DOLAN Et Al. v. AUTO OWNERS INSURANCE COMPANY
333 Ga. App. 601
Ga. Ct. App.2015Background
- Auto Owners Insurance Co. filed a declaratory judgment action to determine coverage under its commercial general liability policy for Air Mechanix's alleged defective duct installation.
- Dolan and Jackson alleged mold, illness, and property damage from Air Mechanix's March–June 2009 duct work and sought costs, medical expenses, and other damages.
- The policy provides $2,000,000 general aggregate and $2,000,000 products-completed operations aggregate, with Exclusions (j)(6) and (j)(7) and a Fungi Endorsement limiting fungal-related bodily injury and capping property damage at $50,000.
- The trial court held Exclusions (j)(6) and (j)(7) defeated property-damage claims and the Fungi Endorsement barred bodily injury; it granted summary judgment for Auto Owners.
- On appeal, the Georgia Court of Appeals affirmed in part and reversed in part: Exclusions (j)(6) and (j)(7) do not bar completed-work property damage; the Fungi Endorsement bars bodily injury (and caps related property damage).
- The court applied a contract-interpretation framework, construing ambiguities against the insurer and in favor of coverage where reasonable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do Exclusions (j)(6) and (j)(7) bar property damage for completed work under products-completed operations? | Dolan argued exclusions apply only to ongoing operations, not completed work. | Auto Owners argued exclusions apply to property damage arising from Air Mechanix's work. | Exclusion (j)(6) read narrowly applies to ongoing work; (j)(7) does not apply to products-completed operations; property-damage claims not barred. |
| Does the Fungi Endorsement bar bodily injury and cap damages for property damage? | Dolan contends endorsement does not bar their bodily-injury claims. | Auto Owners relies on the Fungi Endorsement to exclude bodily injury and cap damages. | Fungi Endorsement bars bodily injury and limits property damage to $50,000. |
Key Cases Cited
- Henderson v. Georgia Farm Bureau Mut. Ins. Co., 328 Ga. App. 396 (Ga. App. 2014) (contract ambiguities construed against insurer; read policy in light of insured's expectations)
- Hathaway Dev. Co. v. Am. Empire Surplus Lines Ins. Co., 301 Ga. App. 65 (Ga. App. 2009) (insurer bears burden and policy exclusions interpreted strictly against insurer)
- Am. Strategic Ins. Corp. v. Helm, 327 Ga. App. 482 (Ga. App. 2014) (burden on insurer; exclusions applied with strict construction)
- York Ins. Co. v. Williams Seafood of Albany, Inc., 273 Ga. 710 (Ga. 2001) (policy read as layman would read; ordinary meaning governs)
- Ryan v. State Farm Mut. Auto Ins. Co., 261 Ga. 869 (Ga. 1992) (look at policy as a whole and ordinary legal meaning of words)
- Transp. Ins. Co. v. Piedmont Const. Grp., LLC, 301 Ga. App. 17 (Ga. App. 2009) (breadth of exclusion; scope of “that particular part of real property”)