ORDER

RICHARD A. LAZZARA, District Judge.

Before the Court is Max Specialty Insurance Company's Amended Motion for Summary Judgment as to Eye in the Sky Pictures, Inc. (Dkt. 84), the Memorandum in Opposition (Dkt. 86), and the Reply. (Dkt. 89). After careful consideration of the motion, the applicable law, and the entire file, the Court concludes the motion should be granted.

BACKGROUND

Plaintiff Max Specialty Insurance Company (Max Specialty) issued a "Title Agents, Abstractors and Escrow Agents Professional Liability Insurance Policy" to A Clear Title and Escrow Exchange LLC (Clear Title) for the policy period August 20, 2010, to August 20, 2011. In May 2010, Keith Brown was employed by Clear Title as an escrow agent; however, on the application for insurance that was executed on July 26, 2010, Mr. Brown is not listed as an employee. The three employees listed included Stephen J. Cormier, as an escrow agent, and two other individuals.

There is no wrongdoing alleged against Mr. Brown; however, Mr. Cormier, the sole owner and manager of Clear Title, fraudulently disbursed funds from escrow accounts as the sole signatory to unauthorized recipients and created fraudulent reports to investors regarding the balances on deposit in the escrow accounts during the policy period. Multiple probable cause affidavits were filed by state detectives for the grand theft of money from the escrow accounts.1 One of the escrow accounts was opened at Fifth Third Bank in Venice, Florida, in May 2010. Mr. Cormier was eventually charged in the Middle District of Florida on one count of conspiracy to commit wire fraud, resulting from his defalcation of monies held in escrow.2 Mr. Cormier pleaded guilty on March 6, 2013, as charged and admitted to fraudulently disbursing $4.7 million from the Fifth Third escrow account including money on deposit from "T.S. from Germany" which is also known as Eye in the Sky Pictures, Inc. (Eye in the Sky).3

In this action, Max Specialty seeks declaratory relief and rescission of the policy. The rescission count is based on the allegations that Clear Title failed to disclose Mr. Brown's professional employment and, had it done so, Max Specialty would not have issued the policy on the same terms for the same premium. Consequently, Max Specialty seeks a declaration in count I that the policy is void and rescinded because Clear Title made material misrepresentations in failing to disclose Mr. Brown as an employee. The present motion for summary judgment does not seek relief on the rescission count.

In three additional counts, Max Specialty addresses the claims of individuals and entities that deposited money in the escrow accounts. The Amended Complaint alleges that monies held in escrow for several transactions were stolen by Mr. Cormier, resulting in a state court indictment for grand larceny. Max Specialty seeks declarations that the claims of the entities and individuals who placed money in the escrow account are excluded from coverage pursuant to the criminal acts exclusion of the policy. Eye in the Sky is not specifically mentioned in any of the counts, although it is listed as a Defendant and presumably has asserted a claim against Clear Title.

Eye in the Sky filed a cross-claim against Clear Title for breach of contract and negligence in this action.4 According to the allegations in the cross-claim, on April 29, 2011, Eye in the Sky entered into an escrow agreement with Triton in which Clear Title served as escrow agent for a $200,000 deposit. The $200,000 held in an account at Fifth Third Bank was to be returned to Eye in the Sky if Triton did not issue a standby letter of credit. When Triton did not issue the letter of credit, Eye in the Sky demanded the return of the money held in escrow to no avail. Eye in the Sky obtained a clerk's default against Clear Title.5 Max Specialty requests in this motion for summary judgment that this Court declare that no coverage exists under the policy for the damages suffered by Eye in the Sky.

THE PROFESSIONAL LIABILITY POLICY

The policy provides coverage for the professional liability of title agents, abstractors and escrow agents.6 The policy insures claims made by reason of a wrongful act in the performance of or failure to perform professional services by the insured.7 A wrongful act is defined as an actual or alleged "act, error, omission, misstatement, misleading statement, neglect or breach of duty" in the performance of professional services.8 Professional services include services performed for others for a fee in the capacity as an escrow or closing agent.9 Section III of the policy provides for exclusions and excludes in pertinent part:

An "Insured" is defined in pertinent part as follows:

SUMMARY JUDGMENT STANDARD

Summary judgment is properly granted where there is no genuine dispute regarding a material fact. Fed.R.Civ.P. 56(a). A summary judgment is an appropriate vehicle for interpretation of an insurance contract as a question of law. See, e.g., Technical Coating Applicators, Inc. v. U.S. Fidelity Guar., Co., 157 F.3d 843 (11th Cir.1998); Talat Enters., Inc. v. Aetna Life & Cas., 952 F.Supp. 773, 776 (M.D.Fla.1996). The policy, however, must contain clear and unambiguous wording to resolve the issue as a matter of law. Talat, 952 F.Supp. at 776.

ANALYSIS

Eye in the Sky argues that Max Specialty waived its coverage defenses and comes to this Court with unclean hands by failing to defend Clear Title in accordance with the clear language of the policy. For the following reasons, the Court finds the criminal acts exclusion operates to deny coverage.

