York Insurance Company v. Williams Seafood of Albany, Inc.

Supreme Court of Georgia, Case No. S00Q2003, decided March 19, 2001, reconsideration denied April 12, 2001 (Fletcher, Presiding Justice, for a unanimous Court). The case reached the Court as a certified question from the United States Court of Appeals for the Eleventh Circuit. Our text comes from the Caselaw Access Project (case.law), Harvard Law School’s open archive of published U.S. case law, which reproduces the official reporter at 273 Ga. 710. What we removed: the archive’s own metadata block (case name, citations, court, decision date, docket number, archive ID) and its section separators; the reporter’s head-matter caption block printed above the opinion (docket number, party caption, and the parallel citation “(544 SE2d 156)”); and the block of reporter head matter the scan dropped into the middle of the text just before the disposition — the decision and reconsideration dates, the note that the case came on a certified question from the Eleventh Circuit, and counsel of record (Drew, Eckl & Farnham, Peter H. Schmidt II, and Elizabeth B. Clarke for appellant; Robert B. Langstaff and Robert B. Langstaff, Jr., for appellees). All of that information is summarized in this line instead. Scan repairs, in full: one character, “Section B.l.b.” corrected to “Section B.1.b.” (a lowercase L scanned for the numeral 1). That is the only repair made to the Court’s text — no words were rejoined, no spelling was altered, nothing was condensed. Formatting only: the judge’s name line is bolded, the policy language the Court block-quotes is set as an indented quote, and the four case citations the archive prints as a closing block — the opinion’s footnote references — are reproduced verbatim under a “Footnotes” heading in the order printed.

The full opinion

Fletcher, Presiding Justice.

Williams Seafood of Albany suffered a complete loss when its restaurant building collapsed into a sinkhole following a flood. Williams’ insurer, York Insurance Company, brought a declaratory judgment action in federal district court to determine coverage. The trial court held that the loss was not covered. On appeal, the Eleventh Circuit Court of Appeals certified to this Court the question of whether the policy covers damage caused by a sinkhole collapse that was precipitated by a flood. Because the policy, when read as a whole, does not extend its flood exclusion to the sinkhole coverage, we answer the question in the affirmative and hold that the policy covers damage produced by a sinkhole collapse that was precipitated by a flood.

The parties agree that the loss in this case was due to a sinkhole collapse precipitated by a flood. The insurance policy provides coverage for sinkhole collapse, but also excludes coverage for damage caused directly or indirectly by flood. The relevant provisions provide:

BUILDING AND PERSONAL PROPERTY COVERAGE FORM

A. 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.

Covered Causes of Loss

See applicable Causes of Loss Form as shown in the Declarations.

B. EXCLUSIONS

See applicable Causes of Loss Form as shown in the Declarations.

CAUSES OF LOSS - SPECIAL FORM

A. COVERED CAUSES OF LOSS

When Special is shown in the Declarations, Covered Causes of loss means RISKS OF DIRECT PHYSICAL LOSS unless the loss is:

Excluded in Section B., Exclusions; or

Limited in Section C., Limitations; that follow.

B. EXCLUSIONS

We will not pay for loss or damage caused directly or indirectly by any of the following. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.

g. Water

(1) Flood, surface water… .

D. ADDITIONAL COVERAGE - COLLAPSE

We will pay for loss or damage caused by or resulting from risks of direct physical loss involving collapse of a building or any part of a building caused only by one or more of the following:

The “specified causes of loss” or breakage of building glass, all only as insured against in this Coverage Part… .

F. DEFINITIONS

“Specified Causes of Loss” means the following: … sinkhole collapse… .

Sinkhole collapse means the sudden sinking or collapse of land into underground water on limestone or dolomite.

The relevant rules of contract construction guide the analysis of these contract provisions. In construing an insurance contract, a court must consider it as a whole, give effect to each provision, and interpret each provision to harmonize with each other. The policy should be read as a layman would read it. Additionally, exclusions will be strictly construed against the insurer and in favor of coverage.

