Nationwide Mut. Fire Ins. Co. v. Somers

• Decision Date: 01 December 2003
• Docket Number: No. A03A1067.,A03A1067.
• Citation: 591 S.E.2d 430,264 Ga. App. 421
• Parties: NATIONWIDE MUTUAL FIRE INSURANCE COMPANY v. SOMERS et al.
• Court: Georgia Court of Appeals

591 S.E.2d 430

264 Ga. App. 421

NATIONWIDE MUTUAL FIRE INSURANCE COMPANY v. SOMERS et al.

No. A03A1067.

Court of Appeals of Georgia.

December 1, 2003.

Temple, Strickland & Dinges, William A. Dinges, Decatur, for appellant.

Meadows, Ichter & Bowers, Michael J. Bowers, Christopher S. Anulewicz, Atlanta, John B. Lyle, Marietta, for appellees.

PER CURIAM.

Nationwide Mutual Fire Insurance Company appeals the grant of summary judgment to Deborah Somers, John Connolly and Margie Connolly, d/b/a Sunrise Memorial Gardens ("Sunrise"), John Connolly and Margie Connolly, d/b/a Easley Marble Company ("Easley"), Amanda Conant, and Phillip Ronald Woodall in the declaratory judgment action that Nationwide filed against them. Nationwide's complaint for a declaratory judgment alleged that it was uncertain about its rights and obligations under a commercial general liability policy it issued to Sunrise and asked the superior court for a declaratory judgment defining its rights and obligations and the legal relationships of the parties.

Somers is the plaintiff in an action against Sunrise alleging that Sunrise entered into a perpetual care contract that was assigned to her and that, under that contract, her son was buried at Sunrise. She contends that Sunrise breached the contract by failing to maintain the grave site and allowing it to be desecrated. She demanded compensatory and punitive damages and attorney fees.¹

Sunrise demanded that Nationwide provide coverage under its Nationwide policy, but Nationwide contends one or more of the exclusions in the policy apply and that there is no coverage under the policy. Although Nationwide has provided Sunrise with a defense, it has reserved its rights under the policy. It has not, however, officially denied coverage.

Sunrise answered, denying that Nationwide was entitled to the declaratory judgment it sought.² Sunrise also contended that Nationwide was estopped from denying coverage and also asserted that Nationwide had waived its denial of coverage. Further, even though Sunrise admitted that an actual controversy existed between Sunrise and Nationwide, Sunrise denied that an actual controversy existed regarding Easley.³

Subsequently, Nationwide moved for summary judgment against the remaining defendants. Somers's complaint contained three counts: Count 1 alleged that Sunrise desecrated her son's grave with cigarette butts and animal feces, Count 2 alleged that Sunrise breached the perpetual care contract by permitting the grave to be littered with trash, and Count 3 alleged the Racketeer Influenced and Corrupt Organizations Act count which has been dismissed. Nationwide asserted that the damages sought in this complaint are not the type covered by its policy and, in fact, are excluded from the policy. Nationwide reasons that the policy covers bodily injury⁴ and property damage,⁵ as defined by the policy, that are caused by an occurrence,⁶ and that none of Somers's injuries fall within the policy's definitions. Nationwide further contends that the acts Somers alleges are intentional acts which are excluded by the policy and that Somers's allegations regarding breach of the perpetual care contract are not covered because the policy excludes coverage for "bodily injury or property damage for which the insured is obligated to pay damages by reason of assumption of liability in a contract or agreement."

Sunrise's response to the motion for summary judgment asserted that the policy clearly covered property damage claims arising from unintentional conduct, and Somers's complaint asserted claims for unintentional damage to her property. Accordingly, Sunrise contended that Nationwide was required to defend and indemnify it against her claims. Sunrise, however, did not file a motion or cross-motion for summary judgment.

The superior court denied Nationwide's motion, holding that, "under the type of notice pleading in this and the underlying case insurance coverage may be warranted, there are numerous factual issues to be parsed-out in this case," and "that summary judgment is not an appropriate tool at this juncture in the case." Later, however, Sunrise asked the court to amend its ruling and enter an order granting summary judgment in favor of Sunrise. Sunrise contended that as no issues of disputed fact existed, whether Nationwide was entitled to the declaratory judgment it sought was an issue solely for the court, and as the trial court's earlier ruling found against Nationwide, Sunrise was entitled to summary judgment.

