R&G Invs. & Holdings, LLC v. Am. Family Ins. Co.

• Decision Date: 09 June 2016
• Docket Number: A16A0399
• Citation: 337 Ga.App. 588,787 S.E.2d 765
• Court: Georgia Court of Appeals
• Parties: R&G Investments & Holdings, LLC v. American Family Insurance Company.

337 Ga.App. 588

787 S.E.2d 765

R&G Investments & Holdings, LLC

v.American Family Insurance Company.

A16A0399

Court of Appeals of Georgia.

June 9, 2016

Reconsideration Denied June 28, 2016.

Kenneth C. Pollock, Atlanta, for Appellant.

James Felting Taylor III, Fain, Major & Brennan, Atlanta, for Appellee.

BARNES

, Presiding Judge.

R&G Investments & Holdings, LLC sued American Family Insurance Company, seeking insurance payments and bad faith penalties for American Family's refusal to pay claims for losses to certain residential apartment buildings caused by vandalism and water damage. Following discovery, R&G Investments moved for partial summary judgment on its claim related to one of the vandalized buildings (Building S) and for summary judgment on American Family's related defenses, including a defense based on the insurance policy's vacancy exclusion. Concluding that genuine issues of material fact existed on the claim and defenses pertaining to Building S, the trial court denied R&G Investments's motion for partial summary judgment and its subsequent motion for reconsideration. R&G Investments later moved for partial summary judgment on its claim related to the building that had sustained water damage (Building T), and American Family cross-moved for summary judgment on the ground that the claim was barred by the policy's vacancy exclusion. The trial court denied R&G Investments's motion for partial summary judgment and granted American Family's cross-motion for summary judgment on the water-damage claim pertaining to Building T.

On appeal, R&G Investments challenges these summary judgment rulings by the trial court. For the reasons discussed below, we conclude that the uncontroverted evidence of record showed that Building S was under renovation at the time it was vandalized, and that, as a result, the insurance policy's vacancy exclusion did not bar coverage of the vandalism loss to that building. Accordingly, we reverse the trial court's denial of summary judgment to R&G Investments on American Family's vacancy-exclusion defense to that specific claim.¹ We affirm the trial court's summary judgment rulings in all other respects.

Summary judgment is proper if the pleadings and evidence “show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law[.]” OCGA § 9–11–56 (c)

. “On appeal from the grant or denial of summary judgment, the appellate courts conduct a de novo review, construing all reasonable inferences in the light most favorable to the nonmoving party.” Bank of North Ga. v. Windermere Dev. Inc. , 316 Ga.App. 33, 34, 728 S.E.2d 714 (2012).

So viewed, the record reflects that R&G Investments owns a residential apartment complex insured by American Family. When American Family issued the insurance policy in December 2011, R&G Investments had only recently bought the apartments and had decided to renovate them.

In February 2012, the apartment complex was unoccupied and undergoing extensive renovation at the direction of R&G Investments. The renovations to the individual apartment buildings were in various stages of completion. One night that month, several of the unoccupied apartment buildings, including Building S, were damaged by vandalism. R&G Investments sought coverage for the loss from American Family.

In November 2012, a water pipe burst in one of the apartment units in Building T, causing flooding in that unit and several adjacent ones. The renovations to Building T had been completed by that time, but only one of the eight units in the building had been leased to a tenant. R&G Investments also sought coverage for this loss from American Family.

R&G Investments ultimately sued American Family, seeking payment of the insurance proceeds for the vandalism and water damage to the apartment buildings, as well as bad faith penalties and attorney fees for American Family's refusal to pay the claims. American Family answered, denying liability, and asserted several defenses, including that coverage of the losses was barred by the policy's vacancy exclusion and by R&G Investments's failure to fully cooperate with American Family's investigation of the claims.

Following discovery, R&G Investments moved for partial summary judgment on count 4 of its complaint, which sought recovery for the vandalism loss to Building S, and for summary judgment on several of American Family's related defenses.² R&G Investments argued that the policy's vacancy exclusion was inapplicable to its residential apartment buildings, and that even if it did apply, Building S was undergoing renovations and thus was not “vacant” as defined by the exclusion. R&G Investments further argued that it had fully cooperated with American Family's investigation of its vandalism claim, and that American Family was subject to bad faith penalties as a matter of law.

