                     United States Court of Appeals,

                             Eleventh Circuit.

                                   No. 94-8219.

       CONTINENTAL CASUALTY COMPANY, Plaintiff-Appellant,

                                         v.

   HSI FINANCIAL SERVICES, INC., et al., Defendants-Appellees.

                                  Aug. 17, 1995.

Appeal from the United States District Court for the Northern
District of Georgia (1:91-CV-2022-MHS); Marvin H. Shoob, Judge.

Before TJOFLAT, Chief Judge, ANDERSON, Circuit Judge, and MORGAN,
Senior Circuit Judge.

     PER CURIAM:

     CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE
     ELEVENTH CIRCUIT TO THE SUPREME COURT OF GEORGIA PURSUANT TO
     ARTICLE VI SECTION 6 PARAGRAPH 4 OF THE GEORGIA CONSTITUTION.

     TO THE SUPREME COURT OF GEORGIA AND ITS HONORABLE JUSTICES:

     It appears to the United States Court of Appeals for the

Eleventh   Circuit    that    the    resolution     of   this   case   involves

questions of Georgia law that are dispositive but unanswered by

controlling   precedent      of    the   Supreme   Court   of   Georgia.      We,

therefore, defer our decision in this case pending certification of

the following question to the Supreme Court of Georgia pursuant to

Ga. Const. art. VI, § 6, para. 4, O.C.G.A. § 15-2-9, and Rule 37 of

the Supreme Court of Georgia.

                                         I.

     Continental      Casualty      Company   ("Continental")       appeals    a

declaration of rights and obligations that it has a duty to defend

Page, Sevy & Henderson, P.C., Joseph Francis Page, Jerry Sevy, and

William L. Henderson in an underlying action brought against them
by HSI Financial Services, Inc. ("HSI") in the Superior Court of

Fulton   County,    Georgia.1    Continental   insured   Page,   Sevy   &

Henderson, P.C., Joseph Francis Page, Jerry Sevy, and William L.

Henderson under a lawyers professional liability policy.2           The

policy provides that Continental will pay "all amounts ... which

[the insured] become legally obligated to pay as a result of a

wrongful act by [the insured]."      A "wrongful act" is defined as

"any negligent act, error or omission in ... the rendering of or

failure to render professional services."3        The language of the

policy at issue, the exclusion known as "D3," is as follows:
     II. EXCLUSIONS

           We will not defend or pay, under this Coverage Part for:

                   ....

                   D. any claim arising out of:

                   ....



     1
      Although the district court had before it cross motions for
summary judgment and indicated that it was ruling on summary
judgment posture, the court ruled on nothing more than the
pleadings. The district court's order, therefore, is more
accurately characterized as a declaratory judgment based on the
pleadings. This, however, was appropriate because, under Georgia
law, a court looks to the allegations contained in the complaint
when resolving the duty to defend issue. See, e.g., Loftin v.
United States Fire Ins. Co., 106 Ga.App. 287, 127 S.E.2d 53, 58
(1962).
     2
      The law firm of Page, Sevy & Henderson was incorporated in
1988. Page, Sevy, and Henderson were the only members of the
firm. On February 6, 1991, Page voluntarily surrendered his
license to practice law.
     3
      "Professional services" are considered "services rendered
in [the insured's] capacity as a lawyer, real estate title
insurance agent or notary public. This also includes ... acts as
an administrator, conservator, executor, guardian, trustee,
receiver, or in any other similar fiduciary activity."
                   3. any dishonest, fraudulent, criminal or malicious
                   act or omission by you or any of your partners,
                   officers, stockholders or employees....

     HSI collects unpaid medical bills for healthcare providers.

In 1985, Joseph Page entered into a contract with HSI to pursue
delinquent accounts for HSI, place any payments collected into a

trust account, and pay to HSI all of the funds collected minus

attorney's fees (thirty percent of collections) and expenses.                   In

1988,    Page,   Sevy   &   Henderson    incorporated       as    a   professional

corporation, and HSI transferred its accounts to the law firm under
the 1985 contract.