The policy contains a criminal and fraudulent acts exclusion provision, precluding coverage for claims arising out of13 any "criminal, fraudulent or dishonest act."14 The provision continues, however, to require Max Specialty to defend "such allegations" against the insured until "final adjudication" if the claim is "otherwise covered" under the policy. An insured under the policy is defined as the named insured as well as any present principal of the named insured, which would include Mr. Cormier as the sole owner of Clear Title, the named insured, as long as the principal is performing professional services on behalf of the named insured.

Mr. Cormier committed a crime when he took money from the escrow account while serving as the escrow agent pursuant to the escrow agreement. See docket 84, Exh. A. He has pleaded guilty, and clearly, the claim for failure to return the escrow funds arose out of a criminal act. The issue of whether Max Specialty owed a duty to defend Mr. Cormier, however, is not before this Court. The issue raised by Eye in the Sky is whether Max Specialty owed a duty to defend Clear Title as an insured, based on the language of the exclusion regarding Max Specialty's duty to defend if allegations of criminal acts were made and the claim is "otherwise covered" by the policy.

The only underlying claim before this Court to review to ascertain whether any negligent acts are alleged is found in the cross-claim filed by Eye in the Sky against Clear Title. The cross-claim alleges that Clear Title's negligence in failing to return escrow funds under the escrow agreement constitutes breach of the escrow agreement and negligence. The cross-claim does not allege the criminal acts of Mr. Cormier, but alleges only negligence in the failure of Clear Title to return escrow funds. Eye in the Sky contends that Max Specialty had a duty to defend Clear Title, as opposed to Mr. Cormier, pursuant to the last sentence in Section III, f.(4) of the policy. Had Max Specialty defended Clear Title in the various claims made by individuals and entities for the return of escrow funds deposited pursuant to escrow agreements with Clear Title, then defaults would not have been entered.15

Max Specialty contends that the criminal acts exclusion applies to Clear Title, even though Clear Title is not guilty of a crime. Max Specialty further asserts that Clear Title never sought coverage under the policy. The Court finds that at this juncture of the proceedings, Mr. Cormier has pleaded guilty and awaits sentencing. Although the cross-claim alleges negligence in the failure to return the escrow funds, which would be "otherwise covered" under the policy, the "allegations" of the criminal act have been determined in criminal court. The written plea agreement contains the factual basis which includes the claim alleged in the cross-claim, thereby establishing that the claim arose out of a criminal act, which happened to be committed by the principal of Clear Title. The policy does not make an exception for crimes committed by principals as opposed to crimes committed by the entity which that principal represents. The exclusion places a duty to defend on Max Specialty for the "insured" which includes both Mr. Cormier and Clear Title. Nevertheless, at this stage of the proceedings, it cannot be disputed that an insured committed a criminal act from which the claim originated.

Furthermore, Eye in the Sky's argument that Max Specialty waived its coverage defense with respect to the criminal acts exclusion is without merit. Section 627.426(2) of the Florida Claims Administrative Statute does not apply to a defense of no coverage. See Mid-Continent Cas. Co. v. Basdeo, 742 F.Supp.2d 1293, 1331-32 (S.D.Fla.2010), aff'd. 477 Fed.Appx. 702 (11th Cir.2012); Hannover Ins. Co. v. Dolly Trans Freight, Inc., No. 6:05-cv-576-Orl-19DAB, 2006 WL 1169496, at *5 (M.D.Fla. May 2, 2006) (citing Almendral v. Security Nat'l Ins. Co., 704 So.2d 728, 730 (Fla.Dist.Ct.App.1998)). Section 627.426(2) does not create coverage "where a particular claim is expressly excluded from coverage." AIU Ins. Co. v. Block Marina Invest., Inc., 544 So.2d 998, 999-1000 (Fla.1989) (citing Country Manors Ass'n v. Master Antenna Systems, Inc., 534 So.2d 1187 (Fla.Dist.Ct.App. 1988)). To assert a "coverage defense," coverage must otherwise exist, i.e., it must exist in the first place. Country Manors, 534 So.2d at 1195.16 Because Max Specialty relies solely on the criminal acts exclusion to the policy to deny coverage, section 627.426(2) is inapplicable.

With respect to the equitable arguments asserted by Eye in the Sky concerning Max Specialty's failure to defend Clear Title,17 no authority has been cited that this failure now requires a finding of coverage. The unambiguous terms of the policy preclude coverage under the criminal acts exclusion for any claim arising out of the criminal acts of misappropriating the escrow funds. No genuine issue of fact exists with respect to the criminal act. While it seems grossly unfair that Clear Title agreed to perform its duties as escrow agent and its principal essentially stole the money, the policy excludes coverage on this basis.18

It is therefore ORDERED AND ADJUDGED that Max Specialty Insurance Company's Amended Motion for Summary Judgment as to Eye in the Sky Pictures, Inc. (Dkt. 84) is GRANTED.