Although Nationwide contested this action, the trial court, while denying Sunrise's motion to amend, clarified its earlier order to state that the prior order "was intended to and did, resolve the coverage issues in this declaratory judgment issue in favor of Sunrise and against Nationwide. Nationwide owes a duty to provide coverage to Sunrise." Nationwide appeals from this decision,⁷ and contends the trial court erred by denying its motion for summary judgment, by ruling that the coverage issue was resolved in favor of Sunrise, and by declaring that the policy provided coverage to Sunrise for the claims alleged in Somers's complaint.

1. We first address Nationwide's contention that the trial court erred by granting summary judgment. "Insurance in Georgia is a matter of contract," Hurst v. Grange Mut. Cas. Co., 266 Ga. 712, 716(4), 470 S.E.2d 659 (1996), and we have long held that contract disputes are well suited for adjudication by summary judgment because construction of contracts is ordinarily a matter of law for the court. Burns v. Reves, 217 Ga.App. 316, 318(1), 457 S.E.2d 178 (1995). See OCGA § 13-2-1: "The construction of a contract is a question of law for the court. Where any [question] of fact is involved, the jury should [decide] the fact." Thus, even if a contract might be ambiguous, jury questions are not presented unless the application of the rules of contract construction fails to resolve the ambiguity. Norton v. Hutton, 172 Ga.App. 836, 324 S.E.2d 744 (1984).

In this appeal, no issues of fact are present. Nationwide contends that the plain language of its policy excludes coverage for Sunrise for the claims asserted in Somers's complaint, and Sunrise contends that the policy covers those claims. No one even alleges that the policy is ambiguous. Under these circumstances, the trial court correctly determined that the issues could be decided by summary judgment.

2. Because two issues are involved, the duty to defend and the duty to indemnify, we must address the issues separately. "An insurer's duty to defend and its duty to indemnify are separate and independent obligations. [Cit.]" City of Atlanta v. St. Paul Fire &c. Ins. Co., 231 Ga.App. 206, 209(3), 498 S.E.2d 782 (1998). Thus, here we consider not whether Nationwide is actually liable to Somers; but whether she has asserted a claim that falls within the policy coverage and that Nationwide has a duty to defend. St. Paul Fire &c. Ins. Co. v. Mitchell, 164 Ga.App. 215, 216(1), 296 S.E.2d 126 (1982).

Under our law,

[a]n insurer's duty to defend turns on the language of the insurance contract and the allegations of the complaint asserted against the insured. We look to the allegations of the complaint to determine whether a claim covered by the policy is asserted. If the facts as alleged in the complaint even arguably bring the occurrence within the policy's coverage, the insurer has a duty to defend the action. However, as the Supreme Court held in Great Am. Ins. Co. [v. McKemie, 244 Ga. 84, 85-86, 259 S.E.2d 39 (1979)], where the complaint filed against the insured does not assert any claims upon which there would be insurance coverage, the insurer is justified in refusing to defend the insured's lawsuit.

(Citations omitted.) City of Atlanta v. St. Paul Fire &c. Ins. Co., supra, 231 Ga.App. at 207, 498 S.E.2d 782.

Somers's complaint alleges two counts relevant to this appeal. Count 1 for desecration alleges that after interment "Sunrise by and through its employees, has caused the grave site to be desecrated with cigarette butts, animal feces, and other trash," and that Somers "is entitled to an award of compensatory and punitive damages for the desecration of the burial space." Count 2 for breach of contract alleges that Sunrise "has failed to maintain the burial plot, causing it to have an unsightly appearance," that Sunrise "has breached its contract for perpetual care by these actions and omissions," and that Somers "is entitled to an award of compensatory damages by reason of breach of contract." The complaint's prayer for relief sought "an award of compensatory damages for breach of contract, pain and suffering, and injured feelings," and "an award of punitive damages in the enlightened conscience of the jury," and attorney fees.

Nationwide's policy states that it "has the right and duty to defend [Sunrise] against any `suit'<sup>8</sup> seeking [damages for bodily injury and property damage]," but has no duty to defend Sunrise against "any suit seeking damages for `bodily injury' or `property damage' to which this insurance does not apply." Because Nationwide's policy covers property damage caused by an occurrence as those terms are defined by the policy, we find that the allegations of the complaint concerning desecration arguably bring the occurrence within the policy's coverage. Nothing in the complaint asserts that the desecration was intentional, and the complaint contains no allegations from which one could reasonably conclude that the actions that caused the desecration were not an occurrence. Accordingly, we find that Nationwide had a duty to defend Sunrise in this action. City of Atlanta v. St. Paul Fire &c. Ins. Co., supra, 231 Ga.App. at 207, 498 S.E.2d 782. The duty to defend is excused only when a complaint

unambiguously exclude[s] coverage under the policy, and thus, the duty to defend exists if the claim potentially

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