Asserting that a lightning storm damaged 103 of the 320 lights, Goldeneagle filed a claim with Covington Specialty Insurance Company, from which Goldeagle had acquired a commercial property insurance policy.

Covington denied the claim on the grounds that the damaged lights were a part of the building rather than business personal property of Goldeagle and that the lights had not been installed by Goldeagle as a betterment or improvement. Covington indicated that there was no coverage for the building and directed Goldeagle to Section A.1.(b) of its insurance policy.

Goldeagle then sued Covington for breach of contract and bad faith.

Covington moved for summary judgment, arguing that the policy precluded coverage and that it had not denied Goldeagle's claim in bad faith.

The trial court granted Covington's motion, and Goldeagle appealed.

The Covington Policy

The Covington insurance policy provided $125,000 in coverage for “Business Personal Property,” as indicated in the “Commercial Property Coverage Part Declarations,” stating:

1. Coverage

We will pay for direct physical loss of or damage to Covered Property at the premises described in the Declarations caused by or resulting from any Covered Cause of Loss.

1. Covered Property

Covered Property . . . means the type of property described in this section, A.1. and limited in A.2., Property Not Covered, if a Limit of Insurance is shown in the Declarations for that type of property.

1. Building, meaning the building or structure described in the Declarations, including: (1) Completed additions; (2) Fixtures, including outdoor fixtures; (3) Permanently installed: (a) Machinery and (b) Equipment; (4) Personal property owned by you that is used to maintain or service the building or structure or its premises. . . .
2. Your Business Personal Property located in or on the building as described in the Declarations . . . consisting of the following unless otherwise specified in the Declarations or on the Your Business Personal Property — Separation of Coverage form: (1) Furniture and fixtures; (2) Machinery and equipment; (3) “Stock”; (4) All other personal property owned by you and used in your business; (5) Labor, materials or services furnished or arranged by you on personal property of others; (6) Your use interest as tenant in improvements and betterments. Improvements and betterments are fixtures, alterations, installations or additions: (a) Made a part of the building or structure you occupy but do not own; and (b) You acquired or made at your expense but cannot legally remove; (7) Leased personal property for which you have a contractual responsibility to insure, unless otherwise provided for under Personal Property of Others.
3. Personal Property of Others that is: (1) In your care, custody or control; and (2) Located in or on the building described in the Declarations. . . . However, our payment for loss of or damage to personal property of others will only be for the account of the owner of the property.

The appellate court affirmed.

In its decision, the appellate court first found that the policy was not ambiguous. It then explained that the only coverage provided under the policy was for Goldeagle's “Business Personal Property,” rejecting Goldeagle's argument that the lights were insured under the policy's “Building” coverage as “contrary to the terms of the contract.”

The appellate court reasoned that, under the section entitled “Coverages Provided” on the Declarations Page, only “Business Personal Property” was listed. Moreover, the appellate court continued, the Declarations Page stated, “Insurance at the described premises applies only for coverage for which a limit of insurance is shown” – and, on its face, the policy showed that “the only limit of insurance shown in the Declarations Page was for Business Personal Property.”

The appellate court then pointed out that the “Building and Personal Property Coverage Form” defined “Covered Property” as “the type of property described in this section . . . if a Limit of Insurance is shown in the Declarations for that type of property.” (Emphasis added.) “Covered Property,” the appellate court continued, included three categories: “Building,” “Your Business Personal Property,” and “Personal Property of Others.” The appellate court ruled that the policy did “not show that Goldeagle purchased or paid a premium for building coverage or for coverage for the personal property of others.”

Accordingly, it ruled, to determine the items the policy intended to cover, it had to look to items that were covered as “Your Business Personal Property.”

For the lights to be covered under the policy, the appellate court explained, they had to be “fixtures . . . (a) Made a part of the building or structure . . . and (b) You acquired or made at your expense.” It then ruled that Goldeagle had not established coverage for the lighting under that policy provision, reasoning that the “removable lights were not made part of the building” and did “not fit within a common definition of fixtures.”

Even if the lights were fixtures made part of the building, they were not “Your Business Personal Property” because they were not “acquired or made at [Goldeagle's] expense,” the appellate court pointed out, and Section A.1.b(6) coverage required fixtures to be both made part of the building and acquired or made at the insured's expense.

Finally, the appellate court concluded that the lights also were not covered as “leased personal property for which [Goldeagle had] a contractual responsibility to insure” because Goldeagle failed to establish that it had a responsibility to insure the lights.

The case is Goldeagle Ventures, LLC v. Covington Specialty Ins. Co., No. A18A1789 (Ga. Ct. App. March 13, 2019).