Georgia Farm Bureau Mutual Insurance Company v. Washington
Court of Appeals of Georgia, Case No. 55073, submitted January 11, 1978, decided March 9, 1978 (McMurray, Judge, for the Court; Quillian, P. J., and Webb, J., concurring). Counsel of record were Bridges & Connell, Alan W. Connell, for the appellant insurer, and Carlisle & Newton, John R. Carlisle, for the appellee policyholder. The complete opinion appears below, transcribed from the official reporter via the Caselaw Access Project (case.law), Harvard Law School’s open archive of published U.S. case law. What was removed: the reporter’s head matter — the docket number, the repeated case caption, and the submitted/decided dates and counsel-of-record block, which the scan dropped into the middle of the opinion text and which are summarized in this line instead. Every repair made to the remaining text, in full: “[sjudden” restored to “[s]udden”; “thepolicy.Defendant” separated into “the policy. Defendant”; three dropped possessive apostrophes restored (“Plaintiffs motion” to “Plaintiff’s motion”, “plaintiff s store” to “plaintiff’s store”, “plaintiffs property” to “plaintiff’s property”); and the scan’s mixed curly and straight quotation marks normalized to straight quotes. No word of the Court’s has been changed, condensed, reordered, or paraphrased. Note on the citation: the Caselaw Access Project record for this case carries only the official Georgia citation, 145 Ga. App. 216; the parallel South Eastern Reporter cite shown above, 243 S.E.2d 639, comes from standard reporter tables and we were not able to confirm it against an open primary source.
The full opinion
McMurray, Judge.
A retail women’s apparel shop located in a neighborhood shopping center in Griffin, Georgia sustained smoke damage as a result of the improperly vented bakery oven of a nearby bakery located in the same shopping center. The owner of the dress shop filed a claim for smoke damage which was denied by the insurer.
Renee Washington, d/b/a Renee’s, sued the defendant, Georgia Farm Bureau Mutual Insurance Company, for the amount of her loss, including damages and attorney fees pursuant to Code Ann. § 56-1206 (Ga. L. 1960, pp. 289, 502; 1962, p. 712). Defendant answered, denying the complaint, although admitting jurisdiction and the existence of the policy. After discovery both parties moved for summary judgment, and the trial court in its final order stated that the case was based on undisputed facts that the damage was caused to plaintiff by smoke from a faulty vent in an oven of an adjacent bakery establishment which bakes and retails its baked goods on the premises and that the sole issue for determination is whether or not the baking establishment is an “industrial operation” in the meaning of the exclusion in defendant’s policy. The policy insured damage caused by “[s]udden and accidental damage from smoke, other than smoke from agricultural smudging or industrial operation.” The court held that exceptions and exclusions must be taken more strongly against the insurer, citing Ga. Farm Bureau Mut. Ins. Co. v. Coleman, 121 Ga. App. 510 (174 SE2d 351). It was further held that the test was not what the insurer intended its words to mean, but what a reasonable person in the position of the insured would understand them to mean, that is, a layman’s reading it and not as it might be analyzed by an insurance expert or an attorney, citing Nationwide Mut. Fire Ins. Co. v. Collins, 136 Ga. App. 671, 675 (222 SE2d 828), and, that if the terms are clear and unambiguous the same are to be taken and understood in their plain, ordinary and popular sense.
Defendant’s motion for summary judgment was denied. Plaintiff’s motion for summary judgment was granted, that is, the term “industrial operation” as used in the insurance policy in question was held not to include a small neighborhood type bakery shop, and the term smoke damage under the perils insured against shall include the smoke damage from the improperly vented bakery oven when smoke found its way into the plaintiff’s store and permeated her inventory, and the court construed coverage by the policy. Defendant appeals. Held:
Under the undisputed issue of facts before the court there was smoke damage to plaintiff’s property which was covered by the policy, albeit sudden and accidental damage from smoke from industrial operations is not covered. The trial court did not err in construing the term industrial operations not to include a small neighborhood bakery under the reasonable meaning of the term “industry” as found in Webster’s New International Dictionary (2d Ed.). See Southern Guaranty Ins. Co. v. Duncan, 131 Ga. App. 761, 764 (2) (206 SE2d 672); Nationwide Mut. Fire Ins. Co. v. Collins, 136 Ga. App. 671, 677, supra; State Farm Fire &c. Co. v. Rowland, 111 Ga. App. 743 (143 SE2d 193).
Judgment affirmed. Quillian, P. J., and Webb, J., concur.
What it decided
Renee Washington ran a women’s apparel shop in a Griffin, Georgia shopping center. A bakery in the same center had a badly vented oven, and its smoke got into her store and permeated her inventory. Georgia Farm Bureau denied the claim.
The policy did not have a general smoke exclusion. It affirmatively insured “[s]udden and accidental damage from smoke,” and then carved two sources back out: “smoke from agricultural smudging or industrial operation.” So the whole case reduced to one question, which the trial court called “the sole issue for determination” — is a neighborhood bakery an “industrial operation”?
