Continental Graphic Services, Inc. v. Continental Cas. Co.
| Decision Date | 29 July 1982 |
| Docket Number | No. 81-7922,81-7922 |
| Citation | 681 F.2d 743 |
| Parties | CONTINENTAL GRAPHIC SERVICES, INC., Plaintiff-Appellant, John C. Grunden, et al., Movants-Appellants, v. CONTINENTAL CASUALTY COMPANY, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Davis & Butt, Eugene David Butt, Atlanta, Ga., for Continental Graphic Services, Inc.
Jessee, Ritchie & Duncan, George E. Duncan, Jr., Edgar S. Mangiafico, Jr., Atlanta, Ga., for Grunden et al.
David A. Handley, Michael W. Higgins and Hugh M. Worsham, Jr., Atlanta, Ga., for Continental Cas. Co.
Appeals from the United States District Court for the Northern District of Georgia.
Before HILL, VANCE and HATCHETT, Circuit Judges.
This appeal arises from the district court's granting of summary judgment to appellees, Continental Casualty Company (hereinafter CCC). For the reasons set out below, we affirm the award of summary judgment.
In February of 1980 while testing a printing press which it had installed for International Lithographing, Continental Graphic Services (hereinafter CGS) discovered several damaged gears and other mechanisms. International subsequently sued CGS for damages arising from installation and repair of the press. CGS asked the insurance carrier, CCC, to defend the action and provide coverage in the event that the claim proved successful.
CCC, however, denied coverage under the policy extended to CGS on the basis of the following exclusion clause:
This insurance does not apply:
....
(d) to that particular part of any property, not on the premises owned by or rented to the Insured,
(i) upon which operations are being performed by or on behalf of the Insured at the time of the Property Damage arising out of such operations, or
(ii) out of which any Property Damage arises, or
(iii) the restoration, repair or replacement of which has been made or is necessary by reason of faulty workmanship thereon by or on behalf of the Insured ....
Similarly, CCC refused to defend the suit by International because the loss was not within the scope of the policy.
CGS brought the present Declaratory Judgment action, seeking a declaration that the policy in fact covers the loss claimed by International and that CCC has a duty under the insurance agreement to defend CGS. Jurisdiction was based upon diversity of citizenship, and because the policy was executed in Georgia the law of that state applies.
The district court held that the loss sustained by International due to the damaged press was not protected by the insurance policy. Clearly, the exclusion clauses quoted above exempt the printing press itself from coverage.
CGS, however, seeks to avoid the unambiguous language of the exclusion clauses by arguing that the exclusions only relate to the defective gear which caused the damage, rather than to the entire press as the district court found. CGS's argument is without merit. Operations were being performed on the printing press. In clear terms the policy excludes from coverage damage to the press itself. See Vinsant Electrical Contractors v. Aetna Casualty & Surety Co., 530 S.W.2d 76 (Tenn.1975); Goldsberry Operating Company, Inc. v. Cassity, Inc., 367 So.2d 133 (La.App.1979).
The argument principally relied upon by CGS on appeal is that CCC's agent, Mr. Grunden, made certain representations to CGS in procurring the instant policy and that as a result of those statements CCC should be estopped from denying coverage. More to the point, CGS claims that because Grunden knew that 99% of its business activities took place "not on the premises owned or rented to the Insured," CCC should be estopped from denying coverage.
The district court, citing controlling Georgia law, held that CGS could not use the doctrines of estoppel and waiver to enlarge the coverage of the policy. CGS steadfastly maintains that Christian v. Allstate Insurance Co., 239 Ga. 850, 239 S.E.2d 328 (1977), calls for a contrary result.
Christian involved an automobile insurance policy which specifically described as covered certain company owned cars. Among those listed as owned by the company was one which in fact was privately owned. The insurance company knew about the private ownership, but continued to collect premiums on the vehicle and to list it as covered by the policy. When the car was involved in an accident, the insurer denied coverage. The Georgia Supreme Court held, "while waiver or estoppel may not be used to enlarge the coverage contained in a policy of insurance, it may nevertheless be invoked ... to preclude an insurer from varying the terms of a policy of insurance as written." Id. at 853, 239 S.E.2d at 330.
Christian is readily distinguishable from the present case. In Christian the terms of the policy expressly included the...
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