VIRGINIA M. HERNANDEZ COVINGTON, District Judge.
This matter comes before the Court pursuant to Plaintiff Zurich American Insurance Company's Motion for Summary Judgment (Doc. # 57), which was filed on January 31, 2017. Defendant Robert A. Dalzell, Inc. filed a Response in Opposition to the Motion (Doc. # 67) on March 20, 2017, to which Zurich replied (Doc. # 70) on March 30, 2017. As explained below, the Motion is denied.
Maryland Casualty Company (now Zurich) issued four policies of primary commercial general liability and umbrella liability insurance to European Tile and Floors, Inc. that were in effect from July 18, 2005, until February 17, 2009. (Doc. # 57-7-57-10). Each primary policy is subject to a $1 million limit for personal and advertising injury, $1 million each occurrence, and $3 million general aggregate. (
The Zurich primary policies are subject to the following requirements:
(
Mark William Ellis opened European in 2000 and served as the president of the corporation. (Ellis Depo. Doc. # 57-3 at 8). In June of 2006, Ellis received a fax solicitation from "Business to Business Solutions" for advertizing services. (
Robert A Dalzell, Inc. received one of the unsolicited faxes on June 22, 2006, and brought a putative class action lawsuit against Ellis and European for illegal fax blasting in 2009. (
Ellis testified that he "knew [he] had insurance," and he accordingly "contacted Zurich, who was [his] insurance carrier, and spoke with someone in customer service about the suit, and they referred to the policy and said that I wasn't covered under the policy." (Ellis Depo. Doc. # 57-3 at 21-22). Ellis testified that a Zurich representative, referring to specific pages of the insurance policy, told Ellis over the phone that "fax lawsuits are excluded." (
Zurich's mass litigation claims specialist, Adam McCabe, testified in a Rule 30(b)(6), Fed. R. Civ. P., deposition that, in 2009, (at the time Dalzell sued European), Zurich maintained a call center for Zurich's insureds "to submit [] claim[s] via telephone." (McCabe Depo. Doc. # 57-11 at 51, 53). Zurich's call center employees used a system called "EZ Access" to set up claims over the telephone. (
Ellis contacted Jeff Baughman, Esq., an attorney who had approximately one year of experience at the time, and engaged Baughman to be his attorney. (Ellis Depo. Doc. # 57-3 at 22, 24). Baughman represented Ellis and European until they "ran out of money" and thereafter, Ellis "appeared without counsel." (
Dalzell's lawsuit against Ellis and European was filed on August 28, 2009, in the Circuit Court of the Sixth Judicial Circuit in and for Pinellas County. (Doc. # 36 at ¶ 7). The Complaint sought relief on behalf of all persons who (1) within four years prior to the date of the complaint (2) were sent telephone facsimile messages of material advertizing the property, goods, or services of Ellis and European, (3) with whom they did not have prior express permission, and (4) with whom they did not have an established business relationship. (
Although Dalzell's Complaint was served on European and Ellis on September 3, 2009, no responsive pleading was filed until two years later, on November 7, 2011. (
Thereafter, Dalzell filed a Motion for Summary Judgment based on 4,278 facsimile transmissions to the class. (Doc. # 36 at ¶ 14). Neither Ellis nor European opposed Dalzell's Motion for Summary Judgment and that Motion was granted. (
Thereafter, Dalzell's attorney decided to "go[] after the insurance company" — Zurich. (Ellis Depo. Doc. # 57-3 at 43). Dalzell filed a second lawsuit, this time against Zurich in the Circuit Court of Cook County, Ilinois, to collect on the multimillion dollar judgment. (Doc. # 36 at ¶ 23). On February 29, 2016, Zurich contacted Ellis to ask for his personal assistance in defending Zurich against Dalzell's Illinois lawsuit. (Ellis Depo. Doc. # 57-3 at 66). During his deposition, Ellis explained that he lost all of his "dreams" including his flooring business and his beach house and had to file for bankruptcy. (
On March 24, 2016, Zurich filed suit in this Court against European and Dalzell. (Doc. # 1). On May 9, 2016, Zurich filed its First Amended Complaint containing the following counts: breach of contract against European (Count I); Declaratory Judgment against European and Dalzell for "No Coverage Based on Insureds' Breach of Notice and Cooperation Conditions" (Count II); Declaratory Judgment Against European and Dalzell for "No Coverage Obligation Based on Violation of Statutes Exclusion" (Count III); Declaratory Judgment against European and Dalzell for "No Coverage Based on Violation of Communication or Information Law Exclusion" (Count IV); and Declaratory Judgment Against European and Dalzell for "No Duty to Indemnify Based on No Property Damage or Personal and Advertizing Injury Caused by an Offense During the Policy Period" (Count V). (Doc. # 36).
