owners insurance company v. fulton county school district et al - complaint_0

8/2/2019 Owners Insurance Company v. Fulton County School District Et Al - Complaint_0

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IN THE UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF GEORGIA

ATLANTA DIVISION

OWNERS INSURANCE COMPANY ))

Plaintiff, ) Civil Action) File No. ______________

v. ))

FULTON COUNTY SCHOOL DISTRICT, )H.J. RUSSELL & COMPANY, )LEWIS TRUCKING & GRADING, INC., )PRO CARE ENVIRONMENTAL )SERVICES, LLC, GREENS LAWN )

& LANDSCAPING, INC., AMERICAN )CONTRACTORS INDEMNITY COMPANY, )AMERICAN SOUTHERN INSURANCE )COMPANY, and WESTCHESTER )FIRE INSURANCE COMPANY, )

)Defendants. )

COMPLAINT FOR DECLARATORY JUDGMENT

COMES NOW OWNERS INSURANCE COMPANY (hereinafter Owners)

and files this Complaint for Declaratory Judgment, showing the

Court as follows:

PARTIES

1.

Owners is an insurance corporation organized and existing

under the laws of the State of Ohio, with its principal place of

business in Michigan.

2.

Fulton County School District (School District) is a

political subdivision of the State of Georgia with the capacity

Case 1:12-cv-00558-JEC Document 1 Filed 02/22/12 Page 1 of 24


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to sue and be sued as provided by law. The School District is

subject to the jurisdiction and venue of this Court.

3.

H.J. Russell & Company (Russell) is a corporation

organized and existing under the laws of the State of Georgia

with its principal place of business and citizenship in Georgia.

Russell is subject to the jurisdiction and venue of this Court.

4.

Lewis Trucking & Grading, Inc. (Lewis) is a corporation

organized and existing under the laws of the State of Georgia

with its principal place of business and citizenship in Georgia.

Lewis is subject to the jurisdiction and venue of this Court.

5.

Pro Care Environmental Services, LLC (Pro Care) is a

corporation organized and existing under the laws of the State of

Georgia with its principal place of business and citizenship in

Georgia. Pro Care is subject to the jurisdiction and venue of

this Court.

6.

Greens Lawn & Landscaping, Inc. (Greens Lawn) is a



Georgia. Greens Lawn is subject to the jurisdiction and venue



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of this Court.

7.

American Contractors Indemnity Company (ACIC) is an

insurance corporation organized and existing under the laws of

the State of California with its principal place of business and

citizenship in California. ACIC is subject to the jurisdiction

and venue of this Court.

8.

American Southern Insurance Company (ASIC) is an insurance



Georgia. ASIC is subject to the jurisdiction and venue of this

Court.

9.

Westchester Fire Insurance Company (WFIC) is a corporation

organized and existing under the laws of the state of Iowa with

its principal place of business in Pennsylvania. WFIC is subject

to the jurisdiction and venue of this Court.

JURISDICTION AND VENUE

10.

This Court has original jurisdiction over this action under

the provisions of 28 U.S.C. 1332 because this action is between

citizens of different states and the amount in controversy



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exceeds the sum of $75,000, exclusive of interest and costs.

11.

Venue is proper in this Court pursuant to 28 U.S.C. 1391.

NATURE OF ACTION

12.

This is an action for declaratory judgment brought pursuant

to Rule 57 of the Federal Rules of Civil Procedure and 28 U.S.C.

2201, to declare the rights and other legal relations

surrounding questions of actual controversy that presently exist

between Owners and Defendants.

13.

A controversy of a judicial nature presently exists among

the parties, which demands a declaration by this Court in order

that Owners may have its rights and duties under the applicable

contract of insurance determined and avoid the possible accrual

of damages.

THE UNDERLYING CLAIMS

14.

Russell entered into a construction contract with the School

District for Phase 2 site work in conjunction with construction

of the Westlake High School located at 2400 Union Road in Fulton

County, Georgia.



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15.

As part of its contract, Russell agreed to construct

fourteen retaining walls, perform site grading and build the

athletic fields.

16.

Russell hired Lewis to complete the grading and Pro Care to

finish the final landscaping.

17.

Russell hired Greens Lawn to construct the retaining walls.

18.

In conjunction with the baseball field project, which was

within Russells original scope of Phase 2 work, Russell was

required to build a large retaining wall, Wall No. 12.

19.

Wall No. 12, as originally planned, was a modular block

retaining wall, and Greens Lawn contracted to construct it along

with the other walls.

