Gotham Insurance Company v. West Coast Fire Protection Corp. et al

Filing 93

OPINION AND ORDER granting 82 plaintiff's Motion for Summary Judgment; denying 79 defendants Maria and Raymond Foreste's Motion for Summary Judgment; denying 80 defendants West Coast Fire Protection Corp. and Giovanni R. Blanco� 39;s Motion for Summary Judgment; denying as moot 55 defendants West Coast Fire Protection Corp. and Giovanni R. Blanco's Motion to Strike Plaintiff's Expert. The Clerk is directed to enter judgment in favor of Gotham Insurance Company a nd against West Coast Fire Protection Corp., Giovanni R. Blanco, and Maria Foreste and Raymond Foreste, individually, and as parents and natural guardians of E.F.; terminate all pending deadlines and motions; and close the file. See Opinion and Order for details. Signed by Judge John E. Steele on 8/15/2017. (AMB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
GOTHAM INSURANCE COMPANY,
Plaintiff,
v.

Case No:

2:16-cv-15-FtM-99CM

WEST COAST FIRE PROTECTION
CORP., GIOVANNI R. BLANCO,
MARIA FORESTE, individually,
and as parents and natural
guardians
of
E.F.,
and
RAYMOND
FORESTE,
individually, and as parents
and natural guardians of
E.F.,
Defendants.
OPINION AND ORDER
This matter comes before the Court on the parties’ cross
Motions for Summary Judgment (Docs. ##79, 80, 82), and supporting
materials (Docs. ##64-78, 81), filed on June 19, 2017.

The parties

filed responses in opposition to each other’s motions (Docs. ##86,
87, 88, 89) on July 13, 2017.

Both parties seek judgment in their

favor as to plaintiff’s duty to defend and indemnify defendants in
an underlying auto accident lawsuit pursuant to a commercial
general

liability

insurance policy.

insurance

policy

and

an

excess/umbrella

For the reasons set forth below, the Court

grants summary judgment in favor of plaintiff.

I.
Plaintiff seeks a declaration as whether it has a duty to
defend and indemnify its insureds for an underlying negligence
action styled Maria Foreste and Raymond Foreste, individually and
as parents and natural guardians of E.F., a minor v. Giovanni
Blanco and West Coast Fire Protection Corp., Case No. 2015-CA2073, filed on August 10, 2015, in the Circuit Court of the
Twentieth

Judicial

Circuit

(“Underlying Action”).

in

and

for

Lee

County,

Florida

This lawsuit arises from an auto accident

involving a company truck driven by defendant Giovanni Blanco which
caused traumatic injuries to E.F., a minor child.
This

coverage

dispute

centers

around

an

auto

exclusion

contained in a commercial general liability insurance policy (CGL
Policy) and an excess/umbrella policy (UMB Policy) that plaintiff
Gotham Insurance Company (plaintiff or Gotham) issued to defendant
West Coast Fire Protection Corp. (defendant or West Coast Fire)
(collectively, “Policies”).

(Docs. ##5-1, 5-2.) 1

Pursuant to the

Policies, Gotham agreed to defend and indemnify West Coast Fire in
lawsuits asserting certain types of claims, subject to certain
enumerated exclusions.

In its Complaint (Doc. #5), Gotham seeks

a declaration that there is no coverage for the underlying claim,
and West Coast Fire and Blanco have filed a counterclaim (Doc.

1

Docs. ##5-1 and 5-2 are certified copies of the Policies
that no party disputes for completeness.
- 2 -

#38),

seeking

a

declaration

that

there

is

coverage

for

such

occurrences and has demanded that Gotham tender its policy limits
to the Forestes (E.F.’s parents).

(Id. at ¶ 20.)

The Forestes

also contend coverage exists based upon their interpretation of
the Policies, estoppel, and other theories.

(Doc. #40.)

