Sc Farm Bureau Mutual Ins. Co. v. S.E.C.U.R.E. Underwriters Risk Retention Group, 3263
| Decision Date | 17 September 2001 |
| Docket Number | 3263 |
| Parties | South Carolina Farm Bureau Mutual Insurance Company, Appellant/Respondent, v. S.E.C.U.R.E. Underwriters risk Retention Group, Respondent/Appellant and Ralph Garrison, Mary Garrison, Garrison Pest Control, Inc., Jack C. Purvis, Susan Purvis, and Jordan Purvis, a minor under the age of fourteen (14) years, Respondents. OpinionSOUTH CAROLINA Court of Appeals Heard |
| Court | North Carolina Court of Appeals |
Appeal From Florence County, James E. Brogdon, Jr., Circuit Court Judge
ORDER WITHDRAWING AND SUBSTITUTING OPINION
Pursuant to both parties' Petition for Rehearing, and this Court's granting of said petitions, it is ordered that the opinion heretofore filed, Opinion No. 3263, filed November 27, 2000, be withdrawn and the attached Opinion be substituted therefore.
IT IS SO ORDERED.
Louis D. Nettles, of Nettles, McBride & Hoffmeyer, of Florence, for appellant/respondent.
Carlton B. Bagby, of Columbia, for respondent/appellant.
In this declaratory judgment action, South Carolina Farm Bureau (Farm Bureau) and S.E.C.U.R.E. Underwriters Risk Retention Group (SECURE) sought to determine insurance coverage for injuries sustained by Jordan Purvis, a minor, resulting from a dog bite she sustained while on the premises of Garrison Pest Control, Incorporated. Jordan and her parents brought an action for damages against Ralph Garrison, Mary Garrison, and Garrison Pest Control, Inc. Farm Bureau and SECURE sought a declaration of the extent of their coverages. The circuit court determined both carriers had a duty to defend and indemnify the parties in the underlying personal injury action. The court also held Farm Bureau's coverage was primary and SECURE's coverage was excess. Farm Bureau appealed and SECURE cross-appealed the order. We affirm.
Farm Bureau issued Ralph and Mary Garrison a homeowner's insurance policy for their home in Florence, South Carolina. The Farm Bureau policy provided personal liability coverage subject to certain provisions and exclusions. SECURE provided insurance coverage to Garrison Pest Control through a commercial general liability policy. Garrison Pest Control is owned by the Garrisons and Scott Newell.
On December 12, 1994, Jordan Purvis, a four-year-old girl, was bitten by the Garrisons' dog while lawfully on the business premises of Garrison Pest Control. The parties stipulated the dog was owned and kept by the Garrisons as their family pet, was not kept for security purposes, as a mascot, or in connection with the pest control business, and that Mary Garrison frequently brought the dog to Garrison Pest Control from the Garrison home when she did not have an alternative place to leave the dog when she came to the office.1 The dog did not serve any function associated with the business of general pest control or extermination.
Jack and Susan Purvis are Jordan's parents. Jack, Susan, and Jordan made claims against Ralph Garrison, Mary Garrison, and Garrison Pest Control for injuries Jordan sustained as a result of the dog bite. Insurance coverage was sought from both Farm Bureau and SECURE. Both carriers provided legal defenses under reservations of rights.
Farm Bureau filed this declaratory judgment action seeking a determination as to whether it had a duty to defend and indemnify its insureds, Ralph and Mary Garrison. SECURE counterclaimed and cross-claimed for similar relief. All parties stipulated to the relevant facts and the admissibility of certain documents, which are part of the record.
After a hearing, the circuit court found both Farm Bureau and SECURE had duties to defend and, if necessary, to indemnify the parties in the underlying personal injury action. The court further held Farm Bureau's coverage was primary and SECURE's coverage was excess. These appeals follow.
"A suit for declaratory judgment is neither legal nor equitable, but is determined by the nature of the underlying issue." Felts v. Richland County, 303 S.C. 354, 356, 400 S.E.2d 781, 782 (1991). A suit to determine coverage under an insurance policy is an action at law. Therefore, this Court's jurisdiction "is limited to correcting errors of law and factual findings will not be disturbed unless unsupported by any evidence." State Farm Mut. Auto. Ins. Co. v. James, 337 S.C. 86, 93, 522 S.E.2d 345, 348-49 (Ct. App. 1999); see also Townes Assocs. v. City of Greenville, 266 S.C. 81, 221 S.E.2d 773 (1976).
