Maxum Indem. Co. v. Jimenez, A12A0992.

• Decision Date: 20 November 2012
• Docket Number: No. A12A0992.,A12A0992.
• Citation: 734 S.E.2d 499,318 Ga.App. 669
• Parties: MAXUM INDEMNITY COMPANY v. Jose Alfredo JIMENEZ et al.
• Court: Georgia Court of Appeals

318 Ga.App. 669
734 S.E.2d 499

MAXUM INDEMNITY COMPANY
v.
Jose Alfredo JIMENEZ et al.

No. A12A0992.

Court of Appeals of Georgia.

Nov. 20, 2012.

[734 S.E.2d 501]

William Hollis Buechner Jr., Philip Wade Savrin, Atlanta, for Maxum Indemnity Company.

Richard T. Taylor, Stevan A. Miller, Chad Eric Jacobs, Atlanta, for Jose Alfredo Jimenez et al.

MILLER, Presiding Judge.

[318 Ga.App. 669]Maxum Indemnity Company filed an action against its insured, Jose Alfredo Jimenez, and a claimant, Gill Plumbing Company, seeking a declaratory judgment that its commercial general liability (“CGL”) policy did not afford coverage for liability associated with Jimenez's negligent pipe installation on a construction project that resulted in property damage to a dormitory at Georgia Southern University. The parties filed cross motions for summary judgment on the coverage issues. The trial court denied Maxum's motion, and granted Gill Plumbing's and Jimenez's motion, finding that the CGL policy provided coverage for the underlying claim. Maxum appeals, contending that the trial court erred in granting summary judgment in favor of Gill Plumbing and Jimenez since (i) the underlying claim did not fall within the policy's coverage for “property damage” caused by an “occurrence;” (ii) the underlying claim did not fall within the “insured contract” exception to the “ Contractual Liability” exclusion in the policy; and (iii) coverage was barred under the policy's “Contractor's Limitation Endorsement.” We discern no error and affirm.

“Summary judgment is proper when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. OCGA § 9–11–56(c).” Matjoulis v. Integon Gen. Ins. Corp., 226 Ga.App. 459(1), 486 S.E.2d 684 (1997). “Insurance in Georgia is a matter of contract, and we have long held that contract disputes are well suited for adjudication by summary judgment because construction of a contract is ordinarily a matter of law for the court.” (Citations and punctuation omitted.) Nationwide Mut. Fire Ins. Co. v. Somers, 264 Ga.App. 421, 423(1), 591 S.E.2d 430 (2003). In this appeal, the relevant facts underlying the insurance claim are undisputed and the only question is whether the policy covers the claim. Under these circumstances, since only the legal issue of coverage is presented, this matter can be decided by summary judgment, not declaratory judgment. There are no factual disputes. See id. at 424(1), 591 S.E.2d 430. Our review of the trial court's decision is de novo. See McDonald Constr. Co. v. Bituminous Cas. Corp., 279 Ga.App. 757, 760, 632 S.E.2d 420 (2006).

[734 S.E.2d 502]

The record shows that the underlying suit involved a construction project for a dormitory on the campus of Georgia Southern University.¹ Gill Plumbing Company and Jose Alfredo Jimenez were [318 Ga.App. 670]hired as subcontractors to install the pipes for the project. Subsequent to the construction, a pipe burst occurred at the dormitory, which caused damage to several units, including the flooring, carpet, and walls. The underlying lawsuit was filed to recover the costs to repair the property damage in the dormitory. Claims for indemnification and contribution were asserted against Gill Plumbing and Jimenez as the plumbing subcontractors. Following a trial, the jury returned a verdict finding that Jimenez was at fault for causing the property damage at the dormitory, and that Jimenez was liable for $191,382.01 in damages that arose from his negligent pipe work during the project. Based upon the jury's verdict, the trial court entered a judgment in favor of Gill Plumbing as to its claim for indemnification against Jimenez for the property damage.

Jimenez was insured under a CGL policy issued by Maxum Indemnity Company. Maxum filed the instant declaratory judgment action, seeking a declaration that the claim against Jimenez was not covered under its policy, and thus, it had no duty to indemnify Jimenez for the damages awarded in the underlying lawsuit.

“Construction of an insurance policy is governed by the ordinary rules of contract construction, and when the terms of a written contract are clear and unambiguous, the court is to look to the contract alone to find the parties' intent.” (Citation omitted.) Nationwide Mut. Fire Ins. Co., supra, 264 Ga.App. at 426(3)(a), 591 S.E.2d 430. Here, the unambiguous terms of the policy provided, in relevant part, that Maxum agreed to “pay those sums that [Jimenez] becomes legally obligated to pay as ‘damages' because of ... ‘property damage’ to which [the] insurance applies.” The policy further stated that the insurance applied to property damage “caused by an ‘occurrence’.” In turn, the Definitions section of the policy pertinently defined “property damage” as “[p]hysical injury to tangible property, including all resulting loss of use of that property,” and defined “occurrence” to mean “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” Although the policy did not specifically define the term “accident,” that term is commonly defined in Georgia as “an event which takes place without one's foresight or expectation or design.” (Citation and punctuation omitted.) American Empire, etc. Ins. Co. v. Hathaway Dev. Co., 288 Ga. 749, 751, 707 S.E.2d 369 (2011); see also Nationwide Mut. Fire Ins. Co., supra, 264 Ga.App. at 426(3)(a), 591 S.E.2d 430. Consistent with this common definition of “accident,” the policy contained an exclusion [318 Ga.App. 671]stating that the insurance did not apply to property damage expected or intended from the standpoint of any insured. The policy also contained a “ Contractual Liability” exclusion, which provided that the insurance did not apply to “ ‘property damage’ for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement.” However, that exclusion did not apply to liability for damages “[a]ssumed in a contract or agreement that is an ‘insured contract’ ” or “[t]hat the insured would have in the absence of the contract or agreement.” An “insured contract” was pertinently defined to mean “[t]hat part of any other contract or agreement pertaining to [the insured's] business ... under which [the insured] assume[d] the tort liability of another party to pay for ... ‘property damage’ to a third person or organization.” The policy excluded “property damage” to “[t]hat particular part of any property that must be restored, repaired or replaced because [the insured's work] was incorrectly performed on it.” The property damage exclusion did not apply, however, to a “products-completed operations hazard,” which included the insured's products or completed work. Lastly,

[734 S.E.2d 503]

the policy contained a “Contractors Limitation Endorsement” that excluded property damage sustained “by any person who [was] not [c]ontracted with [the insured.]”

1. Maxum first contends that the underlying claim did not fall within the policy's coverage for “property damage” caused by an “occurrence.” We disagree.

Maxum's arguments in this regard have been decided adversely by the precedents of American Empire, supra, 288 Ga. at 751–752, 707 S.E.2d 369, and SawHorse v. Southern Guar. Ins. Co., etc., 269 Ga.App. 493, 498–499(2)(a), (b), 604 S.E.2d 541 (2004), which involved the same policy language and definitions of the “property damage” and “occurrence” terms as those presented here. The rulings in those cases establish...