CITY OF SOUTH PITTSBURG, TENNESSEE v. JAMES C. HAILEY AND COMPANY, ET AL. - Articles

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Posted by: Tanja Trezise on Jun 28, 2013

Court: TN Court of Appeals

Attorneys 1:

Tracy C. Wooden, Chattanooga, Tennessee, for the appellant, City of South Pittsburg, Tennessee.

Attorneys 2:

Paul R. Leitner and Amanda E. Kelley, Chattanooga, Tennessee for the appellee, James C. Hailey and Company.

Parks T. Chastain and Gordon C. Aulgur, Nashville, Tennessee, for the appellee, Bituminous Casualty Corporation.

Judge(s): DINKINS

In April 2008 the City of South Pittsburg hired a contractor to enlarge its sewage treatment plant. During construction of the project several sinkholes developed, the last of which occurred in February of 2009 and caused the plant’s lagoon to collapse. The City made claim on the contractor’s builders’ risk insurance policy; the insurer denied the claim, contending that construction of the project was complete at the time of the collapse. The City, which had filed suit against the contractor, amended the complaint, adding the insurer as a party and asserting a claim for breach of contract against the company; the City also requested that the court issue a declaratory judgment that the losses sustained by the city were covered by the policy. The court subsequently granted the insurance company’s motion for summary judgment and denied the city’s motion for partial summary judgment. The city and the engineering firm engaged by the City to plan the project appeal the grant of summary judgment to the insurer and the denial of the city’s motion. We have determined that the court erred in granting the insurer’s motion and denying the City’s; consequently, we reverse both judgments.