Case: 13-13541   Date Filed: 04/15/2014   Page: 1 of 8


                                                         [DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT
                       ________________________

                             No. 13-13541
                         Non-Argument Calendar
                       ________________________

                D. C. Docket No. 6:11-cv-02001-CEH-DAB

CANAL INDEMNITY COMPANY,

                                                     Plaintiff-Appellee,

                                  versus

MARGARETVILLE OF NSB, INC.,
MARGARET JAN WALKER,
Trustee,
MARGARET JAN WALKER
Trust,

                                                     Defendants-Appellants.



                       ________________________

                Appeal from the United States District Court
                    for the Middle District of Florida
                     _________________________

                             (April 15, 2014)

Before PRYOR, MARTIN and BLACK, Circuit Judges.

PER CURIAM:
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       Margaretville of NSB, Inc.; Margaret Jan Walker, Trustee; and Margaret Jan

Walker Trust (Walker Defendants) appeal the district court’s grant of summary

judgment and declaratory judgment in favor of Canal Indemnity Company (Canal).

The Walker Defendants contend the district court erred in granting summary

judgment and declaratory judgment because Canal has a duty to defend Bad Lands

Excavating (Bad Lands) in an underlying state court lawsuit. After review, 1 we

reverse and remand.

                                  I. BACKGROUND

A. The Policy

       Canal issued a policy of Commercial General Liability Insurance to Bad

Lands, with effective dates from August 23, 2006 through August 23, 2007. The

policy contains a Special Exclusion Endorsement, which contains the following

classification limitation provision:

       This insurance applies to bodily injury, property damage, personal
       injury, advertising injury or medical expense arising out of only those
       operations which are classified and shown on the Commercial General
       Liability Coverage Declarations, its endorsements, and supplements.

(quotations omitted). The policy’s Declarations, in turn, refer to the following

operation classification: “Grading of Land—INCL. Borrowing, Filling or Back




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         We review the district court’s grant of summary judgment de novo. Myers v. Bowman,

, 1326 (11th Cir. 2013).
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Filling.” The policy does not provide a definition or explanation of the terms

“grading of land,” “borrowing,” “filling,” or “back filling.”

B. The Project

      Trovillion Construction and Development hired Bad Lands to perform labor

at a construction site on the beach in New Smyrna Beach, Florida, where an eight-

story condominium called “The Wave” was being developed. Bad Lands’ owner,

Lloyd Scheffler, testified he was initially directed to clear a four-foot path for a

chain link fence and a silt fence. Later, Scheffler did excavation work for the

foundation of the building. As the equipment operator, he was “just there to move

the dirt from the site to the back of the truck and let the truck go down the road.”

      While excavating the foundation of the building and filling the trucks with

the excavated soil, Scheffler realized his digging was creating a risk of harm to the

adjacent Walker property. In September 2006, Scheffler installed sheet piling

along the property line between The Wave project and the Walker property to

prevent his work from undermining the foundation of the adjacent Walker

property. The sheet piles Scheffler placed in the ground along the Walker property

line were between 19 and 20 feet in length. Scheffler installed the sheet piling

using an excavator with a vibrating pile driver attached. The total length of the

barrier wall of sheet piling Scheffler installed was approximately 140 to 150 lineal

feet, driven to a depth of approximately 18 to 19 feet. The barrier wall of sheet


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pilings was installed approximately five to eight feet from the property line

separating The Wave construction site from the Walker property.

C. The Underlying Case

      The Walker Defendants sued Bad Lands, and others, in Florida state court.

Bad Lands was sued in negligence for “installing sheet pilings so as to cause

damage to [the Walker Defendants’] property,” and more generally for breaching

its duty “not to engage in activities which would cause damage to [the Walker

Defendants’] property.”

                                 II. DISCUSSION

      Under Florida law, “an insurer’s duty to defend its insured against a legal

action arises when the complaint alleges facts that fairly and potentially bring the

suit within policy coverage.” Jones v. Fla. Ins. Guar. Ass’n, Inc., 

,

443-44 (Fla. 2005). Thus, the issue presented is whether the allegations against

Bad Lands in the underlying case fall within Canal’s policy coverage. The

allegations against Bad Lands include damage from the action of “installing sheet

pilings” and breaching its duty “not to engage in activities which would cause

damage.”

