Bbl-Mccarthy, LLC v. Baldwin Paving Co., A07A0723.

CourtUnited States Court of Appeals (Georgia)
Citation646 S.E.2d 682,285 Ga. App. 494
Docket NumberNo. A07A0723.,A07A0723.
Decision Date10 April 2007
285 Ga. App. 494
646 S.E.2d 682
No. A07A0723.
Court of Appeals of Georgia.
April 10, 2007.
Reconsideration Denied May 23, 2007.

[646 S.E.2d 683]

Philip W. Savrin, Freeman, Mathis & Gary, David M. Atkinson and Roger D. Martin, Magill & Atkinson, for appellants.

Gray, Hedrick & Edenfield, William E. Gray II, Sommers, Scrudder & Bass, Henry E. Scrudder, Jr., Teddy L. Sutherland, Brennan, Harris & Rominger, Edward R. Stabell III, Weinberg, Wheeler, Hudgins, Gunn & Dial, Allison M. Richardson, Y. Kevin Williams, Christopher T. Byrd, Carlock, Copeland Semler & Stair, Shannon M. Sprinkle, David F. Root, for appellees.

BLACKBURN, Presiding Judge.

In this indemnity and insurance coverage action, BBL-McCarthy, LLC ("BBL") and St. Paul Mercury Insurance Company ("St. Paul")1 appeal the trial court's dismissal of their claims by grant of summary judgment to Baldwin Paving Company ("Baldwin"), Transportation Insurance Company ("TIC") (Baldwin's primary insurer), National Union Fire Insurance Company ("National Union") (Baldwin's excess insurer), Magnum Development, LLC ("Magnum"), and Selective Insurance Company ("Selective") (Magnum's primary and excess insurer). Specifically, BBL and St. Paul argue that the trial court erred in (1) finding that TIC, National Union, and Selective had no duty to defend BBL as an additional insured under their respective insurance policies, (2) finding that TIC, National Union, and Selective had no duty to indemnify BBL as an additional insured, (3) finding that Baldwin and Magnum had no contractual duty to indemnify BBL, and (4) finding that BBL and St. Paul had no right to common law indemnification or contribution

646 S.E.2d 684

against Baldwin and Magnum. For the reasons set forth below, we affirm in part and reverse in part.

Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of [285 Ga. App. 495] law. OCGA § 9-11-56(c); Britt v. Kelly & Picerne, Inc.2 A de novo standard of review applies to an appeal from a grant of summary judgment, and we view the evidence, and all reasonable conclusions and inferences drawn from it, in the light most favorable to the nonmovant. Phillips v. First Bank of Ga.3

So construed, the record shows that the owners of property in north Fulton County sought to develop an office park construction project to be known as Parsons Meadow. Pursuant to a design/build contract, the owners hired BBL as general contractor for the project. Under this contract, BBL was responsible for design and construction of the project and was required to obtain comprehensive general liability insurance coverage. To fulfill this obligation, BBL purchased an insurance policy from St. Paul.

BBL, in turn, subcontracted with Baldwin and Magnum separately to construct a traffic "deceleration lane" leading from Medlock Bridge Road to the construction project driveway. Specifically, Magnum was hired to perform the grading work on the deceleration lane, and Baldwin was hired to perform the paving work. Both subcontracts contained identical insurance provisions, which provided:

The Subcontractor shall purchase from and maintain in a company or companies licensed to do business in the jurisdiction in which the Project is located such insurance as will protect BBL-McCarthy, LLC, the Owner, and their agents from claims which may arise out of or result from the Subcontractor's operations under this AGREEMENT, and for which BBL-McCarthy, LLC, the Owners, as per 1.4 of this agreement and their agents may be held liable, whether such operations be by the Owner, BBL-McCarthy, Subcontractor or by anyone directly or indirectly employed by them or subcontracted with or by anyone for whose acts any of them may be liable. Annexed hereto as Exhibit 5 is a schedule of the kinds of insurance and minimum amounts required to be purchased and maintained by Subcontractor throughout its work on the Project.

The subcontracts also required that BBL and the owners be named as additional insureds on the subcontractors' policies. In addition, the subcontracts contained an indemnification provision, which in part provided:

[285 Ga. App. 496] To the fullest extent permitted by law, the Subcontractor shall defend, indemnify, and hold harmless BBL-McCarthy, the Owner, and their respective agents from and against any and all claims, actions, and liabilities arising out of the performance of the Subcontractor's work, or the acts or omissions of the Subcontractor's employees, agents, or representatives including sub-Subcontractors, or by reason of liability imposed by operation of law, for bodily injury . . . , illness, or death sustained by any person regardless of whether such claim, action, or liability is caused in part by a party indemnified hereunder.

