This is a suit on a liability insurance policy. Defendant, West American Insurance Company, appeals from the order of the trial court denying its motion for summary judgment and granting summary judgment to plaintiff, Jones Masonry, Inc.
A review of the pleadings, affidavits and depositions filed in the cause reveals the following facts.
At all pertinent times, a contract оf liability insurance existed between the plaintiff Jones and defendant West American and the provisions of the policy pertinent to this case are set out in our discussiоn of the issues for review.
In December, 1983, plaintiff was the masonry subcontractor to the general contractor, Brown Construction Company, for construction of The Churсh of the Incarnation in Shelby County. While plaintiff’s employees were doing the brick work, mortar splashed or dropped onto some uncovered windows of the church. Twо of plaintiff’s employees were on the construction site cleaning the brick when the general contractor’s superintendent instructed them to clean the windows. Thеse employees did as instructed. However, the cleaning pro
Both parties filed motions for summary judgment and the only issue for review is whether the trial court erred in denying West American’s motion and granting Jones’ motion.
West American first contends that on the undisputed facts it is not liable under the terms of the policy and second that plaintiff did not meet a required condition precedent to recovery. On the other hand, Jones contends that under the same undisputed facts сoverage is provided. The dispute requires a construction of the policy which is a question of law for the court. Petty v. Sloan,
The policy as pertinent to this case provides:
COVERAGE B — PROPERTY DAMAGE LIABILITY
The company will pay on behalf of the Insured аll sums which the Insured shall become legally obligated to pay as damages because of
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Coverage B. property damage to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured ... even if any of the allegations of the suit are groundless, false or fraudulent, ...
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CONDITIONS
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5. Action Against Company. No action shall lie against the company unless, as a condition precedent thereto, there shall have been full compliаnce with all the terms of this policy, nor until the amount of the insured’s obligation to pay shall have been finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant and the company.
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In Cocke County Board of Highway Commissioners v. Newport Utilities Board,
It is the Court’s duty to enforce contracts according to their plain terms. Bob Pearsall Motors, Inc. v. Regal Chrysler-P., Inc., Tenn.,
In Guardian Life Insurance Co. of America v. Richardson,
“Contracts of insurance, like other contracts, are to be construed according to the sense and meaning of the terms which the parties have used, and if they are clear and unambiguous, their terms are to be taken and understood in their plain, ordinary, and popular sense. The rule of strict construction doеs not authorize a perversion of language, or the exercise of inventive powers for the purpose of creating an ambiguity where none exists, nor does it authorize the court to make a new contract for the parties or disregard the evidence (intention) as expressed, or to refine away terms of a contrаct expressed with suffi-*688 dent dearness to convey the plain meaning of the parties and embodying requirements, compliance with which is made the condition to liability therеon. Neither does the rule prevent the application of the principle that policies of insurance, like other contracts, must receive a reаsonable interpretation consonant with the apparent object and plain intent of the parties.” (citations omitted).
Where there is no ambiguity, it is the duty of the cоurt to apply to the words used their ordinary meaning and neither party is to be favored in their construction. Brown v. Tennessee Auto. Ins. Co.,
The clear language of the contract of insurance bеfore us requires the insurer to pay covered property damage only when “the insured shall become legally obligated to pay.” Since the same insuring clause рrovides that the insurer shall have the right and duty to defend any suit against the insured, it seems clear to this court that the provision of the policy requiring the insurer to pay sums which “the insured hаs become legally obligated to pay as damages,” is synonymous with “to pay all sums established by judgment entered against the insured.” This interpretation becomes even morе clear when we consider the provisions of Paragraph 5 under the Conditions of the policy. It is clear that there is no liability on the part of the company until the insured’s liability is determined, either by a judgment against the insured or by an agreed settlement between the insured, the company and the claimant.
In the case at bar, no judgment has beеn rendered against the insured Jones, and therefore under the clear terms of the policy, the plaintiff Jones has never become legally obligated to pay damages. Since Jones has not become legally obligated to pay damages, the insurer West American cannot be required to pay any sums on behalf of Jones.
Althоugh we have found no Tennessee case precisely on point, we have found an analogous case from our neighboring state of Arkansas. In Willett’s Plumbing v. Northwestern National Casualty Co.,
The rule is that, absent a demonstration of ball faith, a liability insurer acts within its ¡contract rights whenever it refuses to voluntarily settle a claim and insists there I be an adjudication of the matter on its merits, [citations omitted] Here, upon a review of the рleadings, affidavits and exhibits, no bad faith is demonstrated on the part of the appellee. It appears! the appellee insurer made an investigation and determined that only one of the claims justified payment without litigation. Therefore, since there was no genuine issue of fact presented as to bad faith on appеllee’s part in refusing payment of the claims and it being undisputed that the conditions precedent to a rigfyt of action against appellee have not been met, the trial court correctly granted the summary judgment, (emphasis added).
We agree with the reasoning of the Arkansas Supreme Court in Willett’s Plumb