The Building and Personal Property Coverage Form and Causes of Loss Form provide that all risks are covered unless specifically excluded or limited in sections B and C. After defining the scope of coverage only by reference to sections B and C, the policy extends “Additional Coverage” in section D at the end of the policy. This additional coverage in section D contains its own exclusions and does not reference the exclusions in the earlier sections of the policy. Thus, reading the policy as a whole, it is clear that the coverage in section D is not subject to the exclusions in section B. Therefore, the sinkhole coverage is not limited by the exclusion for damage by flood.

Any other reading would render the Additional Coverages found in section D to be superfluous because sinkhole collapse is already covered under section A. Section A of the cause of loss form provides “covered causes of loss means risks of direct physical loss unless the loss” is excluded in section B or limited in section C. A layman reading this policy would understand that damage from any cause, including sinkholes, would be covered unless an exclusion or limitation from section B or C applies. Section B.1.b. makes this analysis explicit by carving out an exception for sinkhole collapse from its exclusion for “earth movement.” Thus, Williams had sinkhole coverage even in the absence of section D. That sinkhole coverage, however, was subject to the exclusion for any damage caused by flood. If the flood exclusion also applied to section D, the additional coverage in section D would be meaningless.

Question answered in the affirmative.

All the Justices concur.

Footnotes

York Ins. Co. v. Williams Seafood of Albany, Inc., 223 F.3d 1253 (11th Cir. 2000).

Boardman Petroleum, Inc. v. Federated Mut. Ins. Co., 269 Ga. 326, 328 (498 SE2d 492) (1998).

Nationwide Mut. Fire Ins. Co. v. Collins, 136 Ga. App. 671 (222 SE2d 828) (1975).

Richards v. Hanover Ins. Co., 250 Ga. 613, 615 (299 SE2d 561) (1983).

What it decided

A restaurant building in Albany collapsed into a sinkhole after a flood. Everyone agreed on the mechanism: flood first, sinkhole collapse second, building gone. York Insurance filed a declaratory judgment action in federal court and won. On appeal the Eleventh Circuit stopped and asked Georgia’s highest court a single question — does this policy cover damage from a sinkhole collapse that a flood set off?

The Supreme Court of Georgia answered yes, and the reason is structural rather than atmospheric.

The policy was a standard commercial special form. Its Causes of Loss Form covered “RISKS OF DIRECT PHYSICAL LOSS” unless excluded in Section B or limited in Section C. Section B carried the sentence that appears in millions of property policies and that carriers rely on constantly — an exclusion applies “regardless of any other cause or event that contributes concurrently or in any sequence to the loss” — and flood sat inside it. But the policy also contained, at the back, a separate grant labeled “ADDITIONAL COVERAGE - COLLAPSE,” triggered by the “specified causes of loss,” a defined term that includes sinkhole collapse.

The Court read the document the way a reader would: the Additional Coverage in Section D “contains its own exclusions and does not reference the exclusions in the earlier sections of the policy.” Section B’s exclusions define what Section A covers. They do not reach across the policy into a later, separately worded grant that carries its own conditions. So the flood exclusion — anti-concurrent sentence and all — did not limit the sinkhole-collapse coverage.

The Court then supplied the check on its own reasoning. Section B.1.b. already carved sinkhole collapse out of the earth-movement exclusion, “[t]hus, Williams had sinkhole coverage even in the absence of section D.” If Section B’s exclusions also governed Section D, Section D would add nothing at all, and Georgia law requires a court to “give effect to each provision.” The only reading that leaves the Additional Coverage with work to do is the one the Court adopted.

Three construction rules carried the analysis, and they are quotable on their own: a court “must consider it as a whole, give effect to each provision, and interpret each provision to harmonize with each other”; “[t]he policy should be read as a layman would read it”; and “exclusions will be strictly construed against the insurer and in favor of coverage.”

