Selective Way Ins. Co. v. Litigation Tech. Inc.

Water that damaged the insured's office space lost its character as "surface water" when it gathered in a 13-foot deep pit excavated by the city and flowed into the structure through the length of an underground pipe.

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Litigation Technology, Inc. “Litigation Technology” sued its insurer, Selective Way Insurance Co. “Selective Way”, for breach of an insurance contract and bad faith refusal to pay a claim. Selective Way moved for summary judgment, asserting that Litigation Technology’s insurance policy’s “surface water” exclusion barred the claim. The trial court denied Selective Way’s motion and granted summary judgment to Litigation Technology on the breach of contract claim. With respect to bad faith refusal to pay, the trial court concluded that factual questions remain for resolution by a jury. Selective Way appeals and, for the reasons that follow, we affirm. 1. Summary judgment is appropriate when the record “shows that there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law.”1 Many of the facts in this case are undisputed. Litigation Technology leased office space in the basement of a building on Spring Street in Atlanta and insured that space through a policy issued by Selective Way. In February 2000, sewage began overflowing through the plumbing in Litigation Technology’s basement offices, and the City of Atlanta investigated to determine the cause.

During the investigation, the City dug a large, thirteen-foot deep pit beneath the surface of the ground under Spring Street, immediately adjacent to Litigation Technology’s building. Inside the pit, a pipe was uncovered which extended under the street and sidewalk into Litigation Technology’s basement wall, two feet above the floor. The pipe was capped inside the basement, but a city worker removed the cap as part of the investigation. Following excavation, the pit was covered with a steel plate.

Selective Way Ins. Co. v. Litigation Tech. Inc.

Water that damaged the insured's office space lost its character as "surface water" when it gathered in a 13-foot deep pit excavated by the city and flowed into the structure through the length of an underground pipe.

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