The United States Court of Appeals for the Eleventh Circuit, applying New Jersey law, has held that the series-qualifier (and not the last-antecedent) canon of construction applied in an insurance coverage dispute, such that a limiting phrase at the end of a list of professional services applied to all enumerated services, not just the last one. ECB USA, Inc. v. Chubb Ins. Co. of New Jersey, 113 F.4th 1312 (11th Cir. 2024).
The insurer sold a professional liability policy to the insured, a commercial entity providing accounting services to others. The policy covered claims for wrongful acts, including “[m]anagement consulting services,” which was defined as “accounting, risk and systems analysis, design and implementation, asset recovery and strategy planning for financial institutions.” The insured was sued by its client – a food company – in connection with accounting services provided by the insured to the company. The insurer denied coverage for the claim on the basis that the policy applied to claims involving accounting services provided only “for financial institutions”; in other words, the language “for financial institutions” applied to all of the services enumerated in the policy’s list of management consulting services, not just the last one. The district court granted the insurer’s motion for summary judgment.
The Eleventh Circuit affirmed. In a decision that “comes down to grammar and canons of construction,” the court considered which of two canons of construction should apply: the last-antecedent canon or the series-qualifier canon. Under the last-antecedent canon, the modifier at issue (here, “for financial institutions”) would apply only to the “nearest reasonable antecedent” (here, “asset recovery and strategy planning”). The series-qualifier canon, on the other hand, would apply the modifier to all of the nouns in the series (to include accounting services). The court rejected application of the last-antecedent canon, because, among other reasons: (1) that canon typically is reserved “to help us understand to what a pronoun, relative pronoun, or demonstrative adjective is referring”; and (2) applying that canon would render some of the policy language virtually useless. In context, the court determined that “we are within the heartland of the series-qualifier canon,” namely, “a parallel construction [of nouns] in a series that is followed by a postpositive qualifier. Although, in the court’s view, “the presence of a comma before ‘for financial institutions’ would establish with more certainty that it applies across every term in the list,” the court applied the series-qualifier canon of construction, determining that the “for financial institutions” qualifier must apply to each individual noun listed in the series.
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