Georgia Partner Prevails for Insurance Client Following House Fire

Atlanta Partner Steven D. Ginsburg was granted summary judgment in the United States District Court for the Northern District of Georgia on behalf of our client against a local homeowner who filed a lawsuit after his home had been set on fire by our client’s insured, the defendant owners and operators of a handyman services company.

For his suit, a homeowner contracted a handyman services company to remove and replace siding on the east side of his home and his chimney, repair siding under the eaves of his second story, and repair the damaged fascia and soffit boards along the roof line of his home. While nailing siding to the home, the defendants struck the electrical service line that then caught fire and allegedly resulted in damage to the homeowner’s house, personal property and surrounding grounds. The homeowner filed a complaint in Georgia state court against the defendants and alleged claims for negligence, interference with enjoyment of property, breach of warranty, breach of contract, costs and attorneys’ fees. Subsequently, the defendants sought coverage from our client, and the homeowner asserted a claim for his damages.

Our client’s insurance policy contains a Classification Limitation Endorsement that states their policy only covers claims that arise “out of the classification(s) shown on the [policy] Coverage Declarations.” The Coverage Declarations include an Insurance Services Office (“ISO”) classification code for “Handyperson.” This means that our client’s policy covers work performed by a “Handyperson.” The ISO definition of “Handyperson” states that the classification “cannot be assigned to any work that requires a licensed tradesperson to perform the work.” The ISO code does not define “licensed tradesperson.”

In a case of first impression in Georgia, interpreting Georgia statutes, the United States District Court for the Northern District of Georgia held that a residential-basic contractor under Georgia law is “a person engaged in an occupation that requires manual or mechanical skill.” Georgia law requires licensed residential contractors to perform the work. Because the defendants who performed work on the homeowner’s house were not licensed contractors and were acting as a “Handyperson” within the Classification’s definition, the unambiguous language of our client’s insurance policy excludes coverage for losses caused by the defendants, and our insurance company client had no duty to defend the homeowner’s lawsuit.

In September 2024, Steven Ginsburg obtained summary judgment for our client based upon its commercial general liability insurance policy, holding that our client had no duty to defend the defendant insureds, or indemnify them or the homeowner.

Steve finds legal solutions in corporate, commercial, construction, real property and financial services litigation, as well as matters involving professional liability, regulatory requirements, cyber security and data protection.