Custom Planning & Dev. Inc. v. American Nat'l Fire Ins. Co.

Custom Planning & Development, Inc. and Tony Soufastai, the insureds, sued their insurer, American National Fire Insurance Company for breach of its contract to indemnify them for a claim that had been defended on a reservation of right at arbitration. The arbitrator found that there had been no negligence by the builder but that there had been a breach of implied warranty and of contract. The insurer contended that there was no occurrence under the policy; that there was a contractual liability exclusion; that there was a business risk exclusion; and that there was an exclusion by damage to property. The trial court granted summary judgment. Finding no error, we affirm. In December of 1997, Soufastai purchased a lot at 1630 Powers Ridge Place, Atlanta, Fulton County, Georgia and began excavating the property; he discovered that the site consisted of loose fill, he had the lot excavated, refilled with replacement soil, and compacted. A subcontractor built a crosstie retaining wall. A house and pool were constructed on the property. On September 11, 1998, James and Jeanne Calloway were conveyed the house, pool, and land. The Calloways contended that the retaining wall was defective because of poor soil compaction and the presence of trash and debris in the fill soil.

On December 5, 2000, the Calloways invoked the arbitration provision in the sales contract. On January 2, 2001, American National sent its first reservation of rights letter to Custom Planning and Soufastai. On July 2, 2001, American National sent its second reservation of rights letter.