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South Carolina
Judicial Department
2005-UP-062 - SC Farm Bureau v. Berlin
In this insurance case, we must decide whether damage to Repsondents’ home


In The Court of Appeals

South Carolina Farm Bureau Mutual Insurance Company,        Appellant,


Henry Berlin and Terry Berlin,        Respondents.

Appeal From Charleston County
R. Markley Dennis, Jr., Circuit Court Judge

Unpublished Opinion No. 2005-UP-062
Submitted December 1, 2004 – Filed January 25, 2005


Andrew Steven Halio, of Charleston, for Appellant.

Claron A. Robertson, III, and Paul E. Sperry, both of Charleston, for Respondents.

PER CURIAM: In this declaratory judgment action concerning insurance coverage, we are asked to determine the efficacy of an exclusion from coverage for “loss . . . caused by . . . insects” in a homeowner’s insurance policy.  The insured’s home was damaged as a result of honey seeping into the ceilings and walls of their home from a honeybee hive.  While we recognize the rule of construction requiring clauses of exclusion in an insurance policy to be narrowly interpreted, and clauses of inclusion to be broadly construed, we find—based on the stipulated facts—that the loss sustained by the homeowners was “caused by” insects.  We conclude, therefore, that the loss is not covered by the policy.  In so holding, we reverse the judgment of the circuit court. [1]


The parties entered into a “stipulation of facts.”  A colony of honeybees nested in the walls and ceiling of Henry and Terry Berlin’s home.  A hole was cut into the ceiling to ensure that the honeybees were exterminated or abandoned the nests.  After the bees abandoned the nest or were exterminated, the honey contained in the hive began to seep down through the walls and ceiling, damaging the home.

The Berlins notified their homeowner’s insurance carrier, South Carolina Farm Bureau, of the damage.  Farm Bureau denied coverage, specifically pointing to a policy provision that excluded coverage for “loss . . . caused by . . . birds, vermin, rodents, insects or domestic animals.” 

Farm Bureau subsequently brought this declaratory judgment action seeking a determination that the damage to the Berlins’ residence was caused by insects and therefore was not a covered loss under the policy exclusion.  The Berlins counterclaimed for breach of contract.  Upon consideration of the parties’ cross motions for summary judgment, the circuit court found the language in the policy exclusion—specifically the phrase “caused by”—was ambiguous and construed it against Farm Bureau.  The circuit court thus found the damage from the dripping honey was not caused by insects under the policy language and granted judgment in favor of the Berlins.


As noted above, the motion for summary judgment at issue in this appeal was decided by the circuit court on facts stipulated by the parties.  After a thorough review of the record, we find no argument raised to the circuit court that a question of material fact existed.  To the contrary, both parties suggested that the dispute was essentially legal in nature, and therefore ripe for final disposition at the summary judgment stage.  In cases with stipulated facts, this court’s review is limited to “whether the trial court properly applied the law to those facts.” Kay v. State Farm Mut. Auto. Ins. Co., 349 S.C. 446, 448, 562 S.E.2d 676, 678 (Ct. App. 2002) (quoting WDW Props. v. City of Sumter, 342 S.C. 6, 10, 535 S.E.2d 631, 632 (2000)).  Were we to now entertain arguments on appeal that a question of fact precluded summary judgment, this court would violate the longstanding rule that we only address those issues properly raised and argued below.  See, e.g., Schofield v. Richland County School Dist., 316 S.C. 78, 82, 447 S.E.2d 189, 191 (1994) (holding that an issue may not be raised for the first time on appeal, but must have been raised to the trial judge to be preserved for appellate review).


Farm Bureau claims the circuit court erred in granting summary judgment in favor of the Berlins.  Specifically, Farm Bureau argues the policy language excluding coverage for damage caused by insects was not ambiguous and that the Berlins’ losses resulting from the honey seepage fell squarely within that coverage exclusion.  We agree.

Resolution of this coverage question hinges on the interpretation of the policy language excluding coverage for “loss . . . caused by . . .  insects.” [2]   Insurance policies are subject to the general rules of contract construction. Fritz-Pontiac-Cadillac-Buick v. Goforth, 312 S.C. 315, 318, 440 S.E.2d 367, 369 (1994). When the language of an insurance contract is free from ambiguity, the words used must be taken and understood in their plain, ordinary and popular sense, and such construction is for the court. Id.  An insurer’s obligation under a policy of insurance is defined by the terms of the policy itself, and cannot be enlarged by judicial construction. Nationwide Mut. Ins. Co. v. Commercial Bank, 325 S.C. 357, 360, 479 S.E.2d 524, 526 (Ct. App. 1996).  It is true that ambiguous or conflicting terms in an insurance policy must be construed liberally in favor of the insured and strictly against the insurer. Diamond State Ins. Co. v. Homestead Indus., Inc., 318 S.C. 231, 236, 456 S.E.2d 912, 915 (1995). Moreover, “rules of construction require clauses of exclusion to be narrowly interpreted, and clauses of inclusion to be broadly construed.” McPherson v. Michigan Mut. Ins. Co., 310 S.C. 316, 319, 426 S.E.2d 770, 771 (1993).    However, these rules of construction, inuring to the benefit of the insured, do not trump clear and unambiguous policy terms.  Where the intention of the parties is clear, courts have no authority to torture the meaning of policy language to extend coverage that was never intended by the parties. Diamond State, 318 S.C. at 236, 456 S.E.2d at 915.

