Court Opinion

ID: 1036331
Source: CourtListenerOpinion
Date Created: 2013-08-02 18:39:44.487842+00
Date Added: 2024-06-11T12:45:48.354009
License: Public Domain

Case: 12-10933   Date Filed: 08/02/2013   Page: 1 of 4

                                                       [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                  FOR THE ELEVENTH CIRCUIT

                           _____________

                            No. 12-10933
                           _____________

                D. C. Docket No. 3:10-cv-00111-WBH

CHAUCER CORPORATE CAPITAL (NO. 2) LIMITED,
HISCOX DEDICATED CORPORATE MEMBER LIMITED,
LANTANA INSURANCE LIMITED,
QBE SPECIALTY INSURANCE COMPANY,

                                                   Plaintiffs-Counter
                                                   Defendants-Appellees,

                                versus

NORMAN W. PASCHALL COMPANY, INC.,

                                                   Defendant-Counter
                                                   Claimant-Appellant.

                          ______________

             Appeal from the United States District Court
                for the Northern District of Georgia
                          ______________

                          (August 2, 2013)
                Case: 12-10933      Date Filed: 08/02/2013      Page: 2 of 4

Before MARTIN and FAY, Circuit Judges, and GOLDBERG, *Judge.

PER CURIAM:

       Insurer Underwriters Chaucer Corporate Capital (No. 2) Limited, et al.

(“Insurers”) filed a declaratory judgment action in district court after defendant

Norman W. Paschall Company, Inc. (“Paschall”) submitted an insurance claim for

a fire loss. The parties filed cross-motions for summary judgment. Specifically,

Insurers sought declaratory relief in the form of a ruling that they have no duty

under their insurance policy to indemnify Paschall for the loss. Paschall counter-

claimed for the recovery of damages caused by the fire.

       Under the terms of the insurance policy, Paschall warranted that “fire

protection sprinklers are provided throughout all buildings,” [Doc. 86-22 at 2], and

that it would maintain an automatic sprinkler system, [id. at 3]. Under the terms of

a “ Protective Safeguard Exclusion,” the policy excludes from coverage:

       loss or damage caused by or resulting from fire if, prior to the fire [Paschall]:

      1. Knew of any suspension or impairment in [the Automatic Sprinkler
System] and failed to notify [Insurers] of that fact; or

      2. Failed to maintain [the Automatic Sprinkler System], over which
[Paschall] had control, in complete working order.

*
 Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by
designation.
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              Case: 12-10933     Date Filed: 08/02/2013    Page: 3 of 4

[Doc 86-3 “Protective Safeguards”]

      We review a district court’s grant of summary judgment de novo. Holloman

v. Mail-Well Corp., 443 F.3d 832, 836 (11th Cir. 2006). Summary judgment is

appropriate when there are no genuine issues of material fact, and the evidence

compels judgment as a matter of law in favor of the moving party. Id. at 836-37.

      After reviewing the record, reading the parties’ briefs, and hearing oral

argument, we conclude that the district court correctly granted summary judgment

in favor of the Insurers. The district court properly found Insurers carried their

burden of showing that two exclusions apply to bar coverage. First, the district

court properly determined that coverage was barred by the exclusion that applies

where Paschall failed to maintain its automatic sprinkler system, over which it had

control, in complete working order, because Paschall’s maintenance employee had

turned off an entire system of the automatic sprinkler system. We likewise

conclude from the record that the district court correctly determined that the

exclusion applies that precludes coverage where Paschall fails to inform Insurers of

a known suspension or impairment in its automatic sprinkler system. We agree

with the district court’s application of general Georgia Agency Law when it found

that the maintenance employee’s knowledge that the sprinkler system had been

turned off was imputed to Paschall. Because a portion of a sprinkler system being

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              Case: 12-10933    Date Filed: 08/02/2013    Page: 4 of 4

“off” constitutes a suspension and/or impairment, and Paschall failed to inform

Insurers about this suspension and/or impairment, we conclude the district court

properly found there was no coverage.

      Finally, we agree with the district court’s rejection of Paschall’s argument

that the warranted “Savings” Clause restored coverage. Application of the

Warranty “Savings” Clause would be inappropriate, as coverage was barred by two

exclusions, rather than warranties. Consequently, we affirm the district court’s

grant of summary judgment in favor of Insurers.

      AFFIRMED.

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