GREGORY A. PRESNELL, District Judge.
This matter came before the Court without oral argument upon consideration of cross-motions for partial summary judgment filed by Plaintiff-Counterdefendant Mid-Continent Causality Company ("Mid-Continent") (Doc. 30) and Defendant-Counterclaimant CED Construction Partners, Ltd. ("CED") (Doc. 35); the parties' respective responses in opposition thereto (Docs. 39 and 40); and the parties' replies (Docs. 40 and 42).
Mid-Continent brought this action for declaratory relief to determine whether it has a duty to defend and indemnify its insured, Frank Casserino Construction, Inc. ("Casserino"), in two underlying state court actions brought by CED against Casserino.
In its motion, Mid-Continent contends that it has no duty to indemnify Casserino.
The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332.
The underlying litigation between CED and Casserino involves two residential building projects: the Water View Club apartment building in Orange County, Florida, and the Tierra Vista apartment building in Osceola County, Florida. In both projects, CED, as the general contractor, subcontracted with Casserino to perform building wrap, vinyl siding, roofing and certain accessories work. The Water View buildings were completed in July, 1998, and the Tierra Vista buildings were completed in December, 1998.
In later part of 2004, CED was notified by the owner of possible water intrusion in
On March 22, 2006, CED sued Casserino and other subcontractors in two separate state court actions, alleging, inter alia, that the water intrusion in the buildings was caused by Casserino's construction defects.
Mid-Continent issued four CGL polices to Casserino. Each policy was in effect for a year, and between August 30, 1998 through August 30, 2002 (the last effective date of the final policy), there were no lapses in coverage. The policies contained identical language and, in pertinent part, provided coverage for:
(Doc. 30-8 at 1).
The policies contained the following exclusions:
(Doc. 30-8 at 1-4).
Finally, the policies contained the following definitions:
(Doc. 30-8 at 11-13).
A party is entitled to summary judgment when it can show that there is no genuine issue as to any material fact. FED. R. CIV. P. 56(c); Beal v. Paramount Pictures Corp., 20 F.3d 454, 458 (11th Cir. 1994). Which facts are material depends on the substantive law applicable to the case. Anderson v. Liberty Lobby, Inc.,
When a party moving for summary judgment points out an absence of evidence on a dispositive issue for which the non-moving party bears the burden of proof at trial, the non-moving party must "go beyond the pleadings and by [its] own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Celotex Corp., 477 U.S. at 324-25, 106 S.Ct. 2548 (internal quotations and citations omitted). Thereafter, summary judgment is mandated against the non-moving party who fails to make a showing sufficient to establish a genuine issue of fact for trial. Id. at 322, 324-25, 106 S.Ct. 2548; Watson, 252 F.Supp.2d at 1352. The party opposing a motion for summary judgment must rely on more than conclusory statements or allegations unsupported by facts. Evers v. Gen. Motors Corp., 770 F.2d 984, 986 (11th Cir.1985) ("conclusory allegations without specific supporting facts have no probative value") (citations omitted); Broadway v. City of Montgomery, Ala., 530 F.2d 657, 660 (5th Cir.1976).
In determining whether the moving party has satisfied its burden, the Court considers all inferences drawn from the underlying facts in a light most favorable to the party opposing the motion, and resolves all reasonable doubts against the moving party. Anderson, 477 U.S. at 255, 106 S.Ct. 2505. The Court is not, however, required to accept all of the nonmovant's factual characterizations and legal arguments. Beal, 20 F.3d at 458-59.
In Florida, an insurer's duty to defend is distinct from, and broader than, the duty to indemnify. Lime Tree Vill. Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993) (citing Baron Oil Co. v. Nationwide Mut. Fire Ins. Co., 470 So.2d 810, 813-14 (Fla. 1st DCA 1985)). The duty to defend is determined by examining the allegations in the underlying complaint against the insured. Id. (citing Nat'l Union Fire Ins. Co. v. Lenox Liquors, Inc., 358 So.2d 533, 536 (Fla.1977)); see also State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1077 n. 3 (Fla.1998). The insurer must defend when the complaint alleges facts that fairly and potentially bring the suit within coverage. Jones v. Fla. Ins. Guar. Ass'n, Inc., 908 So.2d 435, 442-43 (Fla.2005).
An insurer's duty to indemnify is narrower than its duty to defend and must be determined by analyzing the policy coverages in light of the actual facts in the underlying case. See, e.g., CTC Dev. Corp., 720 So.2d at 1077 n. 3 (citing Hagen v. Aetna Cas. & Sur. Co., 675 So.2d 963, 965 (Fla. 5th DCA 1996)). In construing insurance policies, courts should read the policy as a whole, endeavoring to give every provision its full meaning and operative effect. U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979 So.2d 871, 877 (Fla.2007) (internal citations omitted). Exclusionary clauses are typically read strictly and in a manner that affords the insured the broadest possible coverage. Indian Harbor Ins. Co. v. Williams, 998 So.2d 677, 678 (Fla. 4th DCA 2009).
In Florida, the insured has the burden of proving that a claim is covered by the insurance policy. LaFarge Corp. v. Travelers Indem. Co., 118 F.3d 1511, 1516
Although the parties agree that there has been an "occurrence" caused by "property damage" within the meaning of the CGL policies, they dispute the nature of that "property damage" and when it occurred.
Mid-Continent contends that the damage to the buildings caused by water intrusion constitutes the "property damage" at issue in this case. CED, however, contends that Casserino's faulty workmanship, in itself, also constitutes "property damage." (Doc. 35 at 1 and 4).
