In Owners Ins. Co. v. Smith Mechanical Contractors, Inc. , 294 Ga. App. 754 670 SE2d 213 2008, the Court of Appeals affirmed the trial court’s grant of summary judgment in favor of Smith Mechanical Contractors, Inc., finding that Smith Mechanical’s insurer, Owners Insurance Company, was required to provide coverage under an insurance policy for damages that occurred to certain machinery while it was being moved by Smith Mechanical. We granted certiorari to consider the following questions: Whether the Court of Appeals erred in holding that the “care, custody or control” exclusion of the policy does not apply under the facts of this case If not, whether the Court of Appeals erred in rejecting the insurer’s alternative argument that the customer retained “all-encompassing” and exclusive control of the machine and its insured thus incurred no legal liability when the machine was damaged For the reasons set forth below, we answer both questions in the negative and affirm. 1. As found by the Court of Appeals, the underlying facts of this case are as follows: Smith Mechanical is a company that repairs and upgrades equipment. Owners issued a commercial general liability insurance policy to Smith Mechanical insuring, among other things, a crane Smith Mechanical owned and operated in its business. Birdsong Peanut Company contracted with Smith Mechanical to remove a commercial peanut cleaner from its foundation and set it on a truck arranged by Birdsong for shipment to another Birdsong plant in Texas. While Smith Mechanical was using its crane to move the cleaner, the asphalt beneath the crane’s left front outrigger caved-in, causing the crane to tip forward and drop the cleaner to the ground. The crane then fell onto the peanut cleaner. Bobby Royce Smith, Smith Mechanical’s principal, arranged for the purchase of a replacement peanut cleaner for $27,500.00. Birdsong purchased the replacement cleaner for $27,500.00 and Bobby Royce Smith gave Birdsong a promissory note for $27,500.00 which Smith Mechanical repaid to Birdsong in two payments, along with interest. Smith Mechanical timely submitted a claim and required proofs of loss to Owners for indemnification under its commercial general liability insurance policy. Owners paid Smith Mechanical for damage to the crane but denied coverage for damage to the cleaner. Owners never provided a defense against any claims that Birdsong asserted against Smith Mechanical. Smith Mechanical brought this action to recover indemnity under the policy for property damage to the cleaner. Owners filed a motion for summary judgment, which the trial court denied. Smith Mechanical then filed a motion for summary judgment and Owners filed an “alternative” motion for summary judgment in response to Smith Mechanical’s motion. The trial court granted summary judgment to Smith Mechanical and Owners filed the present appeal. In relevant part, the policy at issue here provides that Owners will pay those sums that Smith Mechanical becomes “legally obligated to pay as damages” because of “property damage” caused by an “occurrence,” which is further defined as an “accident.” The policy defines “mobile equipment” to include “power cranes” and Smith Mechanical’s hydraulic crane is separately listed as scheduled equipment covered by the policy. The policy specifically excludes coverage for property damage arising from the use of the “mobile equipment” in a prearranged racing, speed or demolition contest or stunting activity. The policy also expressly excludes liability for “property damage to . . . personal property in the care, custody or control of the insured.” It is this exclusion that Owners contends applies in the present case. Punctuation omitted. Id. at 754-755.
2. Owners contends that it is not required to reimburse Smith Mechanical for the damage to the peanut cleaner because it was in the care, custody, or control of Smith Mechanical at the time that it was damaged.