      The construction of an insurance policy is a question of law. Wash. Nat’l

Ins. Corp. v. Ruderman, 

, 948 (Fla. 2013). “Policy language is

considered to be ambiguous if the language is susceptible to more than one


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reasonable interpretation, one providing coverage and the other limiting coverage.”

alterations omitted). In construing an insurance contract, a

court “should read each policy as a whole, endeavoring to give every provision its

full meaning and operative effect.” 

“[A]ny ambiguity

which remains after reading each policy as a whole and endeavoring to give every

provision its full meaning and operative effect must be liberally construed in favor

of coverage and strictly against the insurer.” 

Where “one reasonable

interpretation of the policy provisions would provide coverage, that is the

construction which must be adopted.” 

Further, “[i]nsurance contracts

are construed according to their plain meaning.” Taurus Holdings, Inc. v. U.S. Fid.

& Guar. Co., 

, 532 (Fla. 2005).

      We conclude the language in the policy is ambiguous as to whether Bad

Lands’ actions of “installing sheet piling” and “engag[ing] in activities which

would cause damage” are covered. The policy states that it applies to injuries or

damages “arising out of only those operations which are classified and shown on

the Commercial General Liability Coverage Declarations, its endorsements, and

supplements,” and the Declaration covers “Grading of Land—INCL. Borrowing,

Filling or Back Filling.” Thus, the plain language of the insurance contract states it

covers damages arising out of grading of land, including borrowing, filling, or back

filling, but it does not define those terms.


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       The district court began its analysis by noting that courts may consult

dictionaries in order to ascertain the plain meaning of words in a contract to

determine if an ambiguity exists. See Garcia v. Fed. Ins. Co., 

, 291-

92 (Fla. 2007). The court then defined “grade,” but failed to define “borrowing,”

“filling,” or “back filling.”

       The Dictionary of Architecture and Construction defines grading as “[t]he

action of excavating or filling or a combination thereof.” Dictionary of

Architecture & Construction 469 (4th ed. 2005). The same dictionary defines

“borrow” as “[m]aterial taken from one location for use as fill elsewhere.” 

“Fill” is defined as “[s]oil, crushed stone, or waste materials, used to raise an

existing grade or as a man-made deposit,” or, alternatively “[t]he depth or the

volume of such material so added.” 

“Backfill” is defined as “[s]oil

which is replaced in an area that has been excavated previously.” 

      The district court also never defined “sheet piling” in its analysis, but in its

summary of the Walker Defendants’ claims, quoted their definitions for “pile” and

“pile driver.” The definitions quoted by the district court suggest Bad Lands was

driving long slender columns into the ground to carry a vertical load, but “sheet

pile” is defined differently—“one of a number of piles, interlocked or meshed with

similar units, to form a barrier to retain soil or to keep water out of a foundation.”

“Sheet piling” is defined as “[a] barrier or diaphragm formed of sheet


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piles; used to prevent the movement of soil, to stabilize foundations, to construct

cofferdams, to prevent the percolation of water, etc.” 

policy against the drafter, we disagree with the district

court’s conclusion that the policy is unambiguous and conclude that it is

ambiguous whether sheet piling arises out of the operations of grading, filling,

back filling, and borrowing such that sheet piling must be covered. See 

(stating when an ambiguity in a policy provision does exist, it is

interpreted against the insurance company that prepared the policy and in favor of

the policy holder). All of the relevant definitions are related to the movement of

soil, which makes it possible that damages from sheet piling, an activity incidental

to the movement of soil, are damages arising out of grading. Additionally, the

district court focused on its interpretation that grading is a “horizontal” activity,

while sheet piling is a “vertical” activity, but the definition of grading includes

excavating, which is a vertical activity. Further, the underlying suit’s more general

allegation that Bad Lands breached its duty “not to engage in activities which

would cause damage to Plaintiffs’ property,” could also arise out of grading, which

the policy clearly covers.

      Thus, because we conclude the exclusion is ambiguous with one reasonable

interpretation being that it covers the damages from the allegations in the

underlying case, the policy “must be construed against the insurer and in favor of


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coverage without resort to consideration of extrinsic evidence.” 

; see also U.S. Fire Ins. Co. v. J.S.U.B., Inc., 

, 884

(Fla. 2007) (“If U.S. Fire intended to preclude coverage based on the cause of

action asserted, it was incumbent on U.S. Fire to include clear language to

accomplish this result.”). We therefore conclude Canal has a duty to defend Bad

Lands in the underlying case and reverse the district court’s grant of summary

judgment and declaratory judgment on this issue. We remand this case to the

district court for further proceedings.

      REVERSED AND REMANDED.




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