20.

Greens Lawn hired Soil Reinforcement Design, Inc., to

design Wall No. 12.

21.

Green Lawns then constructed Wall No. 12 pursuant to the

design.



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22.

Wall No. 12 initially failed, and Greens Lawn commissioned

a new design and rebuilt the wall using a Diamond Pro system.

The project was substantially completed in April 2007.

23.

According to the School District, on or about January 2,

2008, the rebuilt Wall No. 12 allegedly exhibited signs of

failure.

24.

On March 5, 2008, the School District notified Russell of

the alleged signs of failure, demanding repairs.

25.

The rebuilt Wall No. 12 has never actually failed, and no

repairs have been performed.

26.

On or about April 7, 2011, the School District filed a

lawsuit against Russell, Lewis, Pro Care and Greens Lawn,

seeking damages caused by the alleged improper construction of

Wall No. 12 and other construction related issues arising from

the Phase 2 site work, the same being designated as civil action

file No. 2011-CV-198988 in the Superior Court of Fulton County,

State of Georgia (Underlying Lawsuit). A true and accurate

copy of the complaint filed by the School District in the



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Underlying Lawsuit is attached hereto as Exhibit A.

27.

In the Underlying Lawsuit, the School District seeks damages

in an amount in excess of $75,000, exclusive of interest and

costs.

28.

Russell filed cross claims against Lewis, Pro Care and

Greens Lawn, seeking indemnity and contribution.

29.

Russell also filed a third party complaint against ACIC,

ASIC and WFIC, seeking to recover on certain surety bonds issued

in connection with the Phase 2 site work project.

30.

Since the filing of the Underlying Lawsuit, the School

District has alleged that all retaining walls built by Greens

Lawn require replacement, even though none of them have actually

failed.

THE INSURANCE CONTRACT

31.

Owners issued a commercial general liability insurance

policy to Greens Lawn, policy number 064618-48731346, with an

effective policy period of March 21, 2007 to March 21, 2013 (the

Policy). A true and accurate copy of the applicable coverage



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form is attached hereto as Exhibit B.

32.

Greens Lawn seeks a defense and indemnity under the Policy

for the claims asserted by the School District and Russell in the

Underlying Lawsuit.

33.

After receiving notice of the Underlying Lawsuit, Owners

issued a letter to Greens Lawn in which Owners provided notice

of its reservation of rights to contest coverage under the Policy

for the claims asserted in the Underlying Lawsuit. A true and

accurate copy of the reservation of rights letter is attached

hereto as Exhibit C.

34.

After receiving notice of the Underlying Lawsuit, Owners

retained counsel to defend Greens Lawn against the complaint

subject to the reservation of rights.

35.

The Policy issued by Owners to Greens Lawn affords no

coverage for the claims and damages upon which the Underlying

Lawsuit is based. Therefore, Owners has no duty to defend or

indemnify Greens Lawn in the Underlying Lawsuit.



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36.

Under Coverage A of the Policy, the insuring agreement

provides, in pertinent part:

We will pay those sums that the insuredbecomes legally obligated to pay as damagesbecause of bodily injury or propertydamage to which this insurance applies....

Commercial General Liability Coverage Form, 55300 (7-05).

37.

Under Coverage A, the Policy issued to Greens Lawn further

provides, in pertinent part:

b. This insurance applies to bodilyinjury and property damage only if:

(1) The bodily injury or propertydamage is caused by anoccurrence that takes place inthe coverage territory;

(2) The bodily injury or propertydamage occurs during the policyperiod; and

(3) Prior to the policy period, noinsured listed under Paragraph 1.of WHO IS AN INSURED (Section II)and no employee authorized by youto give or receive notice of anoccurrence or claim, knew orshould have known that the bodily

injury or property damage hadoccurred, in whole or in part. Ifsuch a listed insured or authorizedemployee knew or should have known,prior to the policy period, thatthe bodily injury or propertydamage occurred, then any



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continuation, change or resumptionof such bodily injury orproperty damage during or after

the policy period will be deemed tohave been known prior to the policyperiod.


38.

The Policy provides:

Property damage means:

a. Physical injury to tangible property,including all resulting loss of use ofthat property. All such loss of useshall be deemed to occur at the time ofthe physical injury that caused it; or

b. Loss of use of tangible property that isnot physically injured. All such lossshall be deemed to occur at the time ofthe occurrence that caused it.


39.