II.
The following facts are undisputed by the parties:
A. The CGL Policy
Gotham,

a

surplus-lines

insurance

carrier,

first

began

issuing insurance coverage to West Coast Fire, a fire suppression
contractor, in 2011, with the first policy period beginning in
2012.

Renewal policies were issued each year and, as relevant

here, Gotham provided CGL coverage to West Coast Fire pursuant to
Policy Number GL2015FSC00161 for policy period January 19, 2015 to
January 19, 2016 (the “CGL Policy”).

(Doc. #5-1.)

The CGL Policy

carried an occurrence limit of $1,000,000 and a general aggregate
limit

of

$2,000,000,

subject

exclusions of the policy.

to

the

(Id. at 5.)

terms,

conditions,

and

The CGL Policy states, in

relevant parts:
1. Insuring Agreement
a. We will pay those sums that the insured becomes
legally obligated to pay as damages because of “bodily
injury” or “property damage” to which this insurance
applies…
2. Exclusions
This insurance does not apply to:

- 3 -

g. Aircraft, Auto or Watercraft
“Bodily Injury” or “property damage” arising out of the
ownership, maintenance use or entrustment to others of
any aircraft, “auto” or watercraft owned or operated by
or rented or loaned to any insured.
Use includes
operation and “loading or unloading.”
(Doc. #5-1, pp. 13-15.)

“Auto” is defined as “a land motor

vehicle, trailer or semitrailer designed for travel on public
roads, including any attached machinery or equipment.”

(Id. at

22.)
B. The Umbrella Policy (UMB)
Gotham provided commercial liability umbrella coverage to
West Coast Fire pursuant to Policy Number UM2015FSC00064 for policy
period January 19, 2015 to January 19, 2016 (the “UMB Policy”).
(Doc

#5-2.)

The

UMB

Policy

carried

an

occurrence

limit

of

$2,000,000, subject to the terms, conditions, and exclusions of
the policy.

(Id. at 4.)

The UMB Policy states, in relevant

parts:
1. Insuring Agreement
a. We will pay on behalf of the insured the “ultimate
net loss” in excess of the “retained limit” because of
“bodily injury” or “property damage” to which this
insurance applies….
2. Exclusions
This insurance does not apply to:
f. Auto Coverages
(1) “Bodily injury” or “property damage” arising out of
the ownership, maintenance or use of any “auto” which is
not a “covered auto”….

- 4 -

(Id. at 6-7.)

“Covered auto” is defined as “only those ‘autos’

to which underlying insurance applies.”

(Id. at 17.)

“Underlying

insurance” is defined as “any policies of insurance listed in the
declarations under the schedule of ‘underlying insurance.’”

(Id.

at 19.)
The Declarations page does not identify any underlying policy
insurance numbers.

See Doc. #5-2, p. 4, Item 6 left blank.

Item

7 of the Declarations page provides:
Item 7. Form(s) and Endorsement(s) made a part of the
police at time of issue: EX00271010, IL00010910,
CU00010900.
(Id.) 2

Endorsement

EX00271010

is

the

“Schedule

of

Primary

Insurance,” which is a chart with spaces to itemize sources of
primary insurance.

(Id. at 5.)

The Court sets forth the Schedule

in full here:

2

Although three forms are identified under Item 7, only the
first and last forms are contained in the certified copy of the
Policy included in the record.
Form IL00010910 is missing
entirely.
(Doc. #5-2.)
And the UMB Policy contains numerous
forms and endorsements that are not listed under Item 7. (Id.)
- 5 -

- 6 -

(Doc. #5-2, p. 5.)

To highlight the relevant portions of the

Schedule of Primary Insurance, the Court notes that the word
“EXCLUDED” was typed in the pre-printed section of the Schedule of
Primary

Insurance

identified,

and

for

there

auto
is

no

coverage.
reference

No
to

auto

carrier

Allstate

is

Insurance

Company, which was West Coast Fire’s auto insurance carrier at the
time of the auto accident.

The only insurance policy identified

in the Schedule of Primary Insurance is the Gotham CGL Policy,
GL2015FSC00161, which excludes auto coverage.