Both Farm Bureau and SECURE appeal the order of the circuit court finding they have a duty to defend and, if necessary, to indemnify the parties in the underlying personal injury action. Both carriers contend the other is solely responsible for the defense and indemnification of the parties. We disagree.
Farm Bureau argues the circuit court erred in requiring it to defend and indemnify the Garrisons because (1) the incident occurred on premises which were owned by the Garrisons, but not described in Farm Bureau's policy, and (2) the incident arose from a business pursuit. We disagree.
Under the Garrisons' homeowner's policy, Farm Bureau agreed that:
If claim is made or suit is brought against an insured for damages because of bodily injury . . . we will: 1. Pay up to our limits of liability for the damages which the insured is legally liable; and 2. Provide for a defense at our expense by counsel of our choice, even if the suit is groundless. . . .
Farm Bureau also agreed to "pay the necessary medical expenses that are incurred within three years from the date of an accident causing bodily injury." The policy applied to a person off the insured location if the bodily injury "[was] caused by an animal owned by or in the care of the insured." The policy excluded coverage where there was "bodily injury or property damage . . . arising out of business pursuits of an insured . . . [or] arising out of a premises . . . owned by the insured . . . that is not an insured location." Relying on these exclusions, Farm Bureau maintains the homeowner's policy excludes coverage for the dog bite in this case.
"[A]n insurer must show a causal connection between a loss and an exclusion before the exclusion will limit coverage under the policy." South Carolina Ins. Guar. Ass'n v. Broach, 291 S.C. 349, 351, 353 S.E.2d 450, 451 (1987). At the beginning of both policy exclusions relied on by Farm Bureau are the words "arising out of." In McPherson v. Michigan Mutual Insurance Co., 310 S.C. 316, 320, 426 S.E.2d 770, 771 (1993), our supreme court held that "for the purpose of construing an exclusionary clause in a general liability policy, 'arising out of' should be narrowly construed as 'caused by.'" Furthermore, "[w]here the words of a policy are capable of two reasonable interpretations, that construction will be adopted which is most favorable to the insured." Id.
No South Carolina case specifically addresses whether a homeowner's policy provides coverage for a dog bite that occurs on a business premise away from the home. However, a Missouri court addressed this issue in Lititz Mutual Insurance Co. v. Branch, 561 S.W.2d 371 (Mo. App. 1977). In Lititz, a dog was taken from the residence to the business premises of a dairy where it was tethered. Subsequently, the dog bit a child. The homeowner's policy insurer filed a declaratory judgment action alleging it did not have a duty to defend and indemnify the insured. The policy exclusions in Lititz were very similar to those in this case. That policy excluded coverage for bodily injury or property damage arising out of business pursuits of any insured and injury or damage arising out of any premises, other than the insured premises, owned, rented or controlled by any insured. The Lititz court reasoned the dog bite was the result of personal tortious conduct and was not causally related to the business premises. The court stated:
Liability for injuries caused by an animal owned by an insured arises from the insured's personal tortious conduct in harboring a vicious animal, not from any condition of the premises upon which the animal may be located.
We find this reasoning persuasive. Utilizing the definition of "arising out of" from McPherson, and the analysis from Lititz, we conclude the fact that the dog bite occurred on the business premises of Garrison Pest Control does not necessarily mean that it was "caused by" the business pursuits or business premises. Rather, the dog bite may have been caused by the alleged tortious conduct of bringing the family pet to the business premises.
We agree with the circuit court's conclusion that Farm Bureau's policy exclusions are thus inapplicable to the injury sustained by Jordan Purvis and affirm the circuit court's determination that Farm Bureau has a duty to defend and, if necessary, indemnify the Garrisons in the underlying action.
SECURE contends that the circuit court erred in finding it has a duty to defend and, if necessary, indemnify the parties in the underlying action. We disagree.
SECURE argues the claims asserted in the underlying action do not relate to the duties of Ralph or Mary Garrison as officers or employees of Garrison Pest Control. SECURE maintains its policy does not provide coverage for this incident because the dog was personally owned by the Garrisons and their potential liability for the failure to supervise the dog was personal to them and did not originate with any risk connected with their employment. SECURE further argues Mary Garrison is not an insured under the policy because she was not an officer, director, or employee acting within the scope of her official duties when this incident occurred.
SECURE overlooks, however, the...
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