What it did NOT decide

York is frequently described as Georgia’s answer to anti-concurrent-causation clauses. Read the opinion and that description does not survive. Here is what the Court did not hold.

It did not hold that anti-concurrent-causation language is unenforceable in Georgia. The Court never questioned the clause. It applied it. In the same paragraph that decides the case, the Court says the insured “had sinkhole coverage even in the absence of section D,” and that “[t]hat sinkhole coverage, however, was subject to the exclusion for any damage caused by flood.” Inside Section A’s world, the flood exclusion with its concurrent-causation sentence did exactly what it was written to do. The policyholder won because a second, independent grant existed — not because the clause failed.
It did not announce a rule about storms, wind, or rain. The certified question was about a sinkhole collapse precipitated by a flood, under one policy’s language. There is no holding here about wind-versus-water allocation, hurricane deductibles, or a roof leak that follows a storm. A carrier’s brief that treats York as a general causation case is overreading it, and so is a policyholder’s.
It did not decide the case. This was a certified question under the Eleventh Circuit’s procedure. The Georgia Supreme Court answered a question of Georgia law and sent it back. It made no findings about the amount of the loss, the proof submitted, or how York handled the claim.
It said nothing about the insurer’s conduct. No bad-faith claim, no penalty, no attorney’s fees are discussed anywhere in the opinion. Georgia’s penalty statute, O.C.G.A. § 33-4-6, plays no part in it.
It did not address a policy drafted the other way. Insurers can and do write additional-coverage grants that expressly incorporate the general exclusions. The Court’s reasoning turned on the fact that this Section D “does not reference the exclusions in the earlier sections.” Where a policy does reference them, York’s structural argument is not available.
It did not define “sinkhole collapse” beyond the policy’s own words — “the sudden sinking or collapse of land into underground water on limestone or dolomite.” Whether a given ground failure fits that definition is a factual question the opinion never reaches.

Why it matters to policyholders

The exclusion in the denial letter is only half of the policy. The habit York rewards is boring and unglamorous: read the whole contract, including the Additional Coverages that sit behind the exclusions, before you accept that a peril in Section B ends the conversation. Williams Seafood’s building was destroyed in a sequence that began with an excluded peril, and it was covered anyway, because a separate grant with its own trigger applied. That page of the policy is the one nobody reads.

Georgia already requires the carrier to show its work. Under the Insurance Commissioner’s claim-handling regulation, a denial must reference the specific policy provision, condition, or exclusion the insurer is relying on — see Ga. Comp. R. & Regs. 120-2-52-.03. That requirement is what makes York usable in an ordinary claim. Once the letter names the provision, you can ask the York question: does that provision actually govern the grant I am claiming under?

Ambiguity is not a tie. York restates the two rules that decide close property cases in Georgia — the policy is read as a layman would read it, and exclusions are construed strictly against the insurer. Those same rules run through Nationwide v. Kim and American Strategic v. Helm. An exclusion that can fairly be read two ways is not a denial; it is a dispute.

Now the honest half. If the only route to coverage for your loss runs through the all-risk grant that the exclusions section governs, York will not rescue it. The Court said so plainly about this very insured. When a carrier invokes anti-concurrent language, the productive questions are which grant you are claiming under, whether that grant has its own trigger and its own exclusions, and what the evidence actually shows about the mechanism of loss — not whether the clause is enforceable. In Georgia, on this record, it was.

Where a public adjuster fits. The work York points to is documentary. We inspect, photograph, and document the mechanism of the loss; we bring in the engineering or geotechnical opinion when the cause is contested; we build the estimate the carrier has to answer; and we match the damage to the specific grant in your policy rather than arguing generally about causation. Suing an insurer, litigating a coverage declaratory judgment action, and pleading bad faith are lawyer work — when a claim needs that, we refer it out. More Georgia decisions and statutes, in full text, are on the Georgia claim-law page.

Now you know the rule. Enforcing it against a carrier is a different job — and it's ours. A free, confidential case review by a licensed public adjuster takes three taps.

See if my case qualifies