CED's contention is flawed for at least two reasons. First, assuming Casserino's workmanship constitutes "property damage," then the damage occurred (and would have continued to occur) as of the date the buildings were completed. As noted, supra, the Water View buildings were completed sometime in July, 1998— at least a month before Mid-Continent issued its first CGL policy to Casserino. Second, and more importantly, Casserino's faulty workmanship—standing alone—is specifically excluded from coverage.
Upon review, the Court finds that the "property damage" at issue here concerns the physical damage to the buildings caused by water intrusion—not Casserino's allegedly defective workmanship in itself. Accord Auto Owners Inc. Co. v. Tripp Constr., Inc., 737 So.2d 600, 601 (Fla. 3d DCA 1999) (CGL policies "only protect against . . . damages . . . to property which might result from the defective workmanship. The policy does not afford coverage for the repair of the defective workmanship itself") (emphasis added); see also LaMarche v. Shelby Mutual Ins. Co., 390 So.2d 325, 326 (Fla.1980); but see J.S.U.B., Inc. v. U.S. Fire Ins. Co., 906 So.2d 303 (Fla. 2d DCA 2005), aff'd 979 So.2d 871, 891 (Fla.2007) (noting, however, that "we distinguish but do not recede from LaMarche because that case concluded, based on the policy exclusions, that there was no coverage"). Accordingly, although Casserino's allegedly defective workmanship may have caused water intrusion (and the resulting "property damage" to the buildings), its workmanship alone does not constitute "property damage" under the CGL policies.
For there to be coverage under a CGL policy, there must be a covered loss that occurs within the policy period. Although
There are four theories governing when "property damage" occurs under a CGL policy: (1) exposure; (2) manifestation; (3) continuous trigger; and (4) injury-in-fact. Auto Owners Ins. Co., 227 F.Supp.2d at 1266.
Id. (internal citations omitted and emphasis removed).
In Florida, however, coverage under a CGL policy is triggered when property damage manifests itself, not when the negligent act or omission giving rise to the damage occurs. See, e.g., Assurance Co. of Am. v. Lucas Waterproofing Co., Inc., 581 F.Supp.2d 1201, 1206 (S.D.Fla.2008); Essex Builders Group, Inc. v. Amerisure Ins. Co., 485 F.Supp.2d 1302, 1309-10 (M.D.Fla.2006); North River Ins. Co. v. Broward County Sheriff's Office, 428 F.Supp.2d 1284, 1289 (S.D.Fla.2006); Auto Owners Ins. Co., 227 F.Supp.2d at 1266; Am. Motorists Ins. Co. v. Southern Sec. Life Ins. Co., 80 F.Supp.2d 1280, 1284 (M.D.Ala.2000) (applying Florida law); Harris Speciality Chems., Inc. v. U.S. Fire Ins. Co., Case No. 3:98-CV-351, 2000 WL 34533982 at *12 (M.D.Fla.2000); Travelers Ins. Co. v. C.J. Gayfer's & Co., 366 So.2d 1199 (Fla. 1st DCA 1979) (citing, inter alia, Prieto v. Reserve Ins. Co., 340 So.2d 1282 (Fla. 3d DCA 1977)); 31 FLA. JUR.2D INSURANCE § 2451 (2d ed., current through Feb. 2010); but see Trizec Properties, Inc., 767 F.2d at 813, n.6 (11th Cir.1985) (rejecting manifestation theory in context of duty to defend, but noting that "We need not and do not decide whether [the insurer's] theory . . . that damages must manifest themselves . . . before coverage is triggered . . . is a correct or incorrect statement of the law in general"); Commercial Union Ins. Co. v. R.H. Barto Co., 440 So.2d 383 (Fla. 4th DCA 1983) (applying continuous trigger theory); see also 7 COUCH ON INSURANCE § 102:21 (3d. ed., current through 2009) (discussing competing theories and noting that "determining whether the triggering event has occurred during the policy period is not always a simple matter").
Here, then, CED has the burden of proving that "property damage" manifested prior to August 30, 2002. Consistent with that burden, CED has produced photographic evidence that reveals "property damage" caused by water intrusion in both the Water View and Tierra Vista buildings, (Doc. 36-2 at 33-45 and Doc. 36-3 at 35-60), and its expert has opined that damage from the water intrusion would have been visible at about the time of the first measurable rains after the completion of construction.
Mid-Continent, however, contends that CED's expert has no personal knowledge as to whether any damage from water intrusion was manifested during the policy period and that the damage was not "seen in fact" or "discovered" during the policy period. (Doc. 41 at 2-3, n. 3). "Therefore,
Upon review, Mid-Continent's motion will be denied. That no one saw or "discovered" damage caused by water intrusion during the policy period is of no moment. Under Florida's applicable "trigger" theory and the unambiguous language of the CGL policies at issue here, the only relevant question is whether physical injury to the buildings manifested itself during the period of coverage. CED's expert has opined that it did and there is sufficient—though perhaps disputable—evidence in the record to support that opinion. While Mid-Continent is free to attack CED's expert, Mid-Continent cannot simply label his conclusion an "opinion" and ignore his findings
Notwithstanding the foregoing, CED's motion will also be denied. CED requests the following relief in its motion:
(Doc. 35 at 1-2) (emphasis added). The relief CED requests is entirely speculative and based on an incomplete record. The underlying state court actions remain pending and no judgment has been entered on the claims against Casserino. Furthermore, as noted in Part IV, A, supra, Casserino's faulty workmanship, as a matter of law, cannot itself constitute an "occurrence" under the CGL policies. Finally, although the opinion of CED's expert supports (but by no means clearly establishes) that water intrusion caused "property damage" during the period of coverage, CED has not adduced sufficient evidence that Casserino's faulty workmanship was the cause of water intrusion or, more particularly, the "property damage" caused by the water intrusion at issue in the state court actions.
For the foregoing reasons, it is
