City of College Park v. Georgia Interlocal Risk Management Agency
313 Ga. App. 239
Ga. Ct. App.2011Background
- In 2005, College Park hired a contractor to repair sewer pipes; contractor retained Sekisui SPR Americas, LLC as subcontractor.
- Sekisui invoiced College Park for unpaid amounts; College Park paid the contractor for work rendered, not directly to Sekisui.
- Sekisui sued the contractor for breach, then sued College Park asserting a payment-bond/ Public Works claim against College Park.
- College Park tendered Sekisui’s claim to GIRMA under their Member Coverage Agreement; GIRMA denied the claim relying on an exclusion.
- College Park sued GIRMA for breach of contract, declaratory judgment, and attorney fees; trial court granted partial summary judgment for College Park on breach and for GIRMA on attorney fees.
- On appeal, Court of Appeals held (A11A1116) that GIRMA was not obligated to provide coverage due to exclusion; (A11A1115) affirmed denial of attorney-fees under OCGA § 13-6-11.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GIRMA must defend/indemnify College Park for Sekisui’s claim. | College Park—Sekisui’s suit alleges payment for work; not necessarily breach-based; coverage extended to wrongful acts. | Exclusion for claims arising out of or connected with breach of contract bars coverage; underlying facts tie to breach. | GIRMA had no duty to cover under the exclusion. |
| Whether the exclusion for breach of contract applies to bar coverage for Sekisui’s claim. | The claim against College Park did not arise from a breach of contract.” | Exclusion focuses on genesis of the claims; the subcontractor’s loss arises from breach-connection; coverage not provided. | Exclusion applies; no coverage for the claim. |
| Whether College Park is entitled to attorney fees under OCGA 13-6-11. | Sought fees due to breach/coverage denial. | Without underlying coverage/damages, no fees under 13-6-11. | Attorney fees not awarded; underlying claim not covered. |
Key Cases Cited
- Continental Cas. Co. v. HSI Financial Svcs., 266 Ga. 260, 466 S.E.2d 4 (1996) (exclusion for dishonest acts; “arising out of” analysis (but-for))
- Mayor, etc., of Savannah v. Norman J. Bass Constr. Co., 264 Ga. 16, 441 S.E.2d 63 (1994) (bonding statutes; nonresident subcontractor recovery context)
- Video Warehouse v. Southern Trust Ins. Co., 297 Ga.App. 788, 678 S.E.2d 484 (2009) (interpretation of coverage under exclusions; but-for analysis)
- Eady v. Capitol Indem. Corp., 232 Ga.App. 711, 502 S.E.2d 514 (1998) (application of exclusionary clauses; required “but for” analysis)
- Dynamic Cleaning Svc. v. First Financial Ins. Co., 208 Ga.App. 37-38, 430 S.E.2d 33 (1993) (coverage denied where harm arose out of excluded conduct)