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Supreme Court of Georgia
July 12, 2013, Decided
[*456] [**588] Blackwell, Justice.
] Generally speaking, a standard commercial general liability (CGL) policy1 insures against a liability to pay damages for “ ‘bodily injury’ or ‘property damage’ [that] is caused by an ‘occurrence,’ ” subject to certain limits and exclusions. In this coverage litigation, the United States Court of Appeals for the Eleventh Circuit has certified two questions to this Court, both of which concern the meaning of “occurrence,” as that term is used in a standard CGL policy, and with respect to coverage for the potential liabilities of an insured for alleged “property damage” arising from faulty workmanship in residential construction. More specifically, the Eleventh Circuit has asked us to answer these questions:
1. Whether, for an “occurrence” to exist under a standard CGL policy, Georgia law requires there to be damage to “other property,” that is, property other than the insured's completed work itself.
2. If the answer to Question One (1) is in the negative, whether, for an “occurrence” to exist under [***2] a standard CGL policy, Georgia law requires that the claims being defended not be for breach of contract, fraud, or breach of warranty from the failure to disclose material information.
[*457] HDI-Gerling America Ins. Co. v. Morrison Homes, Inc., 701 F3d 662, 669 (4) (11th Cir. 2012). For the reasons that follow, we answer the first question in the negative, and we answer the second question in the affirmative as to fraud and in the negative as to breach of warranty.2
We begin with a brief summary of the background of this litigation. The record shows that HDI-Gerling America Insurance Company issued a standard CGL policy to Morrison Homes, Inc., a predecessor of Taylor Morrison Services, Inc.3 By the express terms of the policy, HDI-Gerling promised to “pay those sums that the insured becomes legally obligated to pay as damages because [**589] of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” The policy clarifies that
[t]his insurance applies to “bodily injury” and “property damage” only if:
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293 Ga. 456 *; 746 S.E.2d 587 **; 2013 Ga. LEXIS 618 ***; 2013 Fulton County D. Rep. 2184; 2013 WL 3481555
TAYLOR MORRISON SERVICES, INC. v. HDI-GERLING AMERICA INSURANCE COMPANY.
Prior History: Certified question from the United States Court of Appeals for the Eleventh Circuit.
HDI-Gerling Am. Ins. Co. v. Morrison Homes, Inc., 701 F.3d 662, 2012 U.S. App. LEXIS 23813 (11th Cir. Ga., 2012)
Disposition: [***1] Certified questions answered.
occurrence, insured, faulty workmanship, property damage, coverage, breach of warranty, nondefective, damages, subcontractor, insuring agreement, unexpected, happening, warranty, built, cases, general contractor, coverage limits, bodily injury, homeowners, pool
Insurance Law, Commercial General Liability Insurance, Exclusions, General Overview, Business Insurance, Occurrences, Coverage, Contracts Law, Contract Interpretation, Claim, Contract & Practice Issues, Policy Interpretation, Plain Language, Work Exclusion Clauses, Torts, Fraud & Misrepresentation, Actual Fraud, Elements, Products Liability, Theories of Liability, Breach of Warranty