Serrmi Products, Inc. v. Insurance Co. of Pennsylvania

• Decision Date: 13 September 1991
• Docket Number: No. A91A1007,A91A1007
• Citation: 411 S.E.2d 305,201 Ga.App. 414
• Parties: SERRMI PRODUCTS, INC. v. INSURANCE COMPANY OF PENNSYLVANIA.
• Court: Georgia Court of Appeals

Page 305

411 S.E.2d 305

201 Ga.App. 414

SERRMI PRODUCTS, INC. v. INSURANCE COMPANY OF PENNSYLVANIA.

No. A91A1007.

Court of Appeals of Georgia.

Sept. 13, 1991.

Reconsideration Denied Oct. 7, 1991.

Certiorari Denied Jan. 9, 1992.

Orr & Edwards, W. Fred Orr, II and James G. Edwards, II, Decatur, for appellant.

Goldner, Sommers & Scrudder, Stephen L. Goldner and C.G. Jester, Jr., Atlanta, for appellee.

CARLEY, Presiding Judge.

Appellee-defendant issued a "claims made" liability insurance policy to appellant-plaintiff. Upon a certain claim being made against it, appellant notified appellee and sought coverage. However, appellee denied that it afforded appellant coverage for the claim. Appellant then initiated the instant declaratory judgment action, seeking a declaration that it was afforded coverage by appellee for the claim. Appellee answered and, after discovery, moved for summary judgment. The trial court granted summary judgment in favor of appellee and appellant appeals.

"The liability insurance policy at issue in this case is referred to as a claims-made policy (sometimes called a discovery policy) as distinct from an occurrence policy. An occurrence policy is a policy in which the coverage is effective if the negligent act or omission occurs within the policy period, regardless of the date of discovery or the date the claim is made or asserted. [Cits.].... A claims-made policy is a policy 'wherein the coverage is effective if the negligent or omitted act is discovered and brought to the attention of the insurer within the policy term.' [Cits.] The essence, then, of a claims-made policy is notice to the carrier within the policy period." Gulf Ins. Co. v. Dolan, Fertig and Curtis, 433 So.2d 512, 514(2, 3) (Fla.1983).

The instant policy provided coverage for such claims as were made against appellant between March 1, 1987 and March 1, 1988. However, it is undisputed that the claim that is here at issue was not made against appellant and reported to appellee until after March 1, 1988.

The instant policy also provided for a general 60-day "automatic limited Extended Reporting Period" which commenced "with the end of the policy period." Under this provision, a claim which was first made during that 60-day period would be "deemed to have been made on the last day of the policy period...." However, it is undisputed that the claim that is here at issue was not made against appellant and reported to appellee within the 60-day period following March 1, 1988.

The instant policy also provided for a limited two-year "automatic limited Extended Reporting Period" which was applicable "only to claims as a result of an 'occurrence' covered by this policy which [had] been reported to [appellee] ... not later than 60 days after the end of this policy." (Emphasis omitted.) Although the claim that is here at issue had been made against appellant and reported to appellee within the two-year period following March 1, 1988, it is nevertheless undisputed that that claim was not itself based upon a covered "occurrence" which appellant had caused to be reported in writing to appellee within the 60-day period following March 1, 1988. The policy clearly required the insured to "see to it that [appellee was] notified promptly in writing of an 'occurrence' which may result in a claim." (Emphasis in original.)

It follows that, under the unambiguous terms of the policy, appellant is afforded no coverage for the claim that is here at issue. "We are fully aware of the rule of construction that requires ambiguities in an insurance policy to be construed in favor of the insured and against the insurer who wrote the policy.... But an equally valid rule is that an unambiguous policy requires no construction, and its plain terms must be given full effect even though they are beneficial to the insurer and detrimental to the insured. [Cits.]" Woodmen of the World Life Ins. Society v. Etheridge, 223 Ga. 231, 235, 154 S.E.2d 369 (1967). " 'It is the function of the court to construe the contract as written and not to make a new contract for the parties [Cit.].... An unambiguous contract will be construed to carry out the literal intent of the parties.' [Cit.]" Dixon v. Midland Ins. Co., 168 Ga.App. 319, 322(3), 309 S.E.2d 147 (1983). "Ambiguity is not to be created by lifting a clause or portion of the contract...