Does CGL cover on-the-job injury? - The Rough Notes Company Inc.
Does CGL cover on-the-job injury?
Howard Tyson was employed part time by Hank Rowe d/b/a Shellmar Tree Service. Shellmar had a commercial general liability policy with Scottsdale Indemnity Company. On September 11, 2014, Rowe and Tyson, along with other workers, traveled to Sea Island in Shellmar trucks to remove several trees and tree debris from the yard of a house under construction. Tyson's job was to help remove limbs and debris after the trees were taken down. As Rowe and the others were taking down the last tree, Tyson was standing off to the side, a safe distance away from the tree, as was a requirement of his job. However, he was still in the yard. Although no one saw what happened, Tyson was struck in the neck by a large pine limb. As a result of the accident, Tyson became a quadriplegic.
Tyson and his partner filed a claim against Scottsdale, which was denied. They then filed suit against Rowe, setting forth claims for negligence, strict liability, breach of contract, and loss of consortium. Rowe answered and asserted a third-party complaint against Scottsdale on the ground that Scottsdale improperly denied coverage.
The court granted summary judgment to Scottsdale, finding that Shellmar's policy excluded coverage for Tyson because he was working for Rowe at the time of the accident. Tyson and Rowe appealed, contending that the trial court erred in granting summary judgment because (1) the policy did not exclude Tyson; (2) there were genuine issues of material fact regarding whether Rowe had knowledge of the exclusions and whether Scottsdale made representations to Rowe that the policy covered "anyone," such that the policy should have been reformed; and (3) the policy did not comply with provisions of Georgia's Surplus Line Insurance Law.
The policy provided up to $1 million in bodily injury coverage. However, the policy excluded coverage for bodily injury to "an employee, leased worker, temporary worker, or volunteer worker of any insured" or "[a]ny contractor, subcontractor, sub-subcontractor or anyone hired or retained by or for any insured" if the injury "arises out of and in the course of their employment or retention[.]" An "employee" was defined to include a "leased worker" (a worker leased by a labor leasing firm) but not a "temporary worker" ("a person who is furnished to you to substitute for a permanent 'employee' on leave or to meet seasonal or short-term workload conditions").
With respect to the first issue on appeal, the court noted that the undisputed evidence showed that Tyson was in the yard, waiting a "safe" distance away, as he was required to do, when the branch fell during tree cutting and struck him. Thus there was a causal connection between the conditions under which work was required to be performed and the resulting injuries, such that his injuries arose out of his employment or retention with Shellmar. Further, he was injured in the yard where he and the others were working, during working hours, while waiting to complete his cleanup duties. Thus his injuries also arose in the course of his employment or retention.
Setting aside the question of whether or not Tyson was a Shellmar "employee" as defined by the policy, the court said, the undisputed evidence showed that he was "hired or retained" by Shellmar to clean up tree debris on the day of the accident. Indeed, Tyson testified that he was being paid to work at the time the tree fell.
In their second point on appeal, Tyson and Rowe asserted that there was a genuine issue of material fact as to whether Rowe had knowledge of the policy exclusions and whether he relied on representations from his retail agent that "anyone" was covered by the policy, including his employees, such that the policy should have been reformed. Again the court disagreed.
Tyson and Rowe asserted that it was not clear from the evidence whether the exclusions were given to Rowe. But even assuming Rowe never received a copy of the policy, the court said, according to case law he was bound by the exclusion. Moreover, the court said, undisputed evidence showed that Scottsdale's agent delivered a copy of the policy, including the applicable injury-to-worker exclusion, to Shellmar's retail agent, Robert Langston.
Tyson and Rowe next asserted that Langston was a "dual agent" of Scottsdale such that Rowe was entitled to rely on Langston's assertions that the policy covered "anyone," particularly in light of the fact that he never saw a full copy of the policy. Indeed, Rowe testified that Langston told him that the policy covered bodily harm to "anyone," including his employees. The court noted that there was no evidence that Scottsdale held out Langston as its agent, such that Rowe could justifiably rely on his representations.
Finally, Tyson and Rowe contended that the trial court erred in granting summary judgment to Scottsdale because the policy was not in conformance with the Georgia Surplus Line Insurance Law and therefore was not enforceable.
Contrary to this argument, the court said that the record showed that the policy issued to Shellmar bore the requisite surplus line certification and the name of the broker who procured it. The policy also included the standard disclosure form.
The trial court's summary judgment in favor of Scottsdale was affirmed.
Tyson et al. vs. Scottsdale Indemnity Company-Court of Appeals of Georgia-September 27, 2017-No. A17A1824.