The Policy provides:

Occurrence means an accident, includingcontinuous or repeated exposure tosubstantially the same general harmfulconditions.


40.

The Policy also provides:

This insurance does not apply to:...



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Bodily injury or property damage expected orintended from the standpoint of the insured.

Commercial General Liability Coverage Form, 55300 (7-05)

(Coverage Part A, Excl. a.).

41.

Under Coverage A, the Policy provides that the insurance

does not apply to:

j. Damage to Property

Property damage to:

(6) That particular part of realproperty on which insured or anycontractors or subcontractorsworking directly or indirectly onyour behalf are performingoperations, if the propertydamage arises out of thoseoperations; or

(7) That particular part of anyproperty that must berestored, repaired or replacedbecause your work wasincorrectly performed on it.

. . . .

Paragraph (7) of this exclusion does notapply to property damage included in theproducts-completed operations hazard.


42.

The Policy defines your work as:

(1) Work or operations performed by you or



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on your behalf; and

(2) Materials, parts or equipment furnished

in connection with such work oroperations.


43.

The Policy provides that your work includes:

(1) Warranties or representations made atany time with respect to the fitness,quality, durability, performance or use

of your work; and

(2) The providing of or failure to providewarnings or instructions.


44.

The Policy further provides that the insurance does not

apply to:

Property damage to your product arisingout of it or any part of it.


(Coverage Part A, Excl. k.)

45.

The Policy states that your product:

a. Means:

(1) Any goods or products, other thanreal property, manufactured, sold,handled, distributed or disposed ofby:



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(a) You;

(b) Others trading under yourname; or

(c) A person or organization whosebusiness or assets you haveacquired; and

(2) Containers (other than vehicles),materials parts or equipmentfurnished in connection with suchgoods or products.

b. Includes:

(1) Warranties or representations madeat any time with respect tot hefitness, quality, durability,performance or use of yourproduct; and

(2) The providing or failure to providewarnings or instructions.

c. Does not include vending machines orother property rented to or located forthe use of others but not sold.

Commercial General Liability Coverage Form, 55300 (7-05).\

46.

The Policy further provides that the insurance does not

apply to:

Property damage to your work arising outof it or any part of it and included in theproducts-completed operations hazard.


(Coverage Part A, Excl. l.)



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47.

The Policy provides that insurance does not apply to:

Property damage to impaired property orproperty that has not been physicallyinjured, arising out of:

(1) A defect, deficiency, inadequacy ordangerous condition in your product oryour work; or

(2) A delay or failure by you or anyoneacting on your behalf to perform acontract or agreement in accordance with

its terms.

This exclusion does not apply to the loss ofuse of other property arising out of suddenand accidental physical injury to yourproduct or your work after it has been putto its intended use.


(Coverage Part A, Excl. m.)

48.

The Policy defines impaired property as:

tangible property, other than your productor your work, that cannot be used or isless useful because:

a. It incorporates your product or yourwork that is known or thought to bedefective, deficient, inadequate or

dangerous; or

b. You have failed to fulfill the terms ofa contract or agreement

if such property can be restored to use by:



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a. The repair, replacement, adjustment orremoval of your product or yourwork; or

b. Your fulfilling the terms of thecontract or agreement.


COUNT ONE

49.

Owners hereby realleges and incorporates paragraphs 1

through 48 of this Complaint as if set forth fully herein.

50.

Under the terms of the Policy issued to Greens Lawn, there

is no coverage for damages or injuries which are not the result

of an accident or which are expected or intended from the

standpoint of the insured.

51.

Owners has no obligation to provide a defense to the

Underlying Lawsuit or indemnify Greens Lawn for damages or

injuries which were expected or intended, or which were known to

be substantially certain to occur due to the insureds knowledge.

52.

Owners has no obligation to provide a defense to the

Underlying Lawsuit or indemnify Greens Lawn because all of the

claims asserted against Greens Lawn arise from allegedly faulty



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construction, and faulty construction alone does not constitute

an occurrence or accident under the Policy.

53.

Owners is entitled to a judgment declaring that Greens Lawn

is afforded no coverage under the Policy for the damages sought

in the Underlying Lawsuit because those damages were not caused

by an accident, were intended or expected from the standpoint of

an insured, or were substantially certain to occur; and, as a

result, Owners has no duty to defend any Defendant in the

Underlying Lawsuit.

COUNT TWO

54.



55.

