Hankins v. Maryland Cas. Co.
| Docket Number: | 2011-CA-01093-SCT Linked Case(s): 2011-CA-01093-SCT |
|
| Supreme Court: |
Opinion Date: 12-13-2012 Holding: Motion for rehearing filed by Kaye Hankins is denied. |
|
| Additional Case Information: |
Topic: Insurance - Earth movement exclusion - Third-party liability claim - Products-completed operations hazard Non Participating Judge(s): King, J. Dissenting Author : Waller, C.J., Kitchens and Chandler, JJ., would grant Nature of the Case: Motion for Rehearing |
|
| Trial Court: |
Date of Trial Judgment: 07-01-2011 Appealed from: Madison County Circuit Court Judge: John Emfinger Case Number: CI-2009-0265-JE |
|
| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Kaye Hankins |
|
||
| Appellee: | Maryland Casualty Company/Zurich American Insurance Company | |||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
|
| Topic: | Insurance - Earth movement exclusion - Third-party liability claim - Products-completed operations hazard |
| Summary of the Facts: | Kaye Hankins entered into a home-construction contract with Elite Homes, Inc. An August 2001 soil-test report on the subject property recommended that “a stabilizing blanket of natural silty clays . . . and/or compacted fill soils having a maximum 7-foot thickness” was required “to minimize the Yazoo Clay . . . swell or heave potential to within limits tolerable to a strong slab foundation . . . .” Hankins received assurances from Elite that the Yazoo clay “was nothing to be concerned about.” She moved into the new home in April 2002. During Hankins’s first year in the home, she reported to Elite numerous cracks, leaks, and difficulties in closing doors and windows. After repeated, unsuccessful home repairs, Hankins commissioned an engineer to study the problems. In September 2009, Hankins filed a complaint against Elite. A “Default Judgment” of $645,200 was entered against Elite. In August 2010, Hankins filed a “Suggestion for Writ of Garnishment” against Elite’s commercial general liability insurer, Maryland Casualty Company/Zurich American Insurance Company. In October 2010, a default judgment of $645,200, plus interest, was entered against Maryland Casualty. Subsequently, Maryland Casualty filed a “Motion to Suspend Execution of Default Judgment against Maryland Casualty and For Leave to File Answer to Writ of Garnishment.” Maryland Casualty also filed a motion for summary judgment. The circuit court granted summary judgment in favor of, and set aside the default judgment against, Maryland Casualty. Hankins appeals. |
| Summary of Opinion Analysis: | The parties do not dispute that earth movement occurred or that Elite, in Maryland Casualty’s words, was negligent; but the parties strongly disagree about the legal implications of these undisputed facts. Maryland Casualty argues that “[t]he fact that [Elite] may have negligently failed to prevent the property damage caused by earth movement does not change the fact that earth movement was the cause of such property damage.” As such, Maryland Casualty argues that the “earth movement” exclusion found in the “Precision Portfolio Policy” entered into by Elite and Maryland Casualty applies. The exclusion provided that “[t]his insurance does not apply to . . . “property damage” . . . arising out of, caused by, resulting from, contributed to, aggravated by, or related to earthquake, landslide, mudflow, subsidence, settling, slipping, falling away, shrinking, expansion, caving in, shifting, eroding, rising, tilting or any other movement of land, earth or mud. With respect to . . . “property damage,” this exclusion only applies to the “products-completed operations hazard.” Hankins argues that the “earth movement” exclusion is inapplicable, “since the proximate cause of her loss was the negligence of the builder and . . . the losses were not caused by natural phenomena.” Language in exclusionary clauses must be clear and unmistakable, as those clauses are strictly interpreted. A court must refrain from altering or changing a policy where terms are unambiguous, despite resulting hardship on the insured. This case involves a third-party liability claim against a CGL policy, not a first-party claim for property damage under a homeowners’ policy. Unlike first-party homeowners’ policies, which draw on the relationship between perils that are either covered or excluded, third-party CGL policies insure for personal liability, and agree to cover the insured for his own negligence. Hankins (the homeowner), Elite (the general contractor), and Maryland Casualty (the CGL insurer for Elite) each was aware of the “earth movement” risk inherent in building a home on Yazoo clay. Yet only Hankins and Elite chose to assume that risk. Maryland Casualty avoided assumption of that risk in the “products-completed operations hazard” context by narrowing its CGL coverage through the “earth movement” exclusion. Thus, there is no genuine issue as to any material fact and Maryland Casualty is entitled to judgment as a matter of law. There is no dispute that the property damage which Hankins suffered was “contributed to, aggravated by, or related to . . . shrinking, expansion . . . shifting, . . . rising, [or] tilting . . . of land, earth, or mud.” Thus, the damage falls within the ‘earth movement’ exclusion of the policy and is not covered. |
Home | Terms of Use | About the JDP | Feedback | Using JDP | MC Law Library | Mississippi Supreme Court