See supra, Sec.

II.A.
The UMB Policy also includes an “AUTO EXCLUSION ENDOREMENT,”
form UM00780911, which is set forth here:

- 7 -

(Doc.

#5-2,

p.

36.)

The

Auto

Exclusion

Endorsement

(form

UM00780911) is not listed under Item 7 of the Declarations page,
but the Declarations Page does state the following:
THIS POLICY TOGETHER WITH THE POLICY CONDITIONS,
COVERAGE PARTS AND FORMS AND ENDORSEMENTS, IF ANY,
COMPLETE THE ABOVE NUMBERED POLICY.
(Doc. #5-2, p. 4.)

The “Schedule of Forms and Endorsement” lists

by name and form number the Schedule of Primary Insurance, as well
as the Auto Exclusion.

(Id. at 31.)

C. Underwriting and the Purchase of the Policies
During the time that Gotham issued insurance policies to West
Coast Fire, All Risks, Ltd. performed the underwriting of West
Coast Fire’s policies as Gotham’s program manager.
18:5-20:5.)

West Coast Fire’s agent for purchasing the Policies

is the Plastridge Agency, Inc. 3
18:20; Doc. #65-1.)

(Doc. #64-1, 15:21-16:9; 17:7-

West Coast Fire’s agent for purchasing auto

insurance is the Peterson Agency.
When

(Doc. #76-2,

West

Coast

Fire

(Doc. #64-1, 14:21-15:19.)

first

purchased

insurance

through

Plastridge in January 2011, West Coast Fire needed to renew CGL
coverage, which was expiring.
1, 26:21-27:2, 29:24-30:18.
emailed

Plastridge

a

(Doc. #64-1, 21:16-24:8; Doc. #67West Coast Fire’s president, Vidal,

certificate

limits that needed to be replaced.

3

of

insurance

reflecting

the

(Doc. # 65-1, pp. 8-15); Doc.

Plastridge is a general retail independent insurance agency.
(Doc. #67-1, 11:1-4.)
- 8 -

#64-1, 21:16-24:8; Doc. #67-1, 29:24-30:18.)

In connection with

procuring insurance for West Coast Fire in 2011, Plastridge had
obtained West Coast Fire’s insurance application from the prior
year.

Attached to the application were documents setting forth

the insurance requirements of general contractors for whom West
Coast Fire worked, requiring West Coast Fire to have $1,000,000 in
auto overage and CGL coverage in the amount of $1,000,000 for each
occurrence and $2,000,000 general aggregate.
36; Doc. #64-1, 26:11-27:2.)

(Doc. #65-1, pp. 16-

In 2011, West Coast Fire purchased,

through Plastridge, a CGL policy issued by Interstate Fire &
Casualty Co. with occurrence limits of $1,000,000 and general
aggregate limits of $2,000,000.

(Doc. #68-1, pp. 127-31).

West

Coast Fire did not purchase an umbrella liability policy in 2011.
In 2012, 2013, 2014, and 2015, West Coast purchased, through
Plastridge, CGL and umbrella liability policies issued by Gotham.
(Doc. #64-2, 48:25-49:5; 55:3-16; 57:9-17; 59:21-60:1; Doc. #761,

13:12-15;

17:1-10.)

The

record

shows

that

each

year,

Plastridge would send West Coast Fire the application for renewal,
which Vidal would review, sign, and return.
112:3)

(Doc. #67-1, 109:8-

After West Coast Fire received the renewal quotes, Vidal

“usually agreed and signed whatever forms that they had that they
sent over to me and sent them the deposit check and the policy
would be renewed.”

(Doc. #64-1, 32:20-25)

There is no evidence

that West Coast Fire ever requested auto coverage from Gotham and

- 9 -

never applied for auto insurance through Plastridge.

With each

renewal, a blank application would be sent to Vidal who would type
information into the document, including coverages he wanted.
(Doc. #64-1, 85:3-18.)
were left blank.

