Cherrington v. Erie Ins. Prop.

231 W.Va. 470

745 S.E.2d 508

Lisbeth L. CHERRINGTON, Plaintiff Below;The Pinnacle Group, Inc., A West Virginia Corporation; and Anthony Mamone, Jr., An Individual, Defendants and Third–Party Plaintiffs Below, Petitioners

v.ERIE INSURANCE PROPERTY AND CASUALTY COMPANY, Third–Party Defendant Below, Respondent.

No. 12–0036.

Supreme Court of Appeals of West Virginia.

Submitted March 27, 2013.

Decided June 18, 2013.

Limitation Recognized

Colo.Rev.Stat. § 13–20–808(3) (2010)

S.C.Code Ann. § 38–61–70(B)(2) (2011)

Syllabus by the Court

1. “Determination of the proper coverage of an insurance contract when the facts are not in dispute is a question of law.” Syllabus point 1, Tennant v. Smallwood, 211 W.Va. 703, 568 S.E.2d 10 (2002).

2. “The interpretation of an insurance contract, including the question of whether the contract is ambiguous, is a legal determination that, like a lower court's grant of summary judgement [sic], shall be reviewed de novo on appeal.” Syllabus point 2, Riffe v. Home Finders Associates, Inc., 205 W.Va. 216, 517 S.E.2d 313 (1999).

3. “A circuit court's entry of summary judgment is reviewed de novo.” Syllabus point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

4. “In determining whether under a liability insurance policy an occurrence was or was not an ‘accident’—or was or was not deliberate, intentional, expected, desired, or foreseen—primary consideration, relevance, and weight should ordinarily be given to the perspective or standpoint of the insured whose coverage under the policy is at issue.” Syllabus, Columbia Casualty Co. v. Westfield Insurance Co., 217 W.Va. 250, 617 S.E.2d 797 (2005).

5. “An insurance policy should never be interpreted so as to create an absurd result, but instead should receive a reasonable interpretation, consistent with the intent of the parties.” Syllabus point 2, D'Annunzio v. Security–Connecticut Life Insurance Co., 186 W.Va. 39, 410 S.E.2d 275 (1991).

6. Defective workmanship causing bodily injury or property damage is an “occurrence” under a policy of commercial general liability insurance. To the extent our prior pronouncements in Syllabus point 3 of Webster County Solid Waste Authority v. Brackenrich and Associates, Inc., 217 W.Va. 304, 617 S.E.2d 851 (2005); Syllabus point 2 of Corder v. William W. Smith Excavating Co., 210 W.Va. 110, 556 S.E.2d 77 (2001); Syllabus point 2 of Erie Insurance Property and Casualty Co. v. Pioneer Home Improvement, Inc., 206 W.Va. 506, 526 S.E.2d 28 (1999); and Syllabus point 2 of McGann v. Hobbs Lumber Co., 150 W.Va. 364, 145 S.E.2d 476 (1965), and their progeny are inconsistent with this opinion, they are expressly overruled.

7. “Although our standard of review for summary judgment remains de novo, a circuit court's order granting summary judgment must set out factual findings sufficient to permit meaningful appellate review. Findings of fact, by necessity, include those facts which the circuit court finds relevant, determinative of the issues and undisputed.” Syllabus point 3, Fayette County National Bank v. Lilly, 199 W.Va. 349, 484 S.E.2d 232 (1997).

8. “Language in an insurance policy should be given its plain, ordinary meaning.” Syllabus point 1, Soliva v. Shand, Morahan and Co., Inc., 176 W.Va. 430, 345 S.E.2d 33 (1986), overruled on other grounds by National Mutual Insurance Co. v. McMahon and Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by Potesta v. United States Fidelity and Guaranty Co., 202 W.Va. 308, 504 S.E.2d 135 (1998).

9. “Where the provisions of an insurance policy contract are clear and unambiguous they are not subject to judicial construction or interpretation, but full effect will be given to the plain meaning intended.” Syllabus, Keffer v. Prudential Insurance Co. of America, 153 W.Va. 813, 172 S.E.2d 714 (1970).

10. “An insurance company seeking to avoid liability through the operation of an exclusion has the burden of proving the facts necessary to the operation of that exclusion.” Syllabus point 7, National Mutual Insurance Co. v. McMahon and Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by Potesta v. United States Fidelity and Guaranty Co., 202 W.Va. 308, 504 S.E.2d 135 (1998).

11. “Where the policy language involved is exclusionary, it will be strictly construed against the insurer in order that the purpose of providing indemnity not be defeated.” Syllabus point 5, National Mutual Insurance Co. v. McMahon and Sons, Inc., 177 W.Va. 734, 356 S.E.2d 488 (1987), overruled on other grounds by Potesta v. United States Fidelity and Guaranty Co., 202 W.Va. 308, 504 S.E.2d 135 (1998).

