Brooklyn Bridge, Inc. v. South Carolina Ins. Co., 1857

• Decision Date: 05 May 1992
• Docket Number: No. 1857,1857
• Parties: BROOKLYN BRIDGE, INC., d/b/a Brooklyn Bridge Sausage and Deli, Respondent, v. SOUTH CAROLINA INSURANCE COMPANY, Appellant. . Heard
• Court: South Carolina Court of Appeals

Page 511

420 S.E.2d 511

309 S.C. 141

BROOKLYN BRIDGE, INC., d/b/a Brooklyn Bridge Sausage and Deli, Respondent, v. SOUTH CAROLINA INSURANCE COMPANY, Appellant.

No. 1857.

Court of Appeals of South Carolina.

Heard May 5, 1992.

Decided July 20, 1992.

Rehearing Denied Sept. 8, 1992.

Certiorari Denied Jan. 20, 1993.

D.W. Green, Jr., of Green & Sasser, Conway, for appellant.

B. Michael Brackett, of Sherrill & Rogers, Columbia, and George W. Cox, Jr., Myrtle Beach, for respondent.

SHAW, Judge:

Respondent, Brooklyn Bridge, Inc., d/b/a Brooklyn Bridge Sausage and Deli, sued appellant, South Carolina Insurance Company, for failure to pay under a property damage insurance policy. The trial judge directed a verdict on liability for the insured and submitted the issue of damages to the jury. After the jury returned its verdict on damages, the trial judge awarded prejudgment interest. The insurance company appeals. We affirm.

The facts of this case are undisputed. South Carolina Insurance Company issued a business property damage policy to Brooklyn Bridge, a deli restaurant, effective May 27, 1989. On or about September 21, 1989, Hurricane Hugo swept through the area causing a general power failure resulting in food spoilage in the restaurant.

The policy in question covered the loss of or damage to business personal property but contained the following pertinent language on exclusions:

B. EXCLUSIONS

1. We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

e. Power Failure

The failure of power or other utility service supplied to the described premises, however caused, if the failure occurs away from the described premises.

But if loss or damage by a Covered Cause of Loss results, we will pay for that resulting loss or damage.

The insurance company first contends the trial judge erred in ruling the restaurant's loss was covered by the policy because the language of the policy clearly and unambiguously excluded coverage. We disagree.

Section B.1.e. provides that loss or damage caused either directly or indirectly by the failure of power supplied to the premises, however caused, is not covered if it occurs away from the premises. However, Section B.1.e. also provides that if loss or damage by a covered cause of loss results, then there is coverage. The trial judge found this limitation on the exclusion applied to provide coverage because it was undisputed that business personal property was lost and, although the failure of power occurred away from the premises, the loss resulted from Hurricane Hugo and Hurricane Hugo was a covered cause of loss.

The insurance company argues that Section B.1.e. means that there is no coverage provided where there is a loss resulting from off premises power failure and that the second sentence of this section simply means that coverage will be provided where the loss or damage by a covered cause of loss results from a power failure, such as where a fire occurs as the result of an off premises power failure. Because we find the interpretation of the trial judge to be reasonable and logical, we are compelled to affirm his finding in favor of coverage.

We first note that the trial judge found the policy was unambiguous and provided coverage for the restaurant's loss. We agree that the policy can easily be read to provide coverage. While there may be some merit to the insurance company's argument, it is well settled that, where language used in an insurance contract is capable of two reasonable interpretations, the construction which is most favorable to the insured should be adopted. Fowler v. Canal Insurance Company, 300 S.C. 420, 389 S.E.2d 301 (Ct.App.1990). Insurance policies are to be liberally construed in favor of the insured and strictly construed against the insurer. Kraft v. Hartford Insurance Companies, 279 S.C. 257, 305 S.E.2d 243 (1983). Further, exclusions in an insurance policy are to be construed most strongly against the insurer. Abernathy v. Prudential Insurance Company of America, 274 S.C. 388, 264 S.E.2d 836 (1980).

In the instant case, had the insurance company intended for the limitation to the exclusion to apply only when a covered cause of loss resulted from a power failure, it could have specifically provided for the same by stating, "But if loss or damage by a Covered Cause of Loss results from a power failure, we will pay for that resulting loss or damage." ¹...