The questions pertaining to auto coverage

(Doc. #81-1, ¶¶ 6-7.)

And when West Coast Fire

was asked to list all liability/compensation policies in force to
apply as underlying insurance, West Coast Fire would list the CGL
Policy, and did not list any auto liability policies.
11.)

(Id. at ¶

In each of the four years that Gotham issued insurance

policies to West Coast Fire, including the policy year at issue,
All Risks provided a quote and binder to Plastridge for the
umbrella

liability

policy,

which

included

the

Auto

Exclusion

Endorsement that was transmitted to West Coast Fire for review. 4
There were some questions regarding whether auto coverage
should have been included in the UMB Policy, beginning in 2013.
In 2013, in an internal email from an underwriter employed by All
Risks, states: “Please advise if form CU3104(09/08) FLORIDA EXCESS
UNINSURED MOTORISTS COVERAGE should be on this Gotham Excess
policy.

If yes, please provide limits to be typed in.

please issue a revised binder removing this form.”

4

If not,

(Doc. #79-2,

Although defendants dispute that Plastridge ever delivered
a copy of the 2015-2016 UMB Policy to West Coast Fire for review
because they could not find the correspondence that sent the quote,
Connor Lynch, Plastridge’s corporate representative, testified
that the company’s activity report showed that it was sent to West
Coast Fire with a finance contract, which was received and
reviewed. (Doc. #67-1, 114:6-115:10; 152:4-155:18.)
- 10 -

pp. 2-3.)

In 2014, an internal email to a Senior Underwriter at

All Risks requests that an uninsured motorist rejection form be
added to the UMB Policy.

(Id. at 4-5.)

In 2015, an internal

email from an All Risks underwriter states: “Please advise if form
CU3104(09/08) FLORIDA EXCESS UNINSURED MOTORISTS COVERAGE should
be on the policy.”
Underwriter

at

All

(Id. at 6.)
Risks

On that same date, an Associate

forwards

the

email

to

the

Senior

Underwriter and states: “Should this form be in the policy?

I

don’t see that any exclusion forms were attached to the quote for
them to reject.

So, nothing was received back to exclude.”

Id.

But it is undisputed that auto coverage was never added to the UMB
Policy and that the Auto Exclusion Endorsement was included in the
UMB Policy.
D. The Auto Accident, Lawsuit, and Settlement Demands
On or about July 28, 2015, E.F., a minor child, was struck by
an automobile owned by West Coast Fire that was being driven by
West Coast Fire employee, and defendant, Giovanni R. Blanco.
(Doc. 5, ¶ 18.)

A “claim” against West Coast Fire occurred on or

around August 10, 2015, when the Forestes filed a negligence action
against West Coast Fire seeking damages arising from the auto
accident in state court (the Underlying Action).

(Doc. #38-1.)

At the time of the accident, West Coast Fire had auto insurance
with

$1,000,000

policy

continuously since 2004.

limits

with

Allstate,

which

it

had

(Doc. #64-1, 12:10-13:8; 14:13-15:15.)

- 11 -

Allstate retained attorney Ronald Arend to defend West Coast Fire
and Blanco in the Underlying Action.

(Doc. #64-1 at 62:14-21.)

The Underlying Action is still pending and Arend continues to
represent West Coast Fire in the case.

(Id. at 62:22-24; 96:2-

4.)
On September 17, 2015, Gotham claims examiner Chris Davis 5
sent an email to Curtis Hunter of Allstate, informing him that
there was coverage under the Policies for the auto accident,
stating:
This letter will memorialize our earlier conversation
where I confirmed that we have excess coverage of
$2,000,000 for this loss. Please have defense counsel
add me to their report distribution list.
(Doc. #77-1, pp. 25-26.)