To comply with their obligations under the subcontracts, Baldwin purchased a 1 million primary CGL policy from TIC and a 20 million umbrella policy from National Union. Magnum purchased a 1 million primary CGL policy and a 1 million umbrella policy from Selective. Both of the subcontractors' primary policies named BBL as an additional insured.

On June 29, 2000, two automobiles were involved in a serious accident on Medlock Bridge Road, near the Parsons Meadow construction project. A vehicle driven by Thomas Siragusa collided with a vehicle driven by Bryan Cardarelli. Cardarelli was seriously injured. Siragusa and his three passengers were killed. Cardarelli and the decedents' representatives ("plaintiffs") filed five separate, but nearly identical, lawsuits ("underlying actions") against the owners, BBL, Baldwin, and Magnum, alleging that the deceleration lane leading into the construction project was constructed in a manner that allowed water to pool on the road.

646 S.E.2d 685

When Siragusa's vehicle hit the pooled water, Siragusa lost control, crossed over the median, and struck Cardarelli's vehicle, which was traveling in the opposite direction. In their lawsuits, the plaintiffs alleged that the owners and BBL negligently managed the project, and that BBL, Baldwin, and Magnum negligently constructed the deceleration lane.

By April 2004, all of the underlying actions were settled. All of the parties entered into a collective settlement with Cardarelli. However, BBL and the owners entered into settlement agreements with the decedents' representatives separately from Baldwin and Magnum, who in turn also entered into their own separate settlements with those plaintiffs. BBL's and the owners' settlements of the four remaining claims were funded by BBL's insurer St. Paul. Additionally, the releases between BBL, the owners, and the four remaining plaintiffs specifically indicated that BBL and the owners were settling the claims alleging that they negligently managed or supervised the project.

[285 Ga. App. 497] In October 2004, BBL and St. Paul filed this action against the subcontractors and their insurers to recover the defense costs incurred and settlement payments made by St. Paul in the underlying actions. In their complaint, BBL and St. Paul alleged that the subcontractors' insurers breached their duties to defend and to indemnify BBL as an additional insured in the underlying actions, that the subcontractors breached their duties to provide contractual indemnification to BBL, and that the subcontractors are liable to BBL under common law contribution and indemnity theories. BBL and St. Paul filed a motion for partial summary judgment as to TIC's and Selective's duty to defend. Baldwin filed a motion for summary judgment as to BBL's claims for contractual and common law indemnity. In addition, Selective and National Union filed motions for summary judgment as to their alleged duties to defend and indemnify. The trial court held a hearing on the motions, after which it denied BBL's and St. Paul's motion for partial summary judgment and granted the other parties' motions for summary judgment. In doing so, the trial court dismissed all of BBL's and St. Paul's claims. This appeal followed.

1. BBL and St. Paul contend that the trial court erred in finding that insurers TIC and Selective had no duty to defend BBL and the owners as additional insureds in the underlying actions. We agree.

(a) "An insurer's duty to defend turns on the language of the insurance contract and the allegations of the complaint asserted against the insured." City of Atlanta v. St. Paul Fire & Marine Ins. Co.4 "Construction of an insurance policy is governed by the ordinary rules of contract construction, and when the terms of a written contract are clear and unambiguous, the court is to look to the contract alone to find the parties' intent." (Punctuation omitted.) Scottsdale Ins. Co. v. Great American Assurance Co.5 "If the facts as alleged in the complaint even arguably bring the occurrence within the policy's coverage, the insurer has a duty to defend the action." City of Atlanta, supra, 231 Ga.App. at 207, 498 S.E.2d 782. Indeed, "[t]o excuse the duty to defend the petition must unambiguously exclude coverage under the policy, and thus, the duty to defend exists if the claim potentially comes within the policy. Where the claim is one of potential coverage, doubt as to liability and insurer's duty to defend should be resolved in [285 Ga. App. 498] favor of the insured." (Punctuation omitted.) Penn-America Ins. Co. v. Disabled American Veterans.6

Magnum's insurer, Selective, issued an endorsement to the primary CGL policy, which listed BBL and the owners as additional insureds. In addition, that endorsement provided: "WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule

646 S.E.2d 686

as an insured but only with respect to liability arising out of your operations or premises owned by or rented to you." The primary CGL policy issued to Baldwin by its insurer, TIC, included an...

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