We are presented with the narrow question:  Was the damage to the Berlins’ home from the honey seeping from the honeybee hive “caused by” the honeybees?  In light of the stipulated facts, we answer the question in the affirmative, for there is indisputably a direct and immediate causal relationship between the honeybees and resulting damage from the honeybee hive. 

The Berlins argue that the phrase “caused by” in an insurance policy inclusion clause warrants a broad and expansive interpretation and, conversely, a narrower interpretation in the context of a policy exclusion.  We agree, but that distinction does not, we believe, justify our rejection of the policy exclusion here.  See King v. North River Ins. Co., 278 S.C. 411, 413, 297 S.E.2d 637, 638 (1982) (construing a clause of inclusion broadly, noting that “it is generally sufficient to prove the event insured against was the efficient cause of the loss, even though not the sole cause”);  Stevenson v. Connecticut General Life Ins. Co., 265 S.C. 348, 349-50, 218 S.E.2d 427, 430 (1975) (construing a clause of inclusion broadly, holding that policy language insuring against losses resulting from an accidental bodily injury “directly and independently of all other causes” should be interpreted as meaning those losses “proximately caused by the accidental bodily injury, even though some other cause may have contributed to a minor degree”); Lesley v. American Sec. Ins. Co., 261 S.C. 178, 182-83, 199 S.E.2d 82, 84-85 (1973) (interpreting a policy inclusion clause insuring losses “directly and immediately resulting from . . . fire and lightning” as meaning losses proximately caused by fire and lightning—specifically opining that “the terms ‘proximate and immediate’ are virtually synonymous”);  7 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 101:40, at 101-127 to 101-129 (3d ed. 1999) (“the rule of causation applied in the context of insurance coverage is ‘proximate cause’”)   (footnotes omitted).   This rule of liberal construction in favor of the insured, to be sure, requires a different interpretation and application of the same causal-relationship phrase when it is part of a clause of exclusion.  Where we part ways with the Berlins’ analysis is their conclusion that this rule of construction, standing alone, mandates a rejection of the policy exclusion before us and a finding of coverage.  We adhere to the view that the phrase “caused by” in an exclusion clause retains some meaning and efficacy, albeit a narrow and restricted meaning.

The case of McPherson v. Michigan Mutual Insurance Co. provides some guidance.  In McPherson, our supreme court granted certiorari to review a decision of this court.  We had held that the City of Charleston’s general liability insurance policy excluded coverage for McPherson’s injuries resulting from a collision with a Charleston police vehicle.  McPherson v. Michigan Mut. Ins. Co., 306 S.C. 456, 412 S.E.2d 445 (Ct. App. 1991), aff’d as modified, 310 S.C. 316, 426 S.E.2d 770 (1993).  The supreme court affirmed in result, but found fault with this court’s construction of the relevant policy exclusion.  Recognizing that the phrase in the exclusionary clause—“arising out of”—is subject to many interpretations, the supreme court noted that this court erred when it “relied primarily on cases construing clauses of inclusion to interpret the phrase ‘arising out of’ in the exclusion provision of Charleston’s general liability policy.” McPherson, 310 S.C. at 319, 426 S.E.2d at 771.  The supreme court adopted a construction of the phrase in the exclusion provision “most favorable to the insured.” Id. at 319-20, 426 S.E.2d at 771.  The court held “that for the purpose of construing an exclusionary clause in a general liability policy, ‘arising out of’ should be narrowly construed as ‘caused by.’ However, we find that even under a narrow construction of the exclusion, the injuries . . . are not covered under the policy.”  Id. at 320, 426 S.E.2d at 771-72 (emphasis added).  We similarly conclude that even under a narrow construction, the damage to the Berlins’ home was “caused by” the honeybees.

The stipulated facts lead to the inescapable conclusion that the cause of the damage to the Berlins’ home was the activity of the honeybees themselves.  Were we required to resort to an attenuated proximate cause analysis to link the damage to the Berlins’ home to the honeybees, the rule in McPherson would compel a different result.  Here, however, the nexus between the honeybees, honey, and damage is immediate and direct.  It belies common sense and experience to suggest that, merely because the homeowners took measures to eliminate an insect infestation, the causal connection to the insects themselves is broken such that the natural, consequential effects of the insect activity are no longer subject to a standard policy exclusion for damage “caused by” insects.


We find the damage to the Berlins’ home was caused by the honeybees and that Farm Bureau properly relied on the applicable exclusion in denying coverage.  The judgment of the circuit court is



     [1] In fairness to the able circuit judge, our holding is grounded on authority that was not presented to him.

     [2] The parties stipulated that “[a] honeybee is an ‘insect’ under the policy.”