O'Dell v. Pac. Indem. Co.
| Decision Date | 17 July 2015 |
| Docket Number | No. 14-14457,14-14457 |
| Parties | PHILLIP O'DELL, as Assignee of Roland B. Mahoney and Sandra R. Mahoney, Plaintiff - Appellant, v. PACIFIC INDEMNITY COMPANY, Defendant - Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
[DO NOT PUBLISH]
Non-Argument Calendar
D.C. Docket No. 4:13-cv-00139-WTM-GRS
Appeal from the United States District Court for the Southern District of Georgia
Before MARCUS, MARTIN and ANDERSON, Circuit Judges.
Phillip O'Dell, as assignee of Roland and Sandra Mahoney ("the Mahoneys"), appeals from the district court's grant of summary judgment in favor of Pacific Indemnity Company ("Pacific Indemnity"), in O'Dell's lawsuit seekingrecovery under an insurance policy covering the Mahoneys' former home. O'Dell argues on appeal that the district court erred in granting summary judgment to Pacific Indemnity because: (1) the court failed to consider covered claims for physical damage; (2) diminution in value resulting from misrepresentation amounts to covered property damage; and (3) even if no coverage existed, Pacific Indemnity breached its duty to defend the Mahoneys. After careful review, we affirm.
We review an order granting summary judgment de novo, viewing all of the facts in the light most favorable to the non-movant. Brooks v. Cnty. Comm'n of Jefferson Cnty., Ala., 446 F.3d 1160, 1161-62 (11th Cir. 2006). Summary judgment is appropriate where "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). After the party moving for summary judgment shows the absence of a genuine issue of material fact, the burden shifts to the non-movant, who must present affirmative evidence to show that a genuine issue of material fact exists. Porter v. Ray, 461 F.3d 1315, 1320 (11th Cir. 2006). We may affirm the district court's judgment based on "any ground supported by the record, regardless of whether that ground was relied upon or even considered by the district court." Kernel Records Oy v. Mosley, 694 F.3d 1294, 1309 (11th Cir. 2012).
"Under Georgia law [which the parties agree applies], contracts of insurance are interpreted by ordinary rules of contract construction." Boardman Petroleum,Inc. v. Federated Mut. Ins. Co., 498 S.E.2d 492, 494 (Ga. 1998). Where the terms are unambiguous, we "look to the contract alone to ascertain the parties' intent." Id. Although ambiguities are construed against the insurer, we consider the contract as a whole and give each provision its intended effect. Id.
The facts viewed in the light most favorable to O'Dell are these. The Mahoneys owned a home in Savannah, Georgia (the "Property") that was damaged by flooding. The Mahoneys insured the Property with a "Masterpiece" Policy issued by Pacific Indemnity (the "Policy"). The Policy included "Personal Liability Coverage," covering "damages a covered person is legally obligated to pay for personal injury or property damage which take[s] place anytime during the policy period and are caused by an occurrence." Thus, Pacific Indemnity was obliged to defend the Mahoneys from "any suit seeking covered damages for personal injury or property damage." "Property damage" was defined as "physical injury to or destruction of tangible property, including the loss of its use." "Occurrence" was defined as However, "[d]amage to covered person's property" was excluded from the Personal Liability Coverage -- meaning there wasno personal liability coverage "for property damage to property owned by any covered person."
Philip O'Dell contracted to purchase the Property. As part of the agreement, O'Dell received a disclosure statement that omitted the prior flooding experienced by the Mahoneys. The sale of the Property closed on February 14, 2005, and the Mahoneys cancelled the Masterpiece policy effective February 15, 2005.
Sometime later, O'Dell experienced flooding and septic problems at the Property. He subsequently learned that the Property had sustained flood damage while the Mahoneys owned it. O'Dell filed suit against the Mahoneys in the State Court of Georgia on March 17, 2008. Through a series of amended complaints, O'Dell alleged claims against the Mahoneys for negligent failure to disclose prior flooding and septic issues, misrepresentation, and breach of contract relating to the sale of the Property. Specifically, O'Dell argued that his damages included the cost to "repair [flood and septic] damage" and "diminution of the property's value." The Mahoneys requested a defense under the Masterpiece Policy. Pacific Indemnity refused to defend or indemnify the Mahoneys because O'Dell's complaint did not seek covered damages and, alternatively, because any otherwise covered damages were excluded by the Policy.
Prior to trial in the underlying suit, O'Dell settled with the Mahoneys for the maximum amount of coverage under the Policy ($500,000), but agreed not toenforce the settlement against the Mahoneys. Rather, the Mahoneys assigned to O'Dell their rights and interests in any claims they had against Pacific Indemnity. O'Dell filed the instant action against Pacific Indemnity in the State Court of Georgia seeking damages, as assignee, for Pacific Indemnity's "bad faith" refusal to defend and indemnify the Mahoneys in the underlying litigation. Pacific Indemnity removed this suit to the United States District Court for the Southern District of Georgia. The district court granted Pacific Indemnity's motion for summary judgment, finding that O'Dell's complaint did not allege covered "property damage" because it alleged only economic losses, which were not covered by the Policy.
O'Dell's first argument on appeal is that the damages he alleged in the underlying suit were not purely economic. Rather, he also sought the "cost of repairs" for physical damage due to flooding and septic problems. This argument ignores the undisputed facts and the plain language of the Policy. The "cost of repairs" sought by O'Dell could mean one of only two things: (1) the repair of damage that occurred after O'Dell purchased the Property; or (2) the repair of damage that occurred while the Mahoneys still owned the Property. Neither alternative alleges covered, non-excluded damages.
To the extent we construe the underlying complaint to seek repair costs for damage that occurred after the closing, the Policy plainly provides no coverage.The Policy's Personal Liability Coverage unambiguously states that it covers only "property damage which takes place anytime during the policy period and [is] caused by an occurrence." Because the Mahoneys cancelled the Policy on February 15, 2005, any post-closing flood damage did not "take[] place anytime during the policy period." Thus, no coverage exists under the unambiguous terms of the Policy. See Planters & Citizens Bank v....
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