Nationwide Mut. Fire Ins. Co. v. Collins

Decision Date22 October 1975
Docket NumberNo. 1,No. 51043,51043,1
PartiesNATIONWIDE MUTUAL FIRE INSURANCE COMPANY v. B. L. COLLINS et al
CourtGeorgia Court of Appeals

Smith, Cohen, Ringel, Kohler, Martin & Lowe, Fred W. Ajax, Jr., Atlanta, for appellant.

Cheeley & Chandler, Joseph E. Cheeley, Merritt & Pruitt, Glyndon C. Pruitt, Buford, for appellees.

WEBB, Judge.

Fifteen-month-old Sherri Mullinax, by her next friend and mother, Nancy Mullinax, brought suit against Bill and Jo Ann Collins seeking to recover for personal injuries allegedly sustained by Sherri at the Collins home. The Collins were insured under a homeowner's policy issued by Nationwide Mutual Fire Insurance Company. The insurance company filed the present declaratory judgment action, seeking a judgment that it owed no defense to the Collins because the policy provides that it would not apply to any activities in connection with a business solely owned by an insured nor would it apply to business property defined as property on which a trade, profession, or occupation is being practiced as either primary or supplementary source of income.

When injured, Sherri was in the Collins home under an arrangement whereby Mrs. Mullinax paid Mrs. Collins $5 per day for caring for Sherri and her three-year-old brother while Mrs. Mullinax was at work. This was generally Monday through Friday. Mrs. Mullinax brought the children over at 7:00 in the morning and picked them up at 5:00 in the afternoon. Mrs. Collins fed the two small children breakfast along with her own eight and ten-year-olds, who went to school about 8:45. She also gave lunch to the Mullinax children. Mrs. Collins did not offer services as a baby-sitter or a nursery, keeping only the Mullinax children; she was not licensed as such, and never so advertised; sometimes she kept the children for nothing; and she used the money to help buy food for the children and to pay her expenses in taking ceramic lessons one day a week.

On the day of the injury, Tuesday, November 11, 1972, Mrs. Collins had gone to her ceramics class. She had a neighbor, Mrs. Ruth Price, come in from 9 to 12 to look after the children, as she had done previously and to whom she paid $5 each time. Mrs. Price had put Sherri on the floor to change her diaper, the phone rang, and while she was on the phone Sherri burned her hand on the floor furnace grill in the hall.

The insurance company contends it has no obligation under the homeowner's policy to defend the Collins in an action for damages resulting from Sherri's blistered hand, because of certain 'business pursuits' exclusion clauses in the policy. Its motion for summary judgment was denied, and the insurance company appeals.

Section II, Part I, Paragraph 1 of the policy provides 'This insurance covers the named insured and members of his family, including any other person under the age of twenty-one in the care of any of the foregoing, residing in the same household . . . If an accident or occurrence should take place involving persons covered by Section II of this policy, Nationwide is obligated with respect to A. Bodily Injury and Property Damage to pay on behalf of the Insured all sums which he shall become legally obligated to pay (1) as damages because of bodily injury, sickness or disease, and death at any time resulting therefrom, . . . and (2) as damages because of injury to or destruction of property, including loss of use thereof . . .'

In seeking to avoid liability the insurer refers to two provisions in the policy, subparagraphs (d) and (f) of Paragraph 1, Part II, Section II, and quotes in part therefrom certain clauses which it contends exclude coverage. To put these clauses in proper perspective, and to demonstrate the clarity, or lack of clarity, of the alleged exclusions from liability we quote the paragraphs in full, italicizing the quoted phrases upon which the insurer bases its argument. They read, 'This Policy does not apply: 1. Under A (Bodily injury and property damage) and C (guests medical expenses) to . . . d. business property which means property on which a trade, profession or occupation is being practiced as either principal or supplementary source of income, except an incidental office, school, studio, barber or beauty shop on part of the described premises only when such occupancy has been indicated in the Declarations of this policy; property rented in whole or in part to others, or held for such rental, by an Insured, except one or two-family dwellings rented or held for rental by the named Insured shall not be deemed business property if such dwellings are indicated in the Declarations of this policy; and farms . . . f. any errors or omissions in the rendering of a professional service, except teaching: activities in connection with a business solely owned by an Insured or owned by a partnership of which an Insured is a partner, except such acts as are ordinarily incident to non-business pursuits or activities on the described premises, incident to the operation of an office, school, studio, barber or beauty shop and only when such occupancy has been indicated in the Declarations of this policy.'

That part of subparagraph 'd' quoted and relied upon by the insurer seems to us to be applicable solely to damages to property, and not bodily injuries as in the instant case.

The insurer contends that liability under Part A does not apply under subparagraph 'f' to 'activities in connection with a business solely owned by an Insured,' asserting that because Mrs. Collins received...

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