Higgins v. American States Ins ( 1997 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CHARLES L. HIGGINS, as Assignee of
Robert W. Mitchell,
Plaintiff-Appellant,
v. No. 96-1489
AMERICAN STATES INSURANCE
COMPANY,
Defendant-Appellee.
CHARLES L. HIGGINS, as Assignee of
Robert W. Mitchell,
Plaintiff-Appellee,
v. No. 96-1654
AMERICAN STATES INSURANCE
COMPANY,
Defendant-Appellant.
Appeals from the United States District Court
for the District of South Carolina, at Columbia.
Patrick Michael Duffy, District Judge.
(CA-94-3498-3-23)
Argued: April 9, 1997
Decided: May 6, 1997
Before HAMILTON and MOTZ, Circuit Judges, and
PHILLIPS, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
COUNSEL
ARGUED: Rolf Mouin Baghdady, Columbia, South Carolina, for
Appellant. Andrew Frederick Lindemann, ELLIS, LAWHORNE,
DAVIDSON & SIMS, P.A., Columbia, South Carolina, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
In this dispute involving insurance coverage, the plaintiff, Charles
Higgins, appeals the district court's grant of summary judgment in
favor of the defendant, American States Insurance Company (Ameri-
can States), the liability insurance carrier for Robert W. Mitchell,
d/b/a Marine Construction (Mitchell). The district court granted
American States' motion for summary judgment on the basis that the
physical injury to Higgins' boat slips manifested itself outside the
coverage period for the American States policy issued to Mitchell and
American States was not estopped from denying coverage. We agree
with the district court and affirm.
I.
American States issued general liability insurance coverage to
Mitchell for a policy period--August 6, 1984, through August 6,
1986. In April 1985, Higgins, the owner and operator of Holland's
Landing marina located on Lake Murray in South Carolina, con-
tracted with Mitchell to construct boat slips for Higgins' dock. The
construction was completed during the period Mitchell was covered
by the American States policy.
During the time Mitchell was building the slips for Higgins, Mitch-
ell contacted American States agent John Brownlee to verify cover-
2
age. Brownlee told Mitchell that the American States policy would
protect Mitchell against any products liability and/or negligent con-
struction claims. Accordingly, Mitchell did not obtain any additional
insurance coverage.
On January 7, 1988, snow and ice, which had built up on the roofs
of the twenty-four boat slips constructed by Mitchell, caused the boat
slip roofs to collapse. As a result of the collapse, Higgins lost $40,800
in rental revenue due to his inability to rent the damaged boat slips,
incurred a cost of $12,670 to repair the boats docked in the damaged
slips, and had to expend $55,003 in order to construct replacement
slips. Accordingly, Higgins brought a negligence action in the Court
of Common Pleas for Newberry County against Mitchell. The state
court awarded Higgins $108,473 in compensatory damages and an
additional $191,526 because Mitchell's conduct was grossly negligent
and reckless. American States refused to pay the judgment against
Mitchell or even participate in the state court litigation because,
according to American States, the boat slip roofs collapsed after the
liability insurance policy expired.
Mitchell assigned all his claims against American States to Higgins
and Higgins then filed suit against American States in the Court of
Common Pleas for Newberry County on December 2, 1994. Ameri-
can States removed the action to the United States District Court for
the District of South Carolina. On March 29, 1996, the district court
granted summary judgment to American States on the ground that the
injury to Higgins' boat slips did not manifest itself until after Mitch-
ell's insurance policy expired. The district court also found that
American States was not estopped from denying coverage as a result
of Brownlee's statement to Mitchell that the American States policy
would protect Mitchell against any products liability and/or negligent
construction claims. Higgins appeals the district court's grant of sum-
mary judgment.*
_________________________________________________________________
*American States cross-appealed, asserting alternative grounds for
upholding the district court's grant of summary judgment against Hig-
gins. Because we find the reasoning of the district court persuasive and
dispositive of the appeal, we need not address the merits of American
States' cross-appeal.
3
II.
We review the district court's grant of summary judgment de novo.
See Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43
F.3d 922, 928 (4th Cir. 1995). Summary judgment is appropriate
when the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there
is no genuine issue as to any material fact and that the moving party
is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).
Mitchell's insurance policy with American States covered, among
other things, property damage. The term "property damage" is defined
as:
(1) physical injury to . . . tangible property which occurs
during the policy period . . . or
(2) loss of use of tangible property . . . provided such loss
of use is caused by an occurrence during the policy period.
(J.A. 132) (emphasis added). In this case, the roofs of the boat slips
collapsed on January 7, 1988, whereas Mitchell's coverage under the
American States policy terminated on August 6, 1986.
The district court granted summary judgment to American States
based on the theory that only property damage occurring during the
policy period was covered by the American States policy. In reaching
its conclusion, the district court noted that South Carolina has adopted
the "manifestation rule" unless the insurance policy clearly dictates
otherwise. See Spinx Oil Co., Inc. v. Federated Mut. Ins. Co., 427
S.E.2d 649, 651 (S.C. 1993); Mraz v. Canadian Universal Ins. Co.,
Ltd., 804 F.2d 1325 (4th Cir. 1986). Under the manifestation rule,
"`the time of the occurrence of an accident within the meaning of
[the] . . . policy is not the time the wrongful act was committed but
the time when the complaining party was actually damaged.'" See id.
at 1328 (quoting United States Fidelity & Guar. Co. v. American Ins.
Co., 345 N.E.2d 267, 270 (Ind. Ct. App. 1976)). We agree with the
district court that, under the manifestation rule, Mitchell was no lon-
ger covered by the American States policy when Higgins' boat slip
4
roofs collapsed because the property damage occurred outside the
policy period.
Higgins also claims that American States should be estopped from
denying coverage under Mitchell's liability insurance policy because
of the statement made by Brownlee to Mitchell regarding coverage of
the American States policy. The district court concluded that Mitch-
ell's belief that he was covered by American States' policy did not
provide a sufficient basis for an equitable estoppel claim by Higgins.
Pursuant to South Carolina law, the elements of estoppel are: (1)
ignorance of the truth of the matter in question by the party invoking
estoppel; (2) a representation by the party estopped of that party's
position on the matter; (3) reasonable reliance by the relying party on
the estopped party's representation; and (4) a prejudicial change of
position. See Provident Life & Accident Ins. Co. v. Driver, 451 S.E.2d
924, 928 (S.C. Ct. App. 1994). Brownlee's statement to Mitchell is
of no help to Higgins. Based on the language in the insurance policy
--specifically, the definition of "property damage"--it was not rea-
sonable for Mitchell to rely on Brownlee's statement regarding cover-
age for the conclusion that Mitchell was covered for occurrences
taking place beyond the policy period. With that in mind, the district
court appropriately rejected Higgins' equitable estoppel claim.
III.
For the reasons set forth above, we affirm the district court's grant
of summary judgment to American States.
AFFIRMED
5