     Beginning in the fall of 1990 and continuing until January

1991, Page and the law firm continued to receive payments, but

failed to deliver to HSI any of the collected amounts.                   Despite a

written demand, Page and the law firm have not delivered the funds

to HSI.    On February 4, 1991, HSI filed a multi-count complaint in

Fulton    County   Superior      Court   against      the   law   firm    and   the
individual defendants alleging that the defendants owed HSI over

$500,000. The complaint's primary allegation is that Page withdrew

trust funds for the purpose of "loaning money to another person."

The complaint was amended twice to include, among other claims, a

claim for professional negligence on the theory that the individual

defendants failed to supervise and ensure the proper accounting of

the trust fund.

     The law firm and the individual defendants forwarded the

complaint to Continental to provide a defense for them under their

insurance    policy.        On   March   4,   1991,    Continental       forwarded

reservation of rights letters to the insured parties.                    Believing
that HSI's claims may be outside the coverage provided by the

policy, Continental filed a Petition for Declaratory Judgment, in

accordance with Richmond v. Georgia Farm Bureau Mutual Insurance

Co., 140 Ga.App. 215, 231 S.E.2d 245, 248-49 (1976), to determine

the rights and liabilities of the parties under the policy, in the

United States District Court for the Northern District of Georgia

on August 22, 1991.    On March 29, 1993, the district court ruled

that Continental has a duty to defend the law firm and Page, Sevy,

and Henderson in the action filed by HSI.    Judgment was entered the

next day, and Continental's motion for reconsideration was denied

on January 19, 1994.   Continental now appeals.

                                II.

     Page's alleged theft of the funds clearly falls within the

plain language of the D3 exclusion.         Georgia law's treatment,

however, of the alleged negligence of Page's law partners is

unclear.   Continental asserts that the partners' negligence also

falls under the language of the D3 exclusion because the language

covers "any claim arising out of" "any dishonest, fraudulent,

criminal or malicious act or omission by you or any of your

partners, officers, stockholders or employees."       Factually, the

professional malpractice claim "arises out of" Page's theft of the

funds.   The language of the exclusion is arguably broad enough to

include derivative claims.

          In terms of proximate causation, the dishonest and
     criminal act of [Page] in misappropriating the escrowed funds
     was, of course, the direct and precipitating cause of the
     loss; no loss would have occurred had [Page] not stolen the
     money. Although the negligence of [Sevy and Henderson] may
     have facilitated [Page's] theft of the funds and been a
     contributing cause of the loss in that sense, it was indirect
     and remote at best.
Aragona v. St. Paul Fire & Marine Ins. Co., 281 Md. 371, 378 A.2d

1346, 1350-51 (1977) (applying a comparable policy exclusion to

similar facts).     Furthermore, by claiming that the other partners

were negligent in failing to supervise, every loss could be brought

within coverage.

       The insured parties and HSI contend that if there is more than

one ground of liability, one being covered by the policy while the

other is excluded, the insurer is obligated to defend.                   Babcock &

Wilcox Co. v. Parsons Corp., 430 F.2d 531, 537 (8th Cir.1970).

They   posit    that,    under   Georgia     law,     Sevy's    and   Henderson's

negligence are independent and concurrent causes for the loss and

coverage should be provided.           Gosser v. Diplomat Restaurant, Inc.,

125 Ga.App. 620, 188 S.E.2d 412, 415-16 (1972);                Tallman v. Green,

74 Ga.App. 731, 41 S.E.2d 339, 341 (1947).

       Because we find that the resolution of this appeal involves a

question of Georgia law unanswered by precedent of the Supreme

Court of Georgia, we respectfully certify the following question to

the Supreme Court of Georgia:

            DOES A CLAIM FOR A LAW PARTNER'S NEGLIGENCE WITH RESPECT
       TO SUPERVISING AND MITIGATING A FELLOW PARTNER'S CRIMINAL ACT
       "ARISE OUT OF" "ANY DISHONEST, FRAUDULENT, CRIMINAL OR
       MALICIOUS ACT" WITHIN THE MEANING OF THIS INSURANCE POLICY
       EXCLUSION?

       We do not intend the particular phrasing of this question to

limit the Supreme Court of Georgia in its consideration of the

certified issue.         To assist the court's consideration of the

matter,   the   record    and    the    briefs   of    the     parties   shall   be

transmitted to the Supreme Court of Georgia.

       QUESTION CERTIFIED.