Zurich explains that it did not name Ellis as a Defendant because Ellis received a complete discharge from all liability in his bankruptcy proceedings, which occurred between 2013-2014. (
On January 31, 2017, Zurich filed a Motion for Summary Judgment as to Counts I (breach of contract against European) and Count II (declaratory judgment against European and Dalzell for no coverage based on breach of notice and cooperation policy provisions). (Doc. # 57). Dalzell responded to the Motion, but European did not, as it has been defaulted. (Doc. # 67). Zurich filed a Reply on March 30, 2017. (Doc. # 70).
On May 15, 2017, the parties filed their Motions in Limine. (Doc. ## 71, 72). Those Motions are ripe (Doc. ## 73, 75) and will be addressed via separate Order.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute alone is not enough to defeat a properly pled motion for summary judgment; only the existence of a genuine issue of material fact will preclude a grant of summary judgment.
An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.
If there is a conflict between the parties' allegations or evidence, the non-moving party's evidence is presumed to be true and all reasonable inferences must be drawn in the non-moving party's favor.
The issue presented on summary judgment is whether European's alleged failure to give proper notice to Zurich of the Dalzell lawsuit and European's alleged failure to cooperate with Zurich preclude coverage. The parties agree that Florida law applies and this Court agrees. In diversity cases, the Court applies the substantive law of the forum state unless federal constitutional or statutory law compels a contrary result.
Notably, on July 13, 2007, a district court analyzed an insurance policy similar to the applicable Zurich policy and concluded: "Under Florida law, advertizing injury coverage for `oral or written publication of material that violates a person's right of privacy' does not extend to unsolicited facsimile transmissions of commercial advertisements. Transportation therefore does not have a duty to indemnify the plaintiffs for Southeast's violations of the TCPA."
With a ruling from the Eleventh Circuit and the Florida Supreme Court regarding coverage for "advertizing injuries" stemming from unsolicited fax transmissions, Zurich seeks to avoid making any payments to under the theory that its insured — European — breached the insurance policy. In its Motion for Summary Judgment, Zurich argues: "European's failure to provide any — let alone timely — written notice to Zurich of the Underlying TCPA Action is a breach of the policies' express notice condition which has resulted in prejudice to Zurich, entitling it to summary judgment as a matter of Florida law." (Doc. # 57 at 14).
Zurich supplies the Court with a catalog of cases holding that failure to comply with a policy provision requiring timely notice of a suit establishes a basis for denial of coverage.
"Most Florida cases treat the issue in a two step manner, in which consideration must first be given to whether the insured's notice was untimely."
However, under Florida law, "one can waive the written notice requirement when the carrier had actual notice of the claim."