The trial court denied R&G Investments's summary judgment motion and its subsequent motion for reconsideration. The trial court concluded that the vacancy exclusion was applicable to R&G Investments's apartment buildings and that genuine issues of material fact precluded the grant of summary judgment to R&G Investments on the remaining matters.

R&G Investments later moved for partial summary judgment on count 5 of its complaint, which sought recovery for the loss to Building T caused by the burst water pipe. American Family filed a cross-motion for summary judgment on that count, contending that the uncontroverted evidence showed that coverage for the loss was barred by the policy's vacancy exclusion. The trial court denied R&G Investments's motion for partial summary judgment and granted American Family's cross-motion for summary judgment on count 5 of the complaint. This appeal by R&G Investments followed.

1. At the outset, we note that R&G Investments has set forth several enumerations of error related to the trial court's summary judgment rulings, but the argument in its brief fails to follow the order and number of the enumerations of error, as required by Court of Appeals Rule 25 (c) (1)

. Our requirements for briefs “were created not to provide an obstacle, but to aid parties in presenting arguments in a manner most likely to be fully and efficiently comprehended by this Court; a party will not be granted relief should we err in deciphering a brief which fails to adhere to the required form.” (Punctuation and footnote omitted.) Currid v. DeKalb State Court Probation Dept. , 274 Ga.App. 704, 706, 618 S.E.2d 621 (2005). “Accordingly, if we have missed something in the record or misconstrued an argument, the responsibility rests with counsel” for R&G Investments. (Citation and punctuation omitted.) Pruitt v. State , 323 Ga.App. 689, 690, 747 S.E.2d 694 (2013).

We also note that by order dated November 5, 2015, this Court denied R&G Investments's motion to exceed the 30–page limit for briefs in civil cases. See Court of Appeals Rule 24 (f)

. While R&G Investments's brief complies with this page limitation, R&G Investments at several places in its brief points to the page limitation and refers to pages of the record from the trial court where it raised additional arguments. To the extent that R&G Investments is attempting to incorporate by reference those additional arguments into its appellate brief, that “practice is not approved by this Court[,] and we decline to look in the record for matters which should have been set forth in the brief.” (Punctuation and footnote omitted.) Ellison v. Burger King Corp. , 294 Ga.App. 814, 815, 670 S.E.2d 469 (2008).

2. R&G Investments argues that the trial court erred in concluding that the policy's vacancy exclusion applied to its residential apartment buildings. We disagree.

“In Georgia, insurance is a matter of contract, and the parties to an insurance policy are bound by its plain and unambiguous terms.” Richards v. Hanover Ins. Co. , 250 Ga. 613, 614, 299 S.E.2d 561 (1983)

. “In construing an insurance contract, a court must consider it as a whole, give effect to each provision, and interpret each provision to harmonize with each other.” York Ins. Co. v. Williams Seafood of Albany, Inc. , 273 Ga. 710, 712, 544 S.E.2d 156 (2001). If a provision in the insurance contract is susceptible to more than one reasonable interpretation, the provision should be construed against the insurer. Cincinnati Ins. Co. v. Magnolia Estates, Inc. , 286 Ga.App. 183, 185, 648 S.E.2d 498 (2007)

. However, a party's proposed interpretation of a provision in an insurance contract is not reasonable and should be rejected if it would render a portion of the contract meaningless. Id. The construction and legal effect of an insurance contract are issues of law subject to de novo review on appeal. Infinity Gen. Ins. Co. v. Litton , 308 Ga.App. 497, 498, 707 S.E.2d 885 (2011).

Among other provisions, the insurance policy at issue in this case excluded coverage for property damage caused by vandalism or water if the insured building was “vacant” for more than 60 consecutive days before the loss or damage occurred, but provided that a building under renovation was not considered vacant for purposes of the exclusion. The vacancy exclusion provided that when the policy is issued to the owner of the insured building, the building is considered vacant

unless at least 31% of its total square footage is: (i) Rented to a lessee or sub-lessee and used by the lessee or sub-lessee to conduct its customary operations; and/or (ii) Used by the building owner to conduct customary operations.

The policy defined “operations” as “business activities occurring at the described premises.”

“Under Georgia law, an insurance company is free to fix the terms of its policies as it sees fit, so long as they are not contrary to the law, and it may insure against certain risks while excluding others.” (Citation and punctuation omitted.) Sorema North American Reinsurance Co. v. Johnson , 258 Ga.App. 304, 306, 574 S.E.2d 377 (2002)

. A vacancy...