James Hankins obtains summary judgment for insurer in breach of contract and declaratory judgment case, relating to a property damage insurance coverage dispute for the destruction of several HVAC units at a construction site. In Warhorse, LLC v. Donegal Mutual Insurance Company, Warhorse, a Donegal insured, filed a claim for breach of contract and declaratory judgment against Donegal, relating to insurance coverage dispute. Warhorse sought insurance coverage for the intentional destruction of several HVAC units, and you may recall that Warhorse was the demolition contractor on a project.  Balfour Beatty hired non-party KMD, and then KMD subcontracted with Warhorse to perform work on the project down at the Americas Mart in downtown Atlanta. Warhorse didn’t have a written contract for the work that it was supposed to perform, but the owner of Warhorse provided an explanation of the scope of work to Warhorse’s foreman, Luis Cuellar. At the project site, Warhorse’s owner explained to the foreman that another contractor on the job was supposed to cut and drop mechanical, electrical, and plumbing materials onto the floor of the worksite, and then Warhorse’s employees were supposed to demolish and remove the materials. If the materials were supposed to be reused, then Warhorse’s employees were not supposed to mess with any materials set in the reuse area.  Warhorse’s employees destroyed some HVAC units, which were supposed to be saved.  Warhorse contended that there was confusion on where the materials were placed and whether they were supposed to be saved, but there was no dispute that Warhorse’s employees intentionally destroyed the HVAC units. Warhorse filed its insurance coverage case, seeking to recover for the units that its employees intentionally destroyed and discarded.

At issue in the coverage dispute was whether the intentional destruction of the HVAC units, when if it was done under an alleged misunderstanding premised on erroneous information (i.e. whether the units were supposed to saved and reused), constituted an occurrence under the insurance policy. Donegal’s policy provided in part that this insurance only applies to property damage caused by an “occurrence.”  The policy defined “occurrence” as an accident. The Court agreed with Donegal that Warhorse’s intentional conduct, even if there was a misunderstanding on whether the HVAC units were supposed to be saved, did not constitute an accident under Georgia law, and therefore, there was no occurrence under the subject insurance policy. Therefore, the Court granted summary judgment on all claims against Donegal.