Both sides moved for summary judgment on undisputed facts. The trial court granted the policyholder’s motion, denied the insurer’s, and applied three rules of construction:
- Exceptions and exclusions “must be taken more strongly against the insurer” (citing Georgia Farm Bureau Mut. Ins. Co. v. Coleman).
- The measure is how a layman reads it. “[T]he test was not what the insurer intended its words to mean, but what a reasonable person in the position of the insured would understand them to mean, that is, a layman’s reading it and not as it might be analyzed by an insurance expert or an attorney” (citing Nationwide Mut. Fire Ins. Co. v. Collins).
- Clear terms get their plain sense — “their plain, ordinary and popular sense.”
The Court of Appeals affirmed in a single paragraph. It held the trial court “did not err in construing the term industrial operations not to include a small neighborhood bakery under the reasonable meaning of the term ‘industry’ as found in Webster’s New International Dictionary (2d Ed.).” A dictionary a layman could pull off a shelf decided what the carrier’s word meant.
What it did NOT decide
This is a four-paragraph opinion from 1978. It carries exactly as much weight as its own words, and no more.
- It did not hold that smoke damage is always covered. The court said the opposite in the same breath: “albeit sudden and accidental damage from smoke from industrial operations is not covered.” Change the neighbor from a bakery to a factory and this case cuts the other way.
- It did not analyze “sudden and accidental.” Those words appear in the quoted policy language, and nowhere in the court’s reasoning. Nobody argued the smoke was gradual rather than sudden, so the opinion has nothing to say about the gradual-versus-sudden fight that decides a lot of modern smoke, soot and odor claims. If you have seen this case cited for a “sudden and accidental” holding, it does not contain one.
- It did not decide the amount of the loss. The judgment under review construed coverage. What Ms. Washington’s damaged inventory was worth was not before the court.
- It did not decide the bad-faith penalty or attorney’s fees. The complaint asked for them under the Code section then in force. The opinion never returns to that request. Georgia’s first-party bad-faith penalty today is O.C.G.A. § 33-4-6, and it has its own 60-day demand mechanics that this case does not address.
- It is a commercial property case, not a homeowner’s case. The insured was a retail dress shop. The rules of construction it applies are general Georgia contract-of-insurance rules and are not limited to commercial policies, but the policy form here was not an HO-3, and the smoke language quoted is not the language in a modern homeowner’s form. Your own policy is the only document that tells you what your smoke coverage says.
- It did not survey what “industrial” means generally. The holding is that a small neighborhood bakery is not an industrial operation. Where the line falls between that bakery and a genuine industrial plant is left where the court left it.
Why it matters to policyholders
Smoke, soot and odor claims turn on two questions carriers rarely ask in that order: what does the policy actually say about smoke, and who or what made the smoke. Washington is a clean, short answer to the second question and a useful reminder about the first.
Read the smoke wording before you accept a denial. In this policy, smoke was an insured peril with two named sources carved out. A denial letter that says “smoke is excluded” is not a quotation of that clause — it is a summary of it, and the summary was wrong here. Georgia’s claim-handling regulation is on your side on this point: a denial must reference the specific policy provision, condition or exclusion the insurer is relying on. Ask for the provision, in writing, and read it against the facts.
The carrier’s word gets a layman’s meaning. That is the rule Washington applies, and it is the same rule Georgia courts still apply. In Nationwide v. Kim (2008), the Court of Appeals put the two halves together: “an insurer seeking to invoke a policy exclusion carries the burden of proving its applicability,” and “any exclusion from coverage sought to be invoked by the insurer is to be strictly construed.” In American Strategic v. Helm (2014), the court read genuinely ambiguous exclusionary language against the company that drafted it. Washington is the 1978 version of the same instinct: the words mean what an ordinary person reading them would think they mean.
Document the source of the smoke like it decides the claim, because it can. In this case the difference between a covered loss and a denied one was whether the smoke came from a bakery oven or an “industrial operation.” That is a factual question, and it is settled with evidence — photographs, the vent, the neighboring tenant’s operation, dated observations, an air-quality or industrial-hygiene report where one is warranted, and a written statement of what the source was and when it started. A public adjuster’s job on a smoke claim is exactly this: establish the source, establish the extent of the contamination room by room and item by item, price the cleaning or replacement, and put it in front of the carrier in a form that has to be answered. Filing suit, and any bad-faith litigation, is attorney work — we document, negotiate, invoke appraisal where the fight is about the amount, and refer the legal side out.
Mind the age of this case. It was decided in 1978 under Georgia’s old Code Annotated numbering, and it construes a policy form written before most current homeowner’s and business-owner’s forms existed. It is good authority for how Georgia courts read carrier language. It is not authority that your policy contains the same words. Start with your policy, then come back to the rule. More Georgia authority on the shelf is at our Georgia hub.
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