Liberty Surplus Insurance Corporation v. Norfold Southern Railway Co.
684 F. App'x 788
| 11th Cir. | 2017Background
- NaturChem contracted with Norfolk Southern under a Crossing Maintenance Agreement (2005) to provide ongoing vegetation control and monitoring at railroad crossings in Georgia; the contract required continuous maintenance and monitoring throughout its term.
- NaturChem purchased a Railroad Liability Policy from Liberty covering May 19, 2011–May 19, 2012.
- In 2011 a motorist was struck by a train at a crossing; litigation alleged overgrown vegetation obstructed visibility. NaturChem and Norfolk Southern were defendants.
- Liberty provided defense subject to a reservation of rights and then sought declaratory relief arguing the Policy’s Completed Work Exclusion barred coverage for the motorist’s injury.
- Liberty argued the exclusion applied because NaturChem’s herbicide application at the crossing had been completed before the accident, triggering subsections (2) or (3) of the exclusion; Norfolk Southern/NaturChem argued “work” was the contract’s ongoing maintenance/monitoring and thus not completed.
- The district court granted summary judgment for Norfolk Southern; the Eleventh Circuit affirmed, holding the Completed Work Exclusion did not preclude coverage because the Policy’s definition of “work” encompassed ongoing obligations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Policy's Completed Work Exclusion bars coverage for the motorist's injury | "Work" means the Crossing Contract's continuous maintenance/monitoring, so work was not completed and exclusion does not apply | "Work" at the job location was completed when herbicide application/spot checks were finished, so subsections (2) or (3) trigger the exclusion | The court held the exclusion does not apply; "work" is the contract's ongoing maintenance/monitoring and was not completed |
| Proper interpretation of "work" under Georgia law and whether subsections (2) and (3) adopt a different concept of "work" | Apply the Policy's plain, contract-based definition of "work" to all subsections; ambiguity construed for insured | Liberty urged reading subsections (2) and (3) to limit "work" to discrete tasks (spraying/spot checks) | The court applied the same definition of "work" to all subsections and rejected Liberty's strained construction; exclusions must be clear and are construed narrowly |
Key Cases Cited
- Chalfonte Condo. Apartment Ass’n, Inc. v. QBE Ins. Corp., 561 F.3d 1267 (11th Cir.) (insurance-contract interpretation is reviewed de novo)
- Admiral Ins. Co. v. Feit Mgmt. Co., 321 F.3d 1326 (11th Cir.) (apply forum state substantive law in diversity cases)
- Hurst v. Grange Mut. Cas. Co., 470 S.E.2d 659 (Ga. 1996) (insurance contracts are governed by plain and unambiguous terms)
- Ga. Farm Bureau Mut. Ins. Co. v. Smith, 784 S.E.2d 422 (Ga. 2016) (policy read as a layman would; plain language controls)
- SawHorse, Inc. v. S. Guar. Ins. Co. of Ga., 604 S.E.2d 541 (Ga. Ct. App.) (work essential to a contract that makes project usable is not "completed")