Sapp v. State Farm Fire & Cas. Co.
| Decision Date | 17 April 1997 |
| Docket Number | No. A97A0755,A97A0755 |
| Citation | 486 S.E.2d 71,226 Ga.App. 200 |
| Parties | , 97 FCDR 1838 SAPP v. STATE FARM FIRE & CASUALTY COMPANY. |
| Court | Georgia Court of Appeals |
Simpson, Gray & Cross, Ralph F. Simpson, Melanie Barbee-Cross, Tifton, for appellant.
Gardner, Willis, Sweat & Goldsmith, Donald A. Sweat, Albany, for appellee.
This is a declaratory judgment proceeding initiated by appellee State Farm Fire & Casualty Company to determine its obligation to provide a defense or coverage to Don W. Day Construction Company, Inc. and/or Don Day ("defendants Day") and third-party beneficiary rights of appellant Gerald L. Sapp, M.D. under a Contractor's Policy No. 91-33-9363-6 ("State Farm policy"). The litigation underlying this declaratory judgment proceeding was brought by appellant Sapp against Don Day and Bruce Hardwood Floors, a division of Triangle Pacific Corporation ("Bruce Hardwood Floors"); Bruce Hardwood Floors is not a party to the declaratory judgment action from which this appeal arises. The underlying civil action is premised upon allegedly negligent repairs and/or renovations made by defendants Day to appellant's home in Tifton, Tift County, Georgia.
On or about December 1, 1991, appellant employed defendants Day to conduct repairs and renovations to his home. As part of these renovations, defendants Day made repairs to the floor joist and installed approximately 2,800 square feet of hardwood flooring throughout the home. A portion of the work consisted of preparation of the crawl space, installation of drain tile, removal of water damaged material under the home, and preparation of the home to provide adequate ventilation and moisture barriers. This particular work was to be performed to protect the hardwood flooring from a moisture problem under the home.
A few weeks after installation, the hardwood floor began to "cup" or "warp," and eventually the hardwood floor had to be removed. On February 22, 1994, appellant filed a civil action, which was the underlying litigation to the case sub judice, against defendants Day and Bruce Hardwood Floors. Appellant sought recovery for the negligent installation of the hardwood floor, negligence in recommending what type of flooring should be installed, the costs of removing and replacing the flooring, and the costs of placing his home in the condition it was prior to removing and replacing the hardwood flooring.
On April 29, 1994, appellee filed this action for declaratory judgment, and on August 24, 1994, appellee filed a motion for summary judgment, which was granted by the trial court. It is from the trial court's order granting summary judgment that appellant Sapp appeals. 1
Appellant's first enumeration of error asserts that the trial court erred in granting summary judgment in favor of the appellee. Appellant's enumerations of error 2 through 5 are sub-allegations of this primary enumeration and delineate the reasons the trial court erred in granting summary judgment in favor of the appellee. We affirm the trial court's ruling and address each of the appellant's sub-allegations as follows:
(a) Appellant asserts that the trial court erred in holding that defendants Day "did not have a reasonable expectation of coverage due to the ambiguities created by appellee in its policy of insurance issued to him." We disagree.
Richards v. Hanover Ins. Co., 250 Ga. 613, 614, 299 S.E.2d 561 (1983). (Citations and punctuation omitted.) Auto-Owners Ins. Co. v. Barnes, 188 Ga.App. 439, 441(1), 373 S.E.2d 217 (1988).
The declaration pages of the State Farm policy describe the "schedule" or "description" of the various construction operations of the named insured, Don W. Day Construction Company, Inc., and identifies the premiums by category of contractor's operations associated with the risks insured against. Such declaration pages provide that appellee "will provide the insurance described in the policy in return for the premium and compliance with all applicable provisions of this policy," and thereafter, on two pages entitled "Supplemental Declarations, Schedule of Contractors Operations 05-01-92," a description of the operations of the insured is set forth in some detail.
"It is well established that under the rules of contract construction, a limited or specific provision will prevail over one that is more broadly inclusive." (Citations and punctuation omitted.) Auto-Owners Ins. Co., supra at 441(1), 373 S.E.2d 217. The State Farm policy contains the following exclusions to coverage: "this insurance does not apply ... 11. to property damage to ... e. that particular part of real property on which you or any contractor or subcontractor working directly or indirectly on your behalf is performing operations, if the property damage arises out of those operations; or f. that particular part of any property that must be restored, repaired or replaced because your work was incorrectly performed on it[;][t]his part of this exclusion does not apply to property damage included in the products-completed operations hazard[;] ... 12. to property damage to your product arising out of it or any part of it; 13. to property damage to your work arising out of it or any part of it and included in the products-completed operations hazard[;] ... 14. to property damage to impaired property, or property that has not been physically injured, arising out of: a. a defect, deficiency, inadequacy or dangerous condition in your product or your work; or b. a delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms[;] ... 15. to damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of: a. your product; b. your work; or c. impaired property; if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy, or dangerous condition in it...." The language of exclusions 11. e., 11. f., 12, 13, 14, and 15 is clear and unambiguous, and such exclusions are what are generally known as "business risk" exclusions that are designed to exclude coverage for defective workmanship by the insured builder causing damage to the construction project itself. Gary L. Shaw Builders v. State Auto. Mut. Ins. Co., 182 Ga.App. 220, 223, 355 S.E.2d 130 (1987); Elrod's Custom Drapery, Etc. v. Cincinnati Ins. Co., 187 Ga.App. 670, 371 S.E.2d 144 (1988). The declaration pages do not purport to modify or replace any of the "business risk" exclusions of the State Farm policy. Clearly, there are no genuine ambiguities in the declaration pages of the State Farm policy or in the "business risk" exclusions of the State Farm policy, and there could not be any "objectively reasonable" expectation on the part of the insured that coverage for defective workmanship by the insured builder which caused damage to the construction project itself was provided under the policy. See Gary L. Shaw Builders, supra. Therefore, this enumeration of error is without merit.
(b) Appellant alleges that the trial court erred in holding that an ambiguity did not exist regarding the definition of "your work" under the terms of the policy, as it is applied in this litigation.
"Your work" is defined under the State Farm policy as: "(1) work or operations performed by you or on your behalf; and (2) materials, parts or equipment furnished in connection with such work or operations." It is undisputed that the "work" performed by defendants Day included the investigation of and repairs to the floor joists and structures supporting the floor and frame for the appellant's house, preparation of the crawl space, installation of drain tile, removal of water-damaged material from under the house, preparation of the home to provide adequate ventilation and moisture barriers regarding the moisture problem under the house, and installation of approximately 2,800 square feet of hardwood flooring throughout the home. In addition, appellant, in his complaint in the underlying litigation, specifically asserted negligence against defendants Day for supplying materials to appellant while knowing of a moisture problem which existed under appellant's house; failing to warn appellant of the problems which could result when the flooring material furnished to appellant was exposed to moisture; installing the flooring without adequately protecting it from the moisture; and using flooring material that was defective and not suitable for the purpose for which it was intended and represented to be suitable. It is apparent that defendants Day's work was everything performed by defendants Day regarding appellant's new oak floor, and appellant's argument that the only "work" that would fall under the "business exclusions" of the State Farm policy would be the failure of defendants Day to address and correct the water problem under appellant's house prior to installing the hardwood floor is without merit.
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