Case: 12-10933 Date Filed: 08/02/2013 Page: 1 of 4
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
_____________
No. 12-10933
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D. C. Docket No. 3:10-cv-00111-WBH
CHAUCER CORPORATE CAPITAL (NO. 2) LIMITED,
HISCOX DEDICATED CORPORATE MEMBER LIMITED,
LANTANA INSURANCE LIMITED,
QBE SPECIALTY INSURANCE COMPANY,
Plaintiffs-Counter
Defendants-Appellees,
versus
NORMAN W. PASCHALL COMPANY, INC.,
Defendant-Counter
Claimant-Appellant.
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Appeal from the United States District Court
for the Northern District of Georgia
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(August 2, 2013)
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Before MARTIN and FAY, Circuit Judges, and GOLDBERG, *Judge.
PER CURIAM:
Insurer Underwriters Chaucer Corporate Capital (No. 2) Limited, et al.
(“Insurers”) filed a declaratory judgment action in district court after defendant
Norman W. Paschall Company, Inc. (“Paschall”) submitted an insurance claim for
a fire loss. The parties filed cross-motions for summary judgment. Specifically,
Insurers sought declaratory relief in the form of a ruling that they have no duty
under their insurance policy to indemnify Paschall for the loss. Paschall counter-
claimed for the recovery of damages caused by the fire.
Under the terms of the insurance policy, Paschall warranted that “fire
protection sprinklers are provided throughout all buildings,” [Doc. 86-22 at 2], and
that it would maintain an automatic sprinkler system, [id. at 3]. Under the terms of
a “ Protective Safeguard Exclusion,” the policy excludes from coverage:
loss or damage caused by or resulting from fire if, prior to the fire [Paschall]:
1. Knew of any suspension or impairment in [the Automatic Sprinkler
System] and failed to notify [Insurers] of that fact; or
2. Failed to maintain [the Automatic Sprinkler System], over which
[Paschall] had control, in complete working order.
*
Honorable Richard W. Goldberg, United States Court of International Trade Judge, sitting by
designation.
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[Doc 86-3 “Protective Safeguards”]
We review a district court’s grant of summary judgment de novo. Holloman
v. Mail-Well Corp., 443 F.3d 832, 836 (11th Cir. 2006). Summary judgment is
appropriate when there are no genuine issues of material fact, and the evidence
compels judgment as a matter of law in favor of the moving party. Id. at 836-37.
After reviewing the record, reading the parties’ briefs, and hearing oral
argument, we conclude that the district court correctly granted summary judgment
in favor of the Insurers. The district court properly found Insurers carried their
burden of showing that two exclusions apply to bar coverage. First, the district
court properly determined that coverage was barred by the exclusion that applies
where Paschall failed to maintain its automatic sprinkler system, over which it had
control, in complete working order, because Paschall’s maintenance employee had
turned off an entire system of the automatic sprinkler system. We likewise
conclude from the record that the district court correctly determined that the
exclusion applies that precludes coverage where Paschall fails to inform Insurers of
a known suspension or impairment in its automatic sprinkler system. We agree
with the district court’s application of general Georgia Agency Law when it found
that the maintenance employee’s knowledge that the sprinkler system had been
turned off was imputed to Paschall. Because a portion of a sprinkler system being
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Case: 12-10933 Date Filed: 08/02/2013 Page: 4 of 4
“off” constitutes a suspension and/or impairment, and Paschall failed to inform
Insurers about this suspension and/or impairment, we conclude the district court
properly found there was no coverage.
Finally, we agree with the district court’s rejection of Paschall’s argument
that the warranted “Savings” Clause restored coverage. Application of the
Warranty “Savings” Clause would be inappropriate, as coverage was barred by two
exclusions, rather than warranties. Consequently, we affirm the district court’s
grant of summary judgment in favor of Insurers.
AFFIRMED.
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