Auto-Owners Ins. Co. v. BRAZELL BUILDERS
Decision Date | 20 October 2003 |
Docket Number | No. 25736.,25736. |
Citation | 356 S.C. 156,588 S.E.2d 112 |
Court | South Carolina Supreme Court |
Parties | AUTO-OWNERS INSURANCE COMPANY and Owners Insurance Company, Plaintiffs, v. CARL BRAZELL BUILDERS, INC., Essex Homes Southeast, Inc., Rex Thompson Builders, Inc., Marc Homebuilders, Inc., Garryle Deas, Veronica Deas, Alma E. Owens, Toni C. Yarber, Ron Thomas, Candace R. Thomas, Henry O. Jacobs Builders, Inc., James Waldon, Lela Waldon, Reginald Perry, Jeanette Perry, Theodore Cole, Susan Irwin, Mike Irwin, Webb Thompson and Diane Thompson, Defendants. |
Grenville Delorme Morgan, Jr., and Larry A. Foster, Jr., of McAngus, Goudelock & Courie, L.L.C., of Columbia, for plaintiffs.
Charnell Glenn Peake, of Peake, Fowler & Associates, P.A., of Columbia, for Defendant Carl Brazell Builders, Inc.; Robert C. Brown, of Brown and Brehmer, of Columbia, for
Defendants Essex Homes Southeast, Inc., Rex Thompson Builders, Inc., and Marc Homebuilders, Inc.; Robert J. Thomas, of Rogers, Townsend & Thomas, P.C., of Columbia, for Defendant Henry O. Jacobs Builder, Inc.; and Robert D. Dodson, of Strom Law Firm, L.L.C., of Columbia, for Defendants Garryle Deas, Veronica Deas, Alma E. Owens, Toni C. Yarber, Ron Thomas, Candace R. Thomas, James Waldon, Lela Waldon, Reginald Perry, Jeanette Perry, Theodore Cole, Susan Irwin, Mike Irwin, Webb Thompson, and Diane Thompson.
CERTIFIED QUESTIONS
This matter is before the Court for the purpose of answering certified questions propounded by the United States District Court for the District of South Carolina.
Plaintiffs Auto-Owners Insurance Company and Owners Insurance Company (Plaintiffs or Insurers) filed this action in federal court seeking a declaratory judgment against the above-captioned defendants. Specifically, Insurers sought a determination whether their commercial general liability (CGL) policies provide coverage for claims brought by co-defendants Garryle Deas, Veronica Deas, Alma E. Owens, Toni C. Yarber, Ron Thomas, Candace R. Thomas, James Waldon, Lela Waldon, Reginald Perry, Jeanette Perry, Theodore Cole, Susan Irwin, Mike Irwin, Webb Thompson, and Diane Thompson (Claimants) against co-defendants Carl Brazell Builders, Inc., Essex Homes Southeast, Inc., Rex Thompson Builders, Inc., Marc Homebuilders, Inc., and Henry O. Jacob Builders, Inc. (Corporate Defendants or Contractors).
Before 1990, American Newland Associates began developing the Summit Development, an upscale multi-use planned residential subdivision, in Columbia, South Carolina. Ultimately, the developers subdivided the Summit and sold the sites to residential contractors, including Contractors, who then sold property to Claimants.
In August 2001, Claimants filed an amended complaint in state court against Contractors asserting claims for class certification, negligence, gross negligence, recklessness, willful/wanton conduct, negligent misrepresentation, fraudulent concealment, and violations of the South Carolina Unfair Trade Practices Act. They alleged the Summit construction site was once called "the Pontiac Precision Range" and was used by the United States Department of Defense (DOD) as a training site for aerial bombing during World War II. The DOD's assessment and evaluation of the Pontiac Precision Range disclosed the presence of potentially hazardous materials on the property. Claimants alleged that, in spite of the presence of potentially hazardous materials, the development continued and developers sold lots to residential contractors, including Contractors.
The following is specified in the Order of Certification:
All of the plaintiffs' allegations in the underlying Amended Complaint arise out of the theory that the contractors and homebuilders, including the corporate defendants, knew of the presence of hazardous materials at the Summit property and failed to disclose information prior to each claimant's purchase of their respective homes. All of the damages claimed in the underlying case are economic in nature and some of the damages arise out of the diminution in value of the plaintiffs' respective properties caused by the potential presence of the allegedly hazardous materials.
Insurers are defending Contractors in the underlying state court litigation under a reservation of rights. They assert in the current action that the CGL policies issued to Contractors preclude coverage for the claims in the underlying litigation.
The subject CGL policies provide, in part, as follows:
The Court accepted the following four certified questions from the United States District Court for the District of South Carolina:
DISCUSSION
I. Do the subject CGL policies obligate the plaintiffs to indemnify and defend the corporate defendants for the claims of the claimants which are economic in nature and based solely on the diminution in value of the claimants' respective properties?
Insurance policies are subject to the general rules of contract construction. B.L.G. Enterprises, Inc. v. First Financial Ins. Co., 334 S.C. 529, 514 S.E.2d 327 (1999)....
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