Hankins v. Maryland Casualty Company
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In July 2001, Kaye Hankins entered into a home-construction contract with Elite Homes, Inc. ("Elite"). An August 2001 soil-test report on the subject property recommended that "a stabilizing blanket of natural silty clays . . . and/or compacted fill soils having a maximum 7-foot thickness" was required "to minimize the Yazoo Clay . . . swell or heave potential to within limits tolerable to a strong slab foundation . . . ." Hankins received assurances from Elite that the Yazoo clay "was nothing to be concerned about." She moved into the new home in April 2002. During Hankins's first year in the home, she reported to Elite numerous cracks, leaks, and difficulties in closing doors and windows. In September 2009, Hankins filed a complaint against Elite averring "that the damage which has occurred to said house . . . would not have occurred except for the negligence" of Elite. Thereafter, a "Default Judgment" of was entered against Elite. In August 2010, Hankins filed a "Suggestion for Writ of Garnishment" against Elite's commercial general liability ("CGL") insurer, Maryland Casualty Company/Zurich American Insurance Company ("Maryland Casualty"). In October 2010, a default judgment was entered against Maryland Casualty. Subsequently, Maryland Casualty filed a "Motion to Suspend Execution of Default Judgment against Maryland Casualty and For Leave to File Answer to Writ of Garnishment," which argued, inter alia, that because its CGL policy "exclud[ed] coverage for property damage caused by earth movement," then it "has no property or effects in its possession belonging to" Elite. Maryland Casualty then filed a "Motion for Summary Judgment" on the same basis. The circuit court concluded that the "earth movement" endorsement "excludes the damages suffered by [Hankins] from coverage under the policy." Based thereon, the circuit court granted summary judgment in favor of the insurance company, and set aside the default judgment. Upon review, the Supreme Court found Maryland Casualty's "earth movement" endorsement was unambiguous and operated to exclude the property damage Hankins suffered from coverage under the CGL policy. Accordingly, the Court affirmed the circuit court's order granting summary judgment to the insurance company, and the setting aside of the default judgment.
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