William v. Ass'n Insurance
737 S.E.2d 631
S.C. Ct. App.2012Background
- Waldes contracted with Johnson for a Permitting Contract to obtain BZA approvals for a barn and apartment.
- Johnson allegedly misrepresented compliance before the BZA, assuring variance/special exception would permit the planned barn with upstairs apartment.
- The BZA approved the variance and exception, but construction later violated height/size requirements; Johnson and Waldes terminated and then attempted another variance, which was denied.
- Arbitration claims followed alleging negligent misrepresentation, breach of fiduciary duty, and related damages; Johnson was insured by AIC under a CGL policy.
- Waldes sued AIC for breach of duty to defend/indemnify; trial court granted partial summary judgment to Waldes; this appeal followed.
- The court ultimately reverses, concluding AIC had no duty to defend Johnson due to exclusions, and Waldes’ requested fees are not recoverable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Duty to defend exist | Walde: allegations trigger property damage caused by an occurrence; duty to defend Johnson attaches. | AIC: no duty due to exclusions, particularly A.2(j)(6); claims are excluded. | No duty to defend; exclusions apply (A.2(j)(6)). |
| Exclusion applicability (your work/PCOH) | Exclusions do not bar coverage because property damage may be covered or not clearly excluded. | Exclusion A.2(j)(6) bars coverage for damage to property where work was incorrectly performed. | Exclusion A.2(j)(6) precludes coverage; no duty to defend. |
Key Cases Cited
- Auto-Owners Ins. Co. v. Carl Brazell Builders, Inc., 356 S.C. 156 (2003) (economic loss alone not covered; requires physical injury for property damage)
- Isle of Palms Pest Control Co. v. Monticello Ins. Co., 319 S.C. 12 (Ct.App.1994) (duty to defend determined from third-party complaint allegations)
- Collins Holding Corp. v. Wausau Underwriters Ins. Co., 379 S.C. 573 (2008) (policy exclusions construed against insurer; coverage depends on allegations)
- Century Indem. Co. v. Golden Hills Builders, Inc., 348 S.C. 559 (2003) (addressing exclusions for faulty workmanship and related property damage)
- Crossmann Cmties. of N.C., Inc. v. Harleysville Mut. Ins. Co., 395 S.C. 40 (2011) (ambiguity of occurrence definition in property damage context)
- L-J, Inc. v. Bituminous Fire & Marine Ins. Co., 366 S.C. 117 (2005) (examines whether claims involve an occurrence)