Summary judgment is not appropriate on the issue Zurich isolates in the Motion for Summary Judgment because there is a genuine dispute of material fact regarding when — if ever — European provided notice of the Dalzell suit to Zurich. Dalzell's position is that Ellis provided oral notice to Zurich of the Dalzell suit upon being served with the complaint and without any delay whatsoever. Zurich takes the opposite position — claiming that European never provided it with notice of the suit, and that Zurich did not receive notice of the lawsuit until years after service of the Complaint and only after entry of the multimillion dollar judgment against its insured. According to Zurich, it was Dalzell, not Ellis or European, that notified Zurich of the underlying TCPA case and, at that point, it was too late to defend. The Court is not in a position to make the necessary credibility determination.
The Court understands why Zurich relies upon
The Court takes note of Zurich's argument that Ellis's testimony that he provided oral notice of the suit to Zurich is "self-serving" and uncorroborated. Zurich indicates: "Courts routinely hold that a person's testimony standing alone — without any other corroborating evidence — does not create a substantial conflict in evidence and thus does not give rise to a triable issue of fact." (Doc. # 70 at 11). Interestingly, Zurich cites to
First, the Court does not see how Ellis's testimony is "self-serving" because Ellis is not a party to this lawsuit, he is not named on the judgment, and he has been discharged of all financial responsibility for the relevant lawsuit through bankruptcy proceedings. Furthermore, his company, European, is no longer in business. As explained by Zurich's own expert: "European Tile Inc. was subject to foreclosure and ceased operations in 2010. It had no assets and was administratively dissolved in 2013. That same year, Ellis filed for bankruptcy and was discharged by U.S. Bankruptcy Court for the Middle District of Florida." (Samore Rpt. Doc. # 57-5 at 50). From the record before the Court, it does not appear Ellis has anything to gain from his testimony. If Ellis's testimony advances any entity's purposes, it is Dalzell, Inc., the company that brought about Ellis's complete financial demise. Thus, it is hard to follow Zurich's argument that Ellis's testimony is "self-serving."
And, even if Ellis's testimony is somehow "self-serving," it is better to let a jury consider the disputed evidence and make a finding of fact, rather than to simply discredit one party's side of the story because it is not sufficiently "corroborated." Zurich contends: "no reasonable jury could find in Dalzell's favor that notice was provided by European to Zurich prior to February 2016, when Dalzell sued Zurich seeking to collect the underlying judgment." (Doc. # 70 at 13). The Court disagrees. Instead of usurping the role of the jury, the Court determines that the fact-finders should resolve the factual conflict presented. Although Zurich contests Ellis's testimony, Zurich has not shown that overwhelming direct evidence contradicts that testimony. Nor has Zurich demonstrated that Ellis's testimony is fantastical, speculative, or internally inconsistent such that it is totally lacking in probative value.
The Court "must view all the evidence and all factual inferences reasonably drawn from the evidence in the light most favorable to the nonmoving party, and must resolve all reasonable doubts about the facts in favor of the non-movant."
"[T]he court may not weigh conflicting evidence to resolve disputed factual issues; if a genuine dispute is found, summary judgment must be denied."
Zurich also asserts that Ellis had a duty to cooperate with Zurich in an attempt to challenge the multimillion dollar judgment years after entry of that judgment. And that Ellis's failure to cooperate prevents the provision of insurance coverage. Zurich correctly explains that under governing Florida law, an insurer may deny coverage based on the insured's failure to cooperate.
There are multiple unresolved factual issues that a jury must address before any analysis of these factors may begin. For instance, if the jury credits Ellis's testimony, how can Zurich show that it acted in good faith with the terms of the policy? Likewise, if the jury determines that Ellis provided timely oral notice of Dalzell's suit, how can Zurich now claim any prejudice? The Court cannot decide the cooperation issues presented in the Motion for Summary Judgment because the factual dispute regarding whether Ellis actually provided oral notice of the suit to Zurich in a timely manner, as elaborated upon above, is unresolved. The Court accordingly denies the Motion for Summary Judgment to the extent it is based on the insureds' alleged failure to cooperate.
Accordingly, it is
Plaintiff Zurich American Insurance Company's Motion for Summary Judgment (Doc. # 57) is