City of Atlanta v. St. Paul Fire & Marine Ins.

• Decision Date: 13 March 1998
• Docket Number: No. A97A2559, No. A97A2581, No. A98A0029, No. A98A0042.
• Citation: 231 Ga. App. 206,498 S.E.2d 782
• Parties: CITY OF ATLANTA v. ST. PAUL FIRE & MARINE INSURANCE COMPANY (Four Cases).
• Court: Georgia Court of Appeals

498 S.E.2d 782

231 Ga. App. 206

CITY OF ATLANTA v. ST. PAUL FIRE & MARINE INSURANCE COMPANY (Four Cases).

Nos. A97A2559, A97A2581, A98A0029 and A98A0042.

Court of Appeals of Georgia.

March 13, 1998.

Clifford E. Hardwick IV, Robert B. Caput, Atlanta, for appellant.

Sullivan, Hall, Booth & Smith, Michael A. Pannier, Atlanta, for appellee.

JOHNSON, Judge.

The City of Atlanta entered into a contract with John D. Stephens, Inc., wherein Stephens agreed to clear, grade and obtain fill dirt from several parcels of property in connection with the City's construction of a new concourse at Atlanta's Hartsfield International Airport. The contract required that Stephens obtain commercial general liability insurance and name the City as an additional insured. St. Paul Fire & Marine Insurance Company issued the policy.

Stephens performed the work as directed by the City. Although the City had acquired some property in the area, the City directed Stephens to work on several parcels of property before it acquired proper title.

In an earlier action, four of the property owners sued the City and Stephens seeking injunctive relief and damages for the trespass upon their land. Stephens moved for and was granted summary judgment in the cases. The property owners appealed. This Court affirmed the grant of summary judgment to Stephens, holding that a contractor engaged in a public works project was not liable for damage to private property resulting from the work performed when it followed the directions of the employer and the damage did not result from the contractor's negligence or wilful tort. Groves v. City of Atlanta, 213 Ga.App. 455, 457(1), 444 S.E.2d 809 (1994).

The property owners dismissed the actions against the City without prejudice, then refiled the suits. In the complaints, which are nearly identical, the property owners allege that the City took their property without first compensating them. Specifically, the property owners complain that the City and persons acting on its behalf wilfully and intentionally entered their property and caused it to be cleared of trees, topsoil and vegetation, excavated, and graded. The complaints further allege that the City and its agents continued to enter upon and damage the property after being notified that they were trespassing.

The City requested that St. Paul defend the City in these lawsuits, but St. Paul did not respond. The City then filed a third-party complaint against St. Paul seeking a declaratory judgment requiring that St. Paul defend and indemnify the City in the actions. St. Paul moved for summary judgment, alleging: the coverage afforded the City was limited to damage resulting from Stephens' work, when the damage here resulted from the City's failure to acquire title to the property before directing Stephens to perform work upon the property; the property owners' allegations against the City are based on alleged wilful and intentional conduct and do not seek to recover damages caused by an accidental "event" as required by the policy; the damages alleged by the property owners are excluded from coverage by the intentional property damage exclusion contained in the liability insurance policy; and the policy's "control of property" exclusion precludes coverage for property damage to real property being worked on by Stephens if the damage resulted from that work.

The City filed a cross-motion for summary judgment, alleging that it was entitled to judgment regarding St. Paul's duty to defend based on the unambiguous language of the policy or, alternatively, based on an examination of the four corners of the policy. The trial court granted St. Paul's motion and, in so doing, effectively denied the City's cross-motion. The City appeals. All four cases involve identical issues, appellees, appellants, and briefs. Only the property owners differ. Therefore, we will consider the appeals together.

An insurer's duty to defend turns on the language of the insurance contract and the allegations of the complaint asserted against the insured. Canal Indem. Co. v. Chastain, 228 Ga.App. 255, 256, 491 S.E.2d 474 (1997). We look to the allegations of the complaint to determine whether a claim covered by the policy is asserted. Great Am. Ins. Co. v. McKemie, 244 Ga. 84, 85-86, 259 S.E.2d 39 (1979). 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. See Penn-America Ins. Co. v. Disabled Am. Veterans, 224 Ga.App. 557, 559, 481 S.E.2d 850 (1997), aff'd, 268 Ga. 564, 490 S.E.2d 374 (1997). However, as the Supreme Court held in Great Am. Ins. Co., supra, where the complaint filed against the insured does not assert any claims upon which there would be insurance coverage, the insurer is justified in refusing to defend the insured's lawsuit. Leader Nat. Ins. Co. v. Smith, 177 Ga.App. 267, 274(5), 339 S.E.2d 321 (1985).

The contract of liability insurance at issue in this case provides that St. Paul will pay "amounts any protected person is legally required to pay as damages for covered ... property damage that ... is caused by an event." It further provides that St. Paul has the "right and duty to defend any claim or suit for covered injury or damage made or brought against any protected person...." For the reasons discussed below, we hold that St. Paul is not obligated to provide a defense or indemnify the City in the actions filed against it by the property owners.

1. St. Paul asserts there is no duty to defend or pay because the policy provides that St. Paul will pay for covered damages caused by an "event." According to the policy, "(e)vent means an accident, including continuous or repeated exposure to substantially the same general harmful conditions." Although the policy does not define " acc...