12. “The term ‘business pursuits,’ when used in a clause of an insurance policy excluding from personal liability coverage injuries ‘arising out of business pursuits of any insured,’ contemplates a continuous or regular activity engaged in by the insured for the purpose of earning a profit or a livelihood.” Syllabus point 1, Camden Fire Insurance Association v. Johnson, 170 W.Va. 313, 294 S.E.2d 116 (1982).

Marvin W. Masters, Kelly Elswick–Hall, The Masters Law Firm LC, Charleston, WV, Richard E. Ford, Jr., The Ford Law Firm, Lewisburg, WV, Attorneys for the Petitioner, Lisbeth L. Cherrington.

Michelle E. Piziak, Steptoe & Johnson PLLC, Charleston, WV, Attorney for the Respondent, Erie Insurance Property and Casualty Company.

James R. Sheatsley, Gorman, Sheatsley & Company, L.C., Beckley, WV, Attorney for the Petitioners, The Pinnacle Group, Inc., and Anthony Mamone, Jr.

DAVIS, Justice:

The petitioners herein, Lisbeth L. Cherrington (hereinafter “Ms. Cherrington”); ¹ The Pinnacle Group, Inc. (hereinafter “Pinnacle”); and Anthony Mamone, Jr. (hereinafter “Mr. Mamone”),² appeal from an order entered December 6, 2011, by the Circuit Court of Greenbrier County. By that order, the circuit court awarded summary judgment to the respondent herein, Erie Insurance Property and Casualty Company (hereinafter “Erie”),³ finding that the three policies of insurance issued by Erie to Pinnacle (commercial general liability policy (hereinafter “CGL”)) and Mr. Mamone (homeowners policy and personal catastrophe (hereinafter “umbrella”) policy) did not provide coverage for the injuries and property damage allegedly sustained by Ms. Cherrington. Before this Court, the Petitioners ⁴ contend that the subject policies of insurance provide coverage in this case and that none of the policies' exclusions operate to preclude coverage. Upon a review of the parties' arguments, the appendix record, and the pertinent authorities, we affirm the decision of the Greenbrier County Circuit Court finding that neither Mr. Mamone's homeowners policy nor his umbrella policy provides coverage under the facts of this case. However, we reverse the circuit court's ruling finding no coverage to exist under Pinnacle's CGL policy and remand this case for further proceedings consistent with this opinion.

I.FACTUAL AND PROCEDURAL HISTORY

The case sub judice originated in July 2004 when Ms. Cherrington entered into a “cost plus” contract with Pinnacle for the construction of a home in Greenbrier County, West Virginia. In addition to the completion of the home, the contract also included landscaping and interior furnishings. Mr. Mamone, who allegedly was working on his own behalf ⁵ and also as an agent of Pinnacle, worked with Ms. Cherrington during the contract and construction processes.

During the construction of the home, disputes arose between Ms. Cherrington and Pinnacle when Ms. Cherrington believed that the contract price included all of the landscaping charges but she was asked to provide additional funds therefor. Additionally, Ms. Cherrington felt that she had been overcharged for the interior furnishings provided under the contract.⁶ After the home was completed, Ms. Cherrington observed various defects in the house, including an uneven concrete floor on the ground level of the house; water infiltration through the roof and chimney joint; a sagging support beam; and numerous cracks in the drywall walls and partitions throughout the house.⁷

In 2006, Ms. Cherrington filed the instant lawsuit against Pinnacle and Old White Interiors, LLC, and, in 2007, Ms. Cherrington amended the complaint to add Mr. Mamone as a defendant. Both the original and first amended complaints contain substantially the same allegations that “Pinnacle was negligent in the construction of said home in the following matters: (a) Altering the design; (b) Negligently pouring and finishing the concrete floor; (c) Finishing and painting of the house; and (d) Placing and securing the foundation.” Ms. Cherrington also averred that Pinnacle had breached its fiduciary duty to her by not securing materials and furnishings for the project within the contemplated contract price. She further claimed that she had sustained damages as a result of Pinnacle's “misrepresentations ... [and] negligent acts ... in that her home's fair market value has been and is substantially diminished; plaintiff paid excess moneys to Pinnacle above the amount actually owed; and plaintiff has been subjected to emotional distress and has otherwise been damaged.” Ms. Cherrington also claimed that she had been “wrongfully and falsely overcharged for furnishings” and that “[t]he defendants' conduct was intentional and willful misconduct” that entitles her to punitive damages.

During the period of the home's contract negotiation and construction, both Pinnacle and Mr. Mamone had in effect policies of insurance from Erie. Pinnacle had a policy of commercial general liability (“CGL”) insurance, that was effective from January 1, 2004, through January 1, 2005. Mr. Mamone had a policy of homeowners insurance with Erie, effective from January 14, 2004, through January 14, 2005, and a personal catastrophe (“umbrella”) policy of insurance that was effective from April 19, 2004, through April 19, 2005. Following the filing of Ms. Cherrington's lawsuit,...