Haley v. Georgia Farm Bureau Mut. Ins. Co.

• Citation: 305 S.E.2d 160,166 Ga.App. 596
• Decision Date: 12 May 1983
• Docket Number: No. 65371,65371
• Parties: HALEY et al. v. GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY.
• Court: United States Court of Appeals (Georgia)

Page 160

305 S.E.2d 160

166 Ga.App. 596

HALEY et al. v. GEORGIA FARM BUREAU MUTUAL INSURANCE COMPANY.

No. 65371.

Court of Appeals of Georgia.

May 12, 1983.

C. Michael Roach, Athens, for appellants.

Joseph C. Parker, Marietta, for appellee.

McMURRAY, Presiding Judge.

The defendants in this declaratory judgment action are also the defendants in an action in the courts of Tennessee. The complaint in the Tennessee action alleges that defendants sold to certain residents of that state a number of swine which were infected with pseudorabies virus or were without proper vaccination and health papers. The Tennessee purchasers in their action seek to recover damages from defendants upon various theories including breach of contract, breach of implied and express warranties, and fraud.

Plaintiff alleges that defendants called upon the plaintiff to defend the Tennessee action and to pay any verdict and judgment rendered therein pursuant to the provisions of certain insurance policies issued by plaintiff. Plaintiff alleges that there is no coverage and no duty to defend under the insurance policies in force.

Following discovery, the opposing parties submitted their motions for summary judgment to the trial court. The motion for summary judgment of defendants was denied and that of the plaintiff granted. Defendants appeal enumerating as error the trial court's decision in granting plaintiff's motion for summary judgment and in denying defendants' motion for summary judgment. Held:

The record shows three insurance policies issued by the plaintiff and naming as insured, one of the defendants. These policies for purpose of discussion will be identified as policies A ("General Liability--Automobile"), B ("Farmowners"), and C ("Combination Automobile") which is as they are identified in the record as attached to the affidavit of plaintiff's district claims manager.

Any coverage will be under the policy provisions dealing with "property damage." The Tennessee action states no claims relating to bodily injuries or medical payment.

As to policy C, "property damage" liability is applicable only to injury to or destruction of property, including the loss of use thereof, caused by accident and "arising out of the ownership, maintenance, or use of the automobile." This motor vehicle liability policy provides no coverage applicable to the claims made in the Tennessee action.

Both policies A and B, contain the provision that the plaintiff "will pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of ... property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such ... property damage, even if any of the allegations of the suit are groundless, false or fraudulent ..." Two of the terms contained within the provisions of policies A and B, which are germane to the decision of the case sub judice, are defined in policies A and B as: " 'occurrence' means an accident, including continuous or repeated exposure to conditions, which results in .... property damage neither expected nor intended from the standpoint of the insured; ... 'property damage' means (1) physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom, or (2) loss of use of tangible property which has not been physically injured or destroyed provided such loss of use is caused by an occurrence during the policy period."

To the extent that the Tennessee action is predicated upon intentional misrepresentations allegedly made by defendants no coverage is provided. Any damages resulting from intentional misrepresentations by defendants would not be caused by an occurrence. To be an occurrence the property damage resulting therefrom must be "neither expected nor intended from the standpoint of the insured." In contrast an action for fraud and deceit must be based upon a representation or concealment which was made with the intention and purpose of deceiving the opposite party and for the purpose of injuring him. In such cases knowledge of the falsehood constitutes an essential element and must be proven. Lively v. Garnick, 160 Ga.App. 591, 592(1), 287 S.E.2d 553; Day v. Randolph, 159 Ga.App. 474, 475, 283 S.E.2d 687. See also Wells v. Gress, 118 Ga. 566, 567, 45 S.E. 418.

Policies A and B both contain exclusions whereby coverage does not apply to property damage to products sold by insured, arising out of such products. Therefore, any property damage to the property sold by defendant arising from it's infection with pseudorabies is not covered by either policy. Compare Hamilton Die Cast v. United States Fid. &c. Guar. Co., 508 F.2d 417; Economy Mills v. Motorist Mut. Ins. Co., 8 Mich.App. 451, 154 N.W.2d 659; and L.D. Schreiber Cheese Co. v. Standard Milk Co., 457 F.2d...