By letter dated September 21, 2015 to

the Forestes’ counsel, Davis stated:
This will acknowledge receipt of your letter dated
8/20/2015 to Allstate Insurance advising that you are
representing the above named claimant for injuries
suffered in an incident on 7/28/2015. Gotham Insurance
Company provides excess coverage for West Coast Fire
Protection Corp.
(Id. at 23-24.)
On October 12, 2015, the Forestes’ counsel sent a timesensitive settlement demand addressed to Arend that requested the
policy limits under both the Allstate and Gotham policies:
We are hereby demanding that your clients tender any and
all available insurance policy limits in exchange for a
full release of your clients. Based on your clients’
5

Davis is employed by ProSight Specialty Insurance Company.
Gotham is wholly-owned by ProSight. (Doc. 76-1, 5:21-24.)
- 12 -

prior representation, there is Three Million Dollars
($3,000,000) of coverage available.
If your clients
have more than Three Million Dollars ($3,000,000) in
coverage available to them, then this demand is for that
total amount.
(Doc. #66-1, pp. 51-53.)
26, 2015.

The settlement demand expired on October

(Id.)

On October 21, 2015, five days prior to the expiration of the
settlement demand, Donna Matt, a Gotham liability claims manager,
called Mike Vidal, West Coast Fire’s president, and sent him an
email, relying on an exclusion from coverage contained in the
policy provisions that expressly excludes coverage for the auto
accident, writing:
I unsuccessfully attempted to reach you by telephone but
and [sic] due to the timing issues I am sending this email so that you may have this information as soon as
possible.
Gotham advises that the Umbrella Liability
policy issued to West Coast Fire Protection Corp. by
Gotham specifically excludes coverage for claims arising
out of automobile losses and a more detailed analysis of
our position will be forthcoming. As such, Gotham must
advise Ms. Kreizinger (Forestes’ counsel) that West
Coast Fire Protection Corp.’s Umbrella Liability policy
does not provide coverage for the claim presented by her
clients and Gotham is therefore unable to contribute to
any settlement. Gotham will do so tomorrow, October 22,
2015.
(Doc. #66-1, pp. 54-55.)
In a letter from Davis to Vidal dated October 22, 2015, four
days prior to the expiration of the settlement demand, Davis wrote
to reject the settlement demand, stating:
We are obliged to inform you that the allegations and
damages presented in the captioned complaint are
specifically excluded by the Commercial Liability

- 13 -

Umbrella policy with Gotham.
Gotham denies any
obligation to defend or indemnify West Coast Fire
Protection Corp. and/or their employees for uncovered
damages.
(Doc. #66-1, pp. 56-61.)

The letter directed attention to the

auto exclusion sections of the UMB Policy and enclosed a certified
copy of the policy.

(Id.)

On October 23, 2015, West Coast Fire’s counsel sent a letter
to Davis, stating:
Belatedly, your client has disclaimed coverage based on
an exclusionary provision.
Your error in not timely
asserting your coverage position has resulted in
plaintiff’s untimely demand of three million dollars
($3,000,000). Accordingly, and irrespective of whether
coverage existed as an initial matter, my client and the
claimants have relied to their detriment on the
statement of availability of coverage in your previous
representations.
(Doc. #66-1, pp. 38-39.)
On December 14, 2015, the Forestes’ counsel wrote to Davis,
outlining arguments for why the UMB Policy is ambiguous and that
coverage should be afforded under its terms, and making a final
settlement offer of $2,000,000, or a greater amount if additional
insurance coverage was available.
On

January

4,

2016,

(Doc. #78-9.)

Gotham

responded

to

the

Forestes’

settlement demand and reiterated its position that there was no
coverage for the auto accident under the Gotham policies.
#78-15.)

(Doc.

The Underlying Action remains pending. 6

6

Although some courts within the Eleventh Circuit generally
recognize that an insurer’s duty to indemnify is not ripe for
- 14 -

III.
A court may grant summary judgment only if satisfied that
“there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.”
R. Civ. P. 56(a).

Fed.

A fact is “material” if it goes to “a legal

element of the claim under the applicable substantive law” and
thus may impact the case’s outcome.
121 F.3d 642, 646 (11th Cir. 1997).

