Wilmington Island Const. Co., Inc. v. Cincinnati Ins. Co., 71791

• Decision Date: 24 June 1986
• Docket Number: No. 71791,71791
• Citation: 347 S.E.2d 308,179 Ga.App. 477
• Parties: WILMINGTON ISLAND CONSTRUCTION COMPANY, INC. v. CINCINNATI INSURANCE COMPANY.
• Court: Georgia Court of Appeals

Page 308

347 S.E.2d 308

179 Ga.App. 477

WILMINGTON ISLAND CONSTRUCTION COMPANY, INC. v. CINCINNATI INSURANCE COMPANY.

No. 71791.

Court of Appeals of Georgia.

June 24, 1986.

Delano Maurice, Savannah, for appellant.

Robert Jones, Carroll Van Reynolds, for appellee.

BEASLEY, Judge.

In this declaratory judgment action, petitioner Cincinnati Insurance Company denies a duty to defend the insured contractor against a suit by homeowners Mr. and Mrs. Lewis for damages resulting from a faulty sewer system. The home had been constructed by insured and sold to the Lewises. A septic tank was installed prior to purchase. The homeowners' action alleges that due to "negligent planning, construction, and/or implementation of on lot wastewater disposal systems, Plaintiffs have incurred losses to their home, and surrounding property as well as direct losses of shrubbery and trees, [t]hat Plaintiffs' use and enjoyment of their property has been diminished due to unhealthy and unsafe habitation ... [and] Plaintiffs' families have suffered public embarrassment as well as private discomfort and annoyances." In addition to actual damages, they sought exemplary damages and attorney fees.

Insurer moved for summary judgment which the trial court granted, reasoning that the comprehensive general liability insurance policy at issue on insured's premises excluded coverage of premises alienated by an insured, and the insured had sold and thus alienated the insured premises.

The insurance contract provides that insurer has a "duty to defend any suit against the insured seeking damages on account of such bodily injury or property damages [i.e., caused by an occurrence], even if any of the allegations of the suit are groundless, false or fraudulent ..." The exclusion relied upon by the trial court in granting summary judgment provides: "This insurance does not apply: ... (1) to property damages to premises alienated by the named Insured arising out of such premises or any part thereof."

1. Insured asserts the above exclusion is not relevant to the damages at issue in that the damages did not arise out of the alienated premises or any part thereof. Rather, it argues, the damages resulted from the installation of an additional drain field one month after alienation of the premises, and such damages were to grass, trees, and shrubs not part of the premises at the time of alienation, as they were added by the Lewises at a later date.

"That ascertainment of the parties' intention is the cardinal rule of construction (Cit.), is a rule of logic and reason. This is true because the sole purpose of a contract is to give expression to that concerning which the minds of the parties have met." Trust Co. of Ga. v. S. & W. Cafeteria, 97 Ga.App. 268, 282, 103 S.E.2d 63 (1958).

" 'Insurance is a contract and we will apply contract law principles to issues involving insurance. [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).

The insurance contract at issue provided coverage to insured up until the time the insured alienated the "premises." Exclusion (1) so specifies. "While the term 'premises' has varying meanings, which usually must be determined by the context but, yet, when used in a lease of realty without qualifying words, it has been held by the weight of authority to mean land and buildings, lands and tenements, land and its appurtenances, etc.' [Cit.]" Lunsford v....