Court Opinion

ID: 9567759
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:57:28.016205+00
Date Added: 2024-06-11T10:20:35.770221
License: Public Domain

Blackburn, Judge,
concurring in part and dissenting in part.
I agree with the majority that the trial court was correct in granting summary judgment to Farm Bureau on the issue of its liability for bad faith penalties. As Farm Bureau’s defenses raised reasonable questions of law, an award for damages and attorney fees for bad faith was not authorized. Colonial Life &c. Ins. Co. v. McClain, 243 Ga. 263 (253 SE2d 745) (1979).
With regard to the coverage provided under the insurance contract, I dissent from the majority and find that the insurance contract was not voided by the Schroeders’ actions.
Section I, Coverage “A” of the subject policy provides in part: “We cover:_ 9) $2500 on property on the residence premises used at any time or in any manner for any business purpose.” (Emphasis supplied.) The existence of a condition contemplated by the policy cannot void coverage under the policy. The majority opinion renders this provision of the policy absolutely meaningless and such result violates the basic law of interpretation of contracts.
“The general rule is that if an insurance company intends for the violation of a policy provision to void the policy ipso facto it must so provide in the contract.” Cotton States Mut. Ins. Co. v. Boatright, 100 Ga. App. 493, 495 (111 SE2d 645) (1959). See also Blackburn v. State Farm Fire &c. Co., 174 Ga. App. 157 (329 SE2d 284) (1985) and American Intl. Life Ins. Co. v. Hartsfield, 147 Ga. App. 213 (248 SE2d 518) (1978). In the case sub judice, the insurance policy did not provide specifically that the policy would be voided ipso facto if the Schroeders conducted a business pursuit in their residence.
In order for the Schroeders’ conduct to create a forfeiture, two clauses of the insurance contract must be construed together. The first clause, found on the first page of the policy, provided that the insurance described in the policy would be provided for the premium charged and compliance with all applicable provisions of the policy. The majority combines that statement with a special provision, found on the back jacket of the policy, which contained the following lan*307guage: “(a) The residence premises is not seasonal; (b) no business pursuits are conducted on the residence premises; (c) the residence premises is the only premises where the Named Insured or spouse maintains a residence other than business or farm properties; (d) the insured has no full time residence employee (s); (e) the insured has no outboard motor(s) or watercraft otherwise excluded under this policy for which coverage is desired. Exception, if any, to (a), (b), (c), (d) or (e) is entered on the Declaration Page. Absence of an entry means ‘no exceptions.’ ”
Decided November 12, 1993
Reconsideration denied December 8, 1993
James B. Duncan III, John J. Czura, for appellants.
Dunaway & Wallace, Roger W. Dunaway, Jr., for appellee.
“[T]he familiar rule that forfeitures are not favored, and that a contract will not be construed to work a forfeiture unless it is manifest that it was the intention of the parties that it should have that effect” requires that a specific provision voiding the policy is necessary. Southern Fire Ins. Co. v. Knight, 111 Ga. 622, 624 (36 SE 821) (1900). See also Boatright, supra. It is clear that rather than voiding the policy ipso facto, business pursuits on the premises are specifically contemplated by the policy. The policy excludes coverage where property damage arises from business pursuits, which is not the case here, and limits liability for damage to business property even where the loss is not caused by the business pursuits. The insurance policy at issue specifically provides that there is no coverage for property damage which arises out of business pursuits. Furthermore, the policy contains many conditions which expressly limit or exclude coverage for certain conduct and in certain instances. Knight, supra. Therefore, the insured is entitled to an equally specific provision stating that the policy will be voided in the event business pursuits are conducted on the premises, even though the loss does not arise out of the business pursuit.
I am authorized to state that Presiding Judge McMurray joins in this dissent.