Allen v. Tyson Foods, Inc.,
“An issue of fact is ‘genuine’

if the record taken as a whole could lead a rational trier of fact
to find for the nonmoving party.”

Hickson Corp. v. N. Crossarm

Co., 357 F.3d 1256, 1260 (11th Cir. 2004).
“The burden of establishing that there is no genuine issue of
material fact lies with the moving party.”

Walker v. Darby, 911

F.2d 1573, 1576 (11th Cir. 1990) (quoting Celotex Corp. v. Catrett,
477 U.S. 317, 322–23 (1986)).

“[O]nce the moving party has met

that burden by presenting evidence which, if uncontradicted, would
entitle it to a directed verdict at trial,” the party opposing

adjudication unless and until the insured has been held liable in
an underlying action, Evanston Ins. Co. v. Gaddis Corp., 145 F.
Supp. 3d 1140, 1153 (S.D. Fla. 2015) (collecting cases), “[i]f the
Court determines that there is no duty to defend, then there is no
duty to indemnify as the duty to defend is much broader than the
duty to indemnify.” Essex Ins. Co. v. Zota, 607 F. Supp. 2d 1340,
1358 (S.D. Fla. 2009). Because the Court finds that there is no
duty to defend in this case, the case is ripe for review despite
the fact that the Underlying Action is ongoing.
The Court
otherwise exercises its discretion and will allow Gotham’s claim
to proceed in this separate federal declaratory action. See MidContinent Casualty Co. v. Van Emmerik Custom Homes, Inc. et al.,
2:16-cv-819-Ftm-99MRM, 2017 WL 700226 (M.D. Fla. Feb. 22, 2017).
- 15 -

summary judgment must “set forth specific facts showing that there
is a genuine issue for trial.

A mere ‘scintilla’ of evidence

supporting the opposing party’s position will not suffice; there
must be enough of a showing that the jury could reasonably find
for that party.”

Id. at 1576–77.

In ruling on the motion, the

court must view all evidence and draw all reasonable inferences in
favor of the non-moving party.

Scott v. Harris, 550 U.S. 372, 380

(2007); Tana v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).
Summary judgment should be denied not just where the parties
disagree on issues of material fact, but also “where the parties
agree on the basic facts, but disagree about the factual inferences
that should be drawn from these facts.”

Warrior Tombigbee Transp.

Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983); see
also Allen v. Bd. of Pub. Educ., 495 F.3d 1306, 1315 (11th Cir.
2007) (“If a reasonable fact finder evaluating the evidence could
draw more than one inference from the facts, and if that inference
introduces a genuine issue of material fact, then the court should
not grant summary judgment.”).

Put simply, if the resolution of

a material fact or the inference to be drawn therefrom presents a
“he said, she said” scenario, and if the record has evidence
genuinely supporting both sides of the story, then summary judgment
is not appropriate.

- 16 -

IV.
Under Florida law, 7 “[i]t is well settled that 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.

The duty to defend must be determined

from the allegations in the complaint.”

Jones v. Florida Ins.

Guar. Ass’n, Inc., 908 So. 2d 435, 442–43 (Fla. 2005) (citations
omitted).

This duty to defend exists “even if the allegations in

the complaint are factually incorrect or meritless.”

Id. at 443.

“If the complaint alleges facts partially within and partially
outside the coverage of the policy, the insurer is obligated to
defend the entire suit.”

Category 5 Mgmt. Grp. LLC v. Companion

Prop. & Cas. Ins. Co., 76 So. 3d 20, 23 (Fla. 1st DCA 2011).

Any

doubt as to the duty to defend is resolved in favor of the insured.
Id.
Insurance contracts must be construed in accordance with the
plain language of the policy.

Swire Pacific Holdings, Inc. v.

Zurich Ins. Co., 845 So. 2d 161, 165 (Fla. 2003).

