Dr. T.’s Nature Company had, on a long-term basis, had its two buildings insured under a commercial property policy issued by Southern Trust Insurance Company. Dr. T. sued Southern after the latter denied a loss involving roughly $100,000 in stock and display materials that were destroyed in a fire. After a trial court ruled in favor of Dr. T., the insurer appealed.

Dr. T.’s policy covered a building used for making its products and another for storage, both buildings were leased. Due to building storage racks in the leased warehouse, Dr. T. had temporary need for more space. The lessor gave permission to Dr. T. to use a separate warehouse that was located across the street from the leased buildings. The use was meant to be temporary and the lessor did not charge Dr. T., which placed more than 70 pallets of product and displays in the warehouse that was lent to it. The pallets and property were destroyed in a fire.

Southern denied the loss, alleging that policy language involving property located off-premises excluded the loss. Dr. T.’s argued that another portion of the policy, involving newly-acquired property, was applicable to the stored property. The lower court ruled in favor of Dr. T. based on the newly acquired property wording. Under that wording, eligible property included stock located in newly acquired property.

The higher court reviewed the matter and decided that the permitted, temporary use of the loaned warehouse met an understanding of “acquired” property. It also stated that, if the insurer intended a different meaning for newly-acquired property, it had opportunity to use more specific wording.

The lower court decision in favor of Dr. T. was affirmed.

Southern Trust Insurance Company v. Dr. T’s Nature Products Company. Court of Appeal of Georgia No. A03A0497. Filed June 19, 2003. Affirmed. Westlaw 594 S.E. 2d. 34