KENNETH A. MARRA, District Judge.
THIS CAUSE is before the Court upon Plaintiff Amerisure Insurance Company's Motion for Summary Judgment as to its Complaint for Declaratory Judgment and Epoch's Counterclaim for Declaratory Judgment for Coverage [DE 41], and Defendant Epoch Properties, Inc.'s Dispositive Motion for Summary Judgment and Motion for Stay [DE 50]. The motions are fully briefed and ripe for review. The Court has reviewed all the motion papers and exhibits, the entire file in this case, and is otherwise duly advised in the premises.
Epoch Properties, Inc. ("Epoch") was the General Contractor on a project called
Jose Tejeda, who was working as a laborer for Sandi at the site, sustained injuries from a fall which led to his death [DE 42, 3 ¶ 20, DE 49, 4 ¶ 8]. An action seeking damages arising out of this incident was commenced against Epoch, CL & B and Sandi by the Representative of Mr. Tejeda's estate in the Circuit Court of the 15th Judicial Circuit in and for Palm Beach County under Case No. 50 2008 CA 006953 ("underlying action") [DE 42, 2 ¶ 9, ¶ 12, DE 49, 5 ¶ 9]. Orange & Blue was not named as a defendant in the underlying action [DE 42-2].
The Fourth Amended Complaint in the underlying action contains two Counts against Epoch. Id. The first, for negligence, alleges that Epoch breached its duty to provide and maintain a reasonably safe workplace. Id. at ¶ 31. The heading of the second count is named "Against Epoch for Intentional Tort" and alleges that Epoch acted in a manner which was virtually certain to cause serious injury or death. Id. at ¶ 40.
Epoch's contract with the owner of the property gave it ultimate responsibility for safety at the job site [DE 42-3 24-5]; however, in Epoch's Subcontract Agreement with Orange & Blue, the risk of potential injuries on the job site was re-allocated by these parties to Orange & Blue to the extent that such injuries might arise out of Orange & Blue's portion of the overall project. Orange & Blue assumed responsibility for supervision and safety matters [DE 42-3, 7, ¶ 8, 11, ¶ 17], and was required to report any unsafe conditions to Epoch [DE 42-3, 11, ¶ 16(b) ].
The subcontract required Orange & Blue to purchase Commercial General Liability Insurance covering, in relevant part, personal injury and bodily injury (including wrongful death) and required that Epoch be named as an additional insured on this policy [DE 42-3, 10, ¶ 15(a)(ii) and (d) ]. In compliance with this requirement, Epoch became an additional insured on Orange & Blue's policy with Amerisure [DE 42-1]. As an additional insured, Epoch tendered its defense in the underlying action to Amerisure [DE 42, 4, ¶ 21], and Amerisure agreed to provide Epoch with a defense subject to a full reservation of its rights [DE 42, 4, ¶ 22, DE 42-4, DE 42-5].
Amerisure's Commercial General Liability policy GL 2009112020005 [DE 42-1] provides in relevant part:
[DE 42-1, 7].
The following exclusions in the policy are at issue in this case:
This insurance does not apply to:
This exclusion applies:
[DE 42-1, 8].
[DE 42-1, 19, ¶ 3].
[DE 42-1, 20, ¶ 13].
[DE 42-1, 29].
[DE 42-1, 19, ¶ 5].
The Contractor's Blanket Additional Insured Endorsement, CG 70 48 03 04, states, in relevant part:
The insurance provided to the additional insured is limited as follows:
[DE 42-1, 57].
Amerisure asserted in its Complaint: "Pursuant to the CG 7048 0304 Contractors Blanket Additional Insured Endorsement contained in the POLICY, EPOCH is considered an `additional insured'." [DE 1, 5, ¶ 27].
Amerisure seeks summary judgment in this declaratory judgment action holding that Amerisure has no duty to defend or indemnify Epoch for the claims and damages alleged against it in the underlying action [DE 41, 18]. Amerisure argues that the claim against Epoch for intentional tort is not a covered "occurrence" under the policy [DE 41, 5]. Amerisure also contends that Exclusion 2.b. supra bars coverage because Epoch is being sued for its own acts and omissions in the underlying action and not for the vicarious tort liability of Amerisure's named insured, Orange & Blue [DE 41, 8-11]. Amerisure also relies upon Exclusions 2.d. and 2.e., arguing that Epoch was a "statutory employer" of Jose Tejeda under Florida's Workers Compensation Act, and, as such, these exclusions bar coverage under the policy [DE 41, 11-15].
