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Noble v. Wellington Assocs., Inc.

Court of Appeals of Mississippi

November 19, 2013

ARTHUR H. NOBLE, INDIVIDUALLY AND NOBLE REAL ESTATE, INC., APPELLANTS
v.
WELLINGTON ASSOCIATES, INC., WILLIAM D. HORNE, AND THE OHIO CASUALTY INSURANCE COMPANY, APPELLEES

DATE OF JUDGMENT: 07/30/2012.

Page 715

MADISON COUNTY CIRCUIT COURT, HON. JOHN HUEY EMFINGER, TRIAL JUDGE.

FOR APPELLANTS: DONALD A. MCGRAW JR., JOHN PRINCE MARTIN.

FOR APPELLEES: PATRICK M. TATUM, DAVID A. BARFIELD, KIMBERLY PAIGE MANGUM, STEVEN CAVITT COOKSTON, WILLIAM LOCK MORTON III.

BEFORE LEE, C.J., ROBERTS AND MAXWELL, JJ. LEE, C.J., IRVING, P.J., BARNES, ISHEE, ROBERTS, CARLTON AND FAIR, JJ., CONCUR. JAMES, J., DISSENTS WITHOUT SEPARATE WRITTEN OPINION. GRIFFIS, P.J., NOT PARTICIPATING.

OPINION

Page 716

MAXWELL, J.:

¶1. Noble Real Estate (Noble) hired subcontractor Harris Construction Company (Harris) to perform dirt work and site preparation for a new home Noble was building. As part of Noble and Harris's agreement, Harris obtained an additional-insured endorsement to its commercial general liability (CGL) insurance policy with Ohio Casualty Insurance and named Noble as an additional insured. But the insurance provided under the endorsement was " limited." The coverage " only" applied to " liability . . . caused in whole or in part by [Harris's] ongoing operations performed for [Noble]."

¶2. Harris's " ongoing operations" performed for Noble ended in March 2006. Afterwards, Noble built a house on the site, which it sold in September 2007. Before closing, the homeowners noticed cracks in the home, but purchased it anyway. When the cracks got worse, they sued Noble. As part of their claim, they alleged foundation issues related to faulty dirt work.

¶3. Noble now claims Ohio Casualty owed it a duty to defend the homeowners' lawsuit and indemnify Noble for any liability, based on the additional-insured endorsement. But the endorsement protected Noble against lawsuits arising out of accidents occurring during the time Harris performed dirt work--it was not a performance bond guaranteeing Harris's dirt work. Because the endorsement was clear that it only covered liability that arose from " ongoing operations," and because the homeowners' damage did not arise until well after Harris had completed its operations, the homeowners' claims against Noble did not trigger coverage under the additional-insured endorsement.

¶4. For these reasons, the circuit court properly granted Ohio Casualty summary judgment on Noble's coverage-based claims. We also find summary judgment was properly granted in favor of all three defendants for the remainder of Noble's claims. Thus, we affirm.

Background Facts and Procedural History

I. Certificate of Insurance

¶5. For years, Noble had used Harris as a subcontractor for its dirt work and site preparation. Noble asked Harris to list it

Page 717

as an additional insured on Harris's CGL policy. So Harris worked with its insurance agent, William D. Horne of Wellington Associates, Inc., to obtain an additional-insured endorsement.

¶6. The endorsement limited the insurance provided to the additional insured to " liability . . . [c]aused in whole or in part by [Harris's] ongoing operations performed for that insured." The endorsement further limited coverage, expressly excluding " 'property damage' occurring after" :

(1) All work . . . on the project . . . [was] performed by or on behalf of the additional insured[s] at the site where the covered operations have been completed; or
(2) That portion of " your [(Harris's)] work" out of which the . . . damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as part of the same project.

¶7. Wellington Associates sent Noble a certificate of insurance. The certificate informed Noble that it, as " certificate holder," was a " named Additional Insured in regard to General Liability required by written contract." The certificate explicitly stated it was being issued for Noble's information only, did not confer on Noble any rights, and did not alter coverage under Harris's general liability policy. ...


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