The Policy issued to Greens Lawn excludes property damage

to that particular part of real property on which Greens Lawn,

or any contractors or subcontractors working directly or

indirectly on behalf of Greens Lawn, was performing operations,

if the property damage arises out of those operations.

(Coverage A, Excl. j(6))



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56.

The damages sought against Greens Lawn in the Underlying

Lawsuit arise out of Greens Lawn operations at the Phase 2 site

project.

57.

Owners has no duty to defend or indemnify Greens Lawn

against the claims set forth in the Underlying Lawsuit because

the damages sought constitute property damage to real property

on which Greens Lawn was performing operations, and are excluded

from coverage.

58.



in the Underlying Lawsuit because those damages constitute

property damage to real property on which Greens Lawn was

performing operations; and, as a result, Owners has no duty to

defend any Defendant in the Underlying Lawsuit.

COUNT THREE

59.





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60.


to that particular part of any property that must be restored,

repaired or replaced because Greens Lawns work was incorrectly

performed on the property. (Coverage A, Excl. j(7))

61.


against the claims asserted in the Underlying Lawsuit because the

damages sought constitute property damage to property because

of Greens Lawns incorrectly performed work.

62.




property damage to that particular part of any property that

must be restored, repaired or replaced because Greens Lawns

work was incorrectly performed on the property; and, as a result,

Owners has no duty to defend any Defendant in the Underlying

Lawsuit.

COUNT FOUR

63.





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64.


to Greens Lawns product, arising out of Greens Lawns product

or any part of its product. (Coverage A, Excl. k.)

65.



the damages sought constitute property damage to the insureds

product, arising out of that product or any part of that product,

and are excluded from coverage.

66.


is afforded no coverage under the Policy for any damages because

of property damage to Greens Lawn product or arising

therefrom; and, as a result, Owners has no duty to defend any

Defendant in the Underlying Lawsuit.

COUNT FIVE

67.



68.


to Greens Lawns work, arising out of Greens Lawns work or any



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part of its work. (Coverage A, Excl. l.)

69.



the damages sought constitute property damage to the insureds

work, arising out of that work or any part of that work, and are

excluded from coverage.

70.




property damage to Greens Lawns work or arising therefrom;

and, as a result, Owners has no duty to defend any Defendant in

the Underlying Lawsuit.

COUNT SIX

71.



72.


to impaired property or property that has not been physically

injured arising out of a defect, deficiency or dangerous

condition in Greens Lawns work. (Coverage A, Excl. m(1))



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73.



the damages sought constitute property damage arising out of a

defect, deficiency or dangerous condition in Greens Lawns work,

and are excluded from coverage.

74.



of property damage arising out of a defect, deficiency or

dangerous condition in Greens Lawns work; and, as a result,

Owners has no duty to defend any Defendant in the Underlying

Lawsuit.

COUNT SEVEN

75.



76.


to impaired property or property that has not been physically

injured arising out of a delay or failure by Greens Lawn, or

anyone working on behalf of Greens Lawn, to perform a contract

or agreement in accordance with its terms. (Coverage A, Excl.



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m(2))

77.



the damages sought constitute property damage arising out of a

delay or failure by Greens Lawn to perform a contract or

agreement in accordance with its terms, and are excluded from

coverage.

78.



of property damage arising out of a delay or failure by Greens

Lawn to perform a contract or agreement in accordance with its

terms; and, as a result, Owners has no duty to defend any

Defendant in the Underlying Lawsuit.

COUNT EIGHT

79.



80.

The Underlying Lawsuit seeks an award of attorneys fees in

addition to compensatory damages.



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81.

The Policy affords no coverage for attorneys fees, as such

fees are not in compensation for a covered injury.

82.


is afforded no coverage for any attorneys fees sought in the

Underlying Lawsuit.

WHEREFORE, Owners prays that this Court enter judgment

declaring that Owners has no duty to defend or indemnify any

Defendant herein under the Policy for the claims asserted in the

Underlying Lawsuit; that this Court bind each and every named

party herein by said judgment; that Owners be awarded costs in

this action; and for such further relief as this Court may deem

just and appropriate.



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This 22nd day of February, 2012.

Respectfully submitted,

TALLEY, FRENCH & KENDALL, P.C.

S/ Michael C. KendallMichael C. KendallGeorgia Bar No. 414030Counsel for Plaintiff

3152 Golf Ridge Blvd.Suite 201

Douglasville, Georgia 30135Telephone: 770-577-3559Facsimile: [email protected]



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owners insurance company v. fulton county school district et al - complaint_0

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