Auto-Owners Ins. Co. v. Ovation Condo. Ass'n

1

AUTO-OWNERS INSURANCE COMPANY, Plaintiff-Appellee, v. OVATION CONDOMINIUM ASSOCIATION, INC., Defendant-Appellant, ALYS W. COX, Defendant.

AUTO-OWNERS INSURANCE COMPANY, Plaintiff-Appellee, v. OVATION CONDOMINIUM ASSOCIATION, INC., Defendant-Appellant, BRIANNE K. WYKIS, Defendant.

Nos. 23-13111, 23-13112

United States Court of Appeals, Eleventh Circuit

May 28, 2024

DO NOT PUBLISH

Appeal from the United States District Court for the Northern District of Georgia D.C. Docket Nos. 1:21-cv-05326-LMM 1:21-cv-05328-LMM Before JORDAN, GRANT, and LAGOA, Circuit Judges.

PER CURIAM:

In two separate Georgia state-court proceedings, Alys Cox and Brianne Wykis sued Ovation Condominium Association, alleging that Ovation had permitted exhaust fumes from a backup diesel generator to enter their units, causing both personal injury and property damage. In response, Ovation's insurer AutoOwners Insurance Co., filed the two identical federal suits now on appeal, each seeking declaratory relief stating that Auto-Owners had no obligation to defend Ovation from the Cox and Wykis lawsuits. Because Ovation unambiguously "occupied" the generator and its surrounding space Ovation's insurance policy excludes coverage for the Cox and Wykis claims. We therefore affirm the district court's grant of summary judgment to AutoOwners in both suits.

I.

Ovation maintained a diesel generator as a backup power source for its condo building, operating it during power failures and monthly or bimonthly tests. The generator was housed in a utility closet in the basement of the building, below residents' units. Ovation was responsible for managing and maintaining all of the common and shared property in the building, which included the generator and the closet. Although the exhaust from the generator was supposed to safely vent outside, Cox and Wykis allege in their suits that Ovation's negligence caused fumes from the generator to seep into the residents' units through the exterior walls of the condo building.

Auto-Owners claims that the pollution-exclusion provision in Ovation's commercial general liability policy applies to these two suits. Subject to exceptions not applicable here, that policy states that Ovation's policy "does not apply to":

"Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" . . . [a]t or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured.

Ovation does not dispute that the toxic substances emitted as exhaust by the diesel generator qualify as "pollutants" within the meaning of this provision. It is also undisputed that the generator and the utility closet, from which the pollutants were discharged, were not "rented or loaned to" Ovation. So the only question in this suit is whether Ovation ever "owned or occupied" the two.

Without deciding whether Ovation had ever "owned" the generator and closet, the district court ruled that Ovation "occupied" them because it managed the space and regularly operated the generator. It therefore granted summary judgment to Auto-Owners, ruling that Auto-Owners had no duty to defend or indemnify Ovation against the Cox and Wykis suits. This is Ovation's appeal.

II.

We review a district court's interpretation of the terms of an insurance contract de novo. Ace Am. Ins. Co. v. Wattles Co., 930 F.3d 1240, 1251 (11th Cir. 2019).

III.

Both parties agree that Georgia law applies to the interpretation of Ovation's insurance policy. Under Georgia law, when interpreting an insurance policy, the "cardinal rule" is "to determine and carry out the intent of the parties." Nat'l Cas. Co. v. Georgia Sch. Bds. Ass'n-Risk Mgmt. Fund, 818 S.E.2d 250, 253 (Ga. 2018). The policy is to be read "as a layman would," and "not as it might be analyzed by an insurance expert or an attorney." State Farm Mut. Auto. Ins. Co. v. Staton, 685 S.E.2d 263, 265 (Ga. 2009) (quotation omitted). "[E]xclusions will be strictly construed against the insurer and in favor of coverage." Nat'l Cas. Co., 818 S.E.2d at 253.

If a policy's language is unambiguous, the contract's plain terms must be enforced. State Farm Mut. Auto Ins. Co., 685 S.E.2d at 266. But if the policy is found to be ambiguous, then its provisions are "construed liberally against the insurer and most favorably for the insured." Id. at 265. Georgia courts find an insurance contract ambiguous "only if its terms are subject to more than one reasonable interpretation." Id. Courts may not "strain the construction of the policy so as to discover an ambiguity." Id. at 265-66 (quotation omitted). If "the language fixing the extent of liability of an insurer is unambiguous and but one reasonable construction is possible, the court must expound the contract as made." Id. (quotation omitted).

Ovation's insurance policy does not define the term "occupied." Accordingly, we do as Georgia courts would do, looking to that word's "plain, ordinary and popular" meaning. Record Town, Inc. v. Sugarloaf Mills Ltd. P'ship of Georgia, 687 S.E.2d 640, 643 (Ga.App. 2009); see also O.C.G.A. § 13-2-2(2). Such meaning can be derived by reference to contemporary dictionary definitions. See Record Town, Inc., 687 S.E.2d at 643; Ace Am. Ins. Co., 930 F.3d at 1259. Black's Law Dictionary defines "occupy" as to "seize or take possession of"; "take up the extent, space, room, or time of"; "hold possession of; to be in actual possession of"; "employ; to possess or use the time or capacity of"; "live or stay in (a place)." Occupy, Black's Law Dictionary (11th ed. 2019). Similarly, the Supreme Court of Georgia, in a case interpreting the meaning of the statutory phrase "occupier of real property," consulted dictionary definitions which defined "occupy" as meaning "to take possession of or inhabit" "to dwell or reside in"; and "to have, hold, or take as a separate space, possess, or reside in." Nuckles v. State, 853 S.E.2d 81, 86-87 (Ga. 2020) (alterations adopted) (quotations...