Epoch seeks partial summary judgment as to its counterclaim for declaratory judgment holding that Amerisure has a duty to defend it in the underlying action, arguing that although Amerisure may not be obliged to defend the intentional tort claim, it must defend the entire case due to the negligence claim [DE 49, 7-9]. Epoch further asserts that the claim in the underlying action for intentional tort is ambiguous and, therefore, Amerisure has a duty to defend that claim as well [DE 49, 9-10].
Epoch posits that its contract with Orange & Blue is an "insured contract" under the policy, and it is being sued for Orange & Blue's acts and omissions [DE 49, 10-13]. Epoch looks to the Additional Insured Endorsement to support its position [DE 13-17].
As to the issue of Amerisure's obligation to indemnify it, Epoch argues that it is premature to make this determination [DE 19-20] and requests the Court to stay this portion of the action until the issue of whether Epoch was a statutory employer of Jose Tejeda is determined in the underlying action [DE 49, 17-19]. In the alternative, should the Court consider whether Mr. Tejeda is Epoch's "employee" or "statutory employee", Epoch contends that there is no basis for denying coverage under the Employer's Liability or Workers' Compensation exclusions.
The Court may grant summary judgment "if the movant shows that there is no
There is no dispute among the parties that Florida law applies to this insurance coverage case, which is before the Court pursuant to 28 U.S.C. § 1332 based upon the diversity of citizenship of the parties. Under Florida's lex loci contractus test, the Court agrees that Florida law applies. See, e.g., LaFarge Corp. v. Travelers Indemnity, 118 F.3d 1511 (11th Cir.1997); Nova Cas. Co. v. Waserstein, 424 F.Supp.2d 1325 (S.D.Fla.2006); Lumbermen's Mut. Cas. Co. v. August, 530 So.2d 293 (Fla.1988). Florida law applicable to insurance coverage disputes provides that
Lawyers Title Ins. Corp., 52 F.3d at 1580-81 (citations omitted).
Amerisure contends that Count II of the Fourth Amended Complaint in the underlying action, which is described as "Against Epoch for Intentional Tort" [DE 42-2, 8-11], is not an "occurrence" under the policy [DE 41, 5-6]. It further contends that Count II is excluded from coverage under Exclusion 2.a., the "expected or intended injury" exclusion [DE 41, 6-8].
Inasmuch as Count I of the Fourth Amended Complaint sounds in negligence, which is a covered "occurrence" [DE 42-1, 20, ¶ 13, DE 42-1, 7], the Court finds it unnecessary to address Amerisure's position regarding Count II, as well as Epoch's arguments relative thereto. It is clear under Florida law that "[i]f the complaint alleges facts partially within and partially outside the coverage of the policy, the insurer is obligated to defend the entire suit." IDC Construction, LLC v. Admiral Ins. Co., 339 F.Supp.2d 1342, 1349 (S.D.Fla.2004), citing Grissom v. Commercial Union Ins. Co., 610 So.2d 1299, 1306-07 (Fla. 1st DCA 1992). Therefore, given that Amerisure has a duty to defend Epoch as to the allegations of negligence in the underlying action, barring an exclusion that negates Amerisure's obligation to defend Epoch regarding the negligence claim, Amerisure would have to defend Epoch as to the entire Fourth Amended Complaint.
Amerisure next contends that Exclusion 2.b. of the policy bars coverage for Epoch
. . . .
[DE 42-1, 8].
[DE 42-1, 29].
Amerisure argues that this exclusion bars coverage since Epoch is being sued for its own acts and omissions in the underlying action, and not vicariously for the tort liability of Amerisure's insured, Orange & Blue. Amerisure relies upon United Rentals, Inc. v. Mid-Continent Cas. Co., 843 F.Supp.2d 1309 (S.D.Fla. 2012) and this Court's decision in Mid-Continent Cas. Co. v. Const. Servs. & Consultants, Inc., No. 06-CV-80922, 2008 WL 896221 (S.D.Fla. Mar. 31, 2008).
In both of these cases, as in the instant case, the allegations against the additional insured were based upon its own actions and omissions, and not upon the actions and omissions of the primary insured. Based upon the particular facts of those cases, and the specific language of the policies at issue in those two cases, summary judgment was granted to the insurer. The facts of the instant case, and the particular language of the policy at issue herein, however, are different from these cases in significant ways that render these two cases inapposite.
Under the policy in Mid-Continent, in order for a company to be an additional insured, the liability at issue had to be "directly attributable" to the primary insured's performance of its work for the putative additional insured. Since the allegations against the putative additional insured were for its own negligence, and not for the acts and omissions of the primary insured, this Court held that there was no coverage. Id. Furthermore, the additional insured amendment only applied when the primary insured had agreed by a written "insured contract" to designate the other company as an additional insured. Id. Therefore, in Mid-Continent, the existence of an "insured contract" was a condition precedent to attaining additional insured status.
In United Rentals, Inc., 843 F.Supp.2d 1309 (S.D.Fla.2012), the primary policy had an additional insured clause that was similar to that in Mid-Continent. Id. at 1312 n. 5. In defining an "insured contract", the language required that the injury be "caused, in whole or in part" by the primary insured or those acting on its behalf. Id. at 1312 n. 6. The excess policy in United Rentals, Inc. included as an insured, "[a]ny person or organization for whom you have agreed in writing prior to any occurrence or offense to provide insurance such as is afforded by this policy, but only with respect to operations performed
Here, the Amerisure policy provides that a company "is only an additional insured with respect to liability arising out of: ... [the primary insured's] ongoing operations performed for that additional insured ...." [DE 42-1, 57]. The Amerisure policy does not require that there be an "insured contract" for a company to be an additional insured.
It has been held that where, as here, a policy uses the phrase "liability arising out of the operations" of a named insured, it is not necessary for the named insured's acts to have "caused" the accident. It is sufficient if the injured person was present at the scene of the accident in connection with performing the named insured's business, even if the cause of the injury was the negligence of the additional insured. See, e.g., Mid-Continent Cas. Co. v. Swift Energy Co., 206 F.3d 487 (5th Cir.2000). In Container Corp. of America v. Maryland Cas. Co., 707 So.2d 733 (Fla.1998), the Florida Supreme Court marshaled cases from other jurisdictions discussing additional insured language similar to the language in the Amerisure policy at issue here, and concluded that in the absence of clear policy language limiting coverage to vicarious liability, the additional insured was entitled to coverage for its own negligence. Id. at 736.
All allegations in the Fourth Amended Complaint in the underlying action refer to the job site of the Porto Fino Apartments [DE 42-2]. Amerisure, in its Statement of Undisputed Facts in Support of its Motion for Summary Judgment ("Statement of Undisputed Facts"), [DE 42], states:
Given these undisputed facts, Amerisure cannot contend that the liability at issue in this case did not arise out of the operations of its insured, Orange & Blue, and it does not so contend. In fact, Amerisure conceded in its Complaint that Epoch was an additional insured under the Orange & Blue policy [DE 1, 5, ¶ 27].
Having found that Epoch was an additional insured under the Orange & Blue policy with Amerisure does not end our inquiry. It still must be determined whether any of the policy exclusions apply.
The Contractual Liability Exclusion in 2.b. does not apply here for several reasons. First, the Subcontract Agreement between Epoch and Orange & Blue contains no provisions under which Orange & Blue assumes Epoch's liability. The indemnity provision in the Agreement states that the only indemnified parties are the "Owner, all subsidiary or affiliated companies of Owner, and all employees, stockholders, officers, partners and directors or
The Court rejects Epoch's request that it stay its evaluation of Epoch's status as a "statutory employer" pending resolution of the underlying action [DE 49, 17-19]. Epoch argues that whether or not Tejeda would be properly considered a "statutory employee" is a disputed question of fact in the underlying action. Id. at 17. Epoch states that its request for a determination of Mr. Tejeda's status has twice been rejected by the Palm Beach Circuit Court. Id. at 22. Epoch directs the Court's attention to an attached Order from the Palm Beach Circuit Court. All this Order says, however, is that Epoch's Motion for Summary Judgment is denied "for reasons stated on the record." [DE 49-2]. The record was not supplied to this Court, although Epoch could have easily done so.
Amerisure, in its reply papers, disagrees with Epoch's description of what occurred relative to the Palm Beach Circuit Court's decision on Epoch's Motion for Summary Judgment, noting: "The state court judge found that there was a factual issue as to whether Tejeda's claim would be barred based upon worker's compensation immunity. However, there was no factual dispute that Tejeda was an employee of Sandi and a `statutory employee' of Epoch." [DE 58, 8]. Amerisure also did not provide this Court with any of the papers from the underlying action discussing this issue.
Epoch points to a related case in this court, Commerce & Industry Ins. Co. v. Sandi Construction, Inc., 2011 WL 4738155 (S.D.Fla.), in support of its position that this Court should not rule on this issue. Commerce & Industry Ins. Co. was a declaratory judgment action against all the same defendants in the instant case. At issue was whether both parts of a Workers' Compensation and Employer's Liability Insurance Policy were covered by a Florida Workers' Compensation statute or whether a Florida statute permitting an insurer to deny recovery and void a policy if the insured procures the policy based upon fraudulent statements applied to the Employer's Liability portion of the policy.
Although completely unrelated to this issue, Epoch asked the court in Commerce & Industry Ins. Co. for "an affirmative determination and declaration ... that Mr. Tejeda was an employee and therefore a beneficiary of the statutory scheme of workers' compensation ...". Id. at *5. The Court declined to do so, because "Defendant Tejeda's rights and her deceased husband's status under Florida's worker's compensation law
In the instant case, whether or not Epoch was a "statutory employer" of Mr. Tejeda is not only before this Court, but, as noted below, is determinative of the coverage issue. This Court's decision to rule on this issue is not, therefore, inconsistent with the court's ruling in Commerce & Industry Ins. Co.
Epoch requests the stay from this Court to prevent the possibility of having this Court and the State Court enter inconsistent rulings [DE 49, 18]. There is actually a greater chance that inconsistent rulings will result if this Court does not rule on the issue at this time. All of the parties in the underlying action are named defendants herein. Plaintiff in the underlying action answered the complaint
Conversely, if this Court stays its decision on this issue; Epoch is found not to be a "statutory employer" in the underlying action; and it is determined that Epoch's and Amerisure's interests were antagonistic in the underlying action; Amerisure would not be collaterally estopped before this Court from re-litigating the issue of whether Epoch is a "statutory employer". See State Farm Mutual Automobile Ins. Co. v. Brown, 767 F.Supp. 1151 (S.D.Fla.1991) (Insurer in a declaratory judgment action in Federal Court was not collaterally estopped from challenging a State Court Judge's findings of fact in an underlying action where the insurer and the insured had antagonistic interests in the State Court case).
Amerisure has a right to have this Court rule on the matter before it. Otherwise, Amerisure will have to incur the expense of defending the underlying action when it is clear, as noted below, that based upon the plain meaning of the policy and the relevant case law, it has no obligation to do so.
Amerisure contends that Exclusions 2.d. and 2.e. bar coverage for Epoch in the underlying action [DE 41, 11-15]. Section 2.d. excludes from coverage:
[DE 42-1, 8]. Section 2.e. excludes from coverage:
This exclusion applies:
This exclusion does not apply to liability assumed by the insured under an "insured contract".
The policy also contains the following relevant definition:
[DE 42-1, 19, ¶ 5].
Amerisure contends that the undisputed facts demonstrate that, pursuant to Section 440.10(1)(b) of the Florida Worker's Compensation Act, Epoch was the "statutory employer" of the Plaintiff in the underlying action and, therefore, both Exclusions 2.d. and 2.e apply. Section 440.10(1)(b) provides:
Both parties' statements of undisputed facts document that Epoch entered into a subcontract with Orange & Blue, which entered into a further subcontract with CL & B, which entered into a further subcontract with Sandi, and Plaintiff in the underlying case was injured while performing this subcontracted work for Sandi [DE 42, 3, ¶ 16, DE 49, 2-4, ¶¶ 1, 7, 8]. Based upon these undisputed facts, and the application of Section 440.10(1)(b) to these facts, the Court concludes that Plaintiff in the underlying case was a statutory employee of Epoch. As such, Exclusions 2.d. and 2.e. of the Amerisure policy exclude the underlying case against Epoch from coverage. See, e.g., Florida Insurance Guaranty Association, Inc. v. Revoredo, 698 So.2d 890 (Fla.App. 3 Dist.1997), noting that
Id. at 892.
Accordingly, it is hereby
Southeastern Fidelity Ins. Co., 515 So.2d at 242.