“Further, we

consider that ‘[i]f the relevant policy language is susceptible to
more than one reasonable interpretation, one providing coverage
and

the

[other]

limiting

coverage,

7

the

insurance

policy

is

In this diversity action, state law law controls.
MidContinent Cas. Co. v. Am. Pride Bldg. Co., LLC, 601 F.3d 1143,
1148 (11th Cir. 2010). The parties do not dispute that the policy
was executed in Florida and therefore Florida law applies to the
substantive issues in this case.
- 17 -

considered ambiguous.’”

Id. (quoting Auto-Owners Ins. Co. v.

Anderson, 756 So. 2d 29, 34 (Fla. 2000)).

An ambiguous provision

is construed in favor of the insured and strictly against the
drafter.

Id.

The Florida Supreme Court has consistently held

that “in construing insurance policies, courts should read each
policy as a whole, endeavoring to give every provision its full
meaning and operative effect.”

Id.

Gotham moves for summary judgment on the basis that the
damages sought by the Forestes in the state action are not covered
by the Policies because they fall within the auto exclusion.

Thus,

Gotham asserts that as a matter of law it has no duty to defend in
the state action, or to indemnify.

Defendants respond that the

UMB Policy is ambiguous and the Auto Exclusion Endorsement is not
a part of the policy.

Because of the policy’s ambiguity and

internal inconsistencies, which should be construed against the
insurer as drafter, defendants argue that coverage should be
afforded.
A. The Policy Language and Ambiguity
The UMB Policy’s Coverage Form clearly provides an exclusion
for any bodily injury arising from the use of any auto that is not
a covered auto.

(Doc. #5-2, pp. 6-7.)

“Covered auto” is defined

as only those autos to which underlying insurance applies.
at 17.)
insurance

(Id.

“Underlying insurance” is defined as “any policies of
listed

in

the

declarations

- 18 -

under

the

schedule

of

underlying insurance.”

(Id. at 19.)

Defendants argue that because the Auto Exclusion Endorsement
form is not listed at “Item 6. Underlying Policy Number(s)” on the
Declarations page, it is not a part of the UMB Policy.
further

argue

that

this

blank

is

also

inconsistent

Defendants
with

the

Schedule of Primary Insurance, which lists the CGL Policy as
underlying insurance.

Additionally, defendants argue ambiguity

by pointing out that Item 7 does not include all of the forms and
endorsements

made

a

part

of

the

Policy,

including

the

Auto

Exclusion Endorsement form, which cannot be considered a part of
the UMB Policy because it is not listed.

Defendants argue that

any ambiguity should be resolved in favor of coverage.
Although courts should narrowly construe exclusions to an
insurance policy, “exclusions are presumptively valid and will be
given effect if specific, plain, clear, prominent, and not contrary
to public policy.”

C.R. Bard, Inc. v. Liberty Mut. Ins. Co., 473

F. App’x 128, 132 (3d Cir. 2012).
if

the

allegations

in

the

An insurer has no duty to defend
underlying

applicability of a policy exclusion.

complaint

show

the

Essex Ins. Co. v. Big Top

of Tampa, Inc., 53 So. 3d 1220, 1223–24 (Fla. 2d DCA 2011); State
Farm Fire and Cas. Co. v. Tippett, 864 So. 2d 31, 35 (Fla. 4th DCA
2003).

“Because

they

tend

to

limit

or

avoid

liability,

exclusionary clauses are construed more strictly than coverage
clauses.”

Category 5 Mgmt. Grp., 76 So. 3d at 23.

- 19 -

The Declarations page to the UMB Policy states under Item 7
that the Schedule of Primary Insurance is a “form or endorsement
made a part of the policy at the time of issue.”
4.)

(Doc. #5-2, p.

The Schedule of Primary Insurance excludes auto coverage.

Indeed,

in

the

section

titled

“Name

of

Underlying

Insurer,

Underlying Policy Number, Underlying Policy Period,” the word
“EXCLUDED” is written.

Id.

The Court is not persuaded by the

argument that the Auto Exclