted branches, as well as chipping, removal, and clean-up of fallen branches and other debris. It involves the use of chain saws, pruning shears, chippers and other such devices, which Gotham’s investigation indicated were used by RML.

The trial court sided with the insurer, concluding that Gotham did not owe insurance coverage to RML for its involvement in the tree-removal accident that killed Liu. In rejecting Suburban’s argument that the landscape gardening term was ambiguous, the trial judge found it would be “a tortured interpretation to say the removal of 2,000 trees from multiple locations under a [nearly] $2 million contract is landscape gardening.”

The agency, Suburban, appealed, again alleging that the policy’s language was ambiguous and thus should have been resolved in favor of the insured and that the classifications were broad enough such that landscape gardening could include tree removal. Suburban asserted that Gotham failed to include a definition of landscape gardening in the policy and its representatives could not define landscape gardening.

Suburban’s agent acknowledged he never told Gotham that RML was removing trees. He agreed that a broker should explain to an insured the meaning of a classification code, and acknowledged Suburban’s responsibility for verifying the correct classification code was included in RML’s insurance policy.

Nonetheless the agent said coverage should also apply because he believed RML’s premium was calculated based on RML’s gross receipts, revenue that was earned in part by RML’s removal of trees.

According to the insurer Gotham, the insurance agent is responsible for explaining classification codes to the insured and Suburban should have known the classification for landscape gardening does not include tree removal. Its specialty trade contractor program did not provide coverage for any arborist classifications, although landscape gardening would include “light pruning of small shrubs and trees,” the insurer explained.

In agreeing with the conclusion of the trial court, the Superior Court said that Gotham was not required to provide a definition in the policy for landscape gardening “any more than it was required to provide a definition for painting steel bridges or concrete work. A commonsense interpretation of landscape gardening does not include tree removal on a massive scale.”

In any event, the court added, the ISO form defines the term and that while the insurer’s representatives acknowledged there was more than one definition of the term, no definition included large-scale tree removal.

Also, the appeals court dismissed the premium argument because tree removal was not a permitted classification and the premium was purely based on RML’s gross receipts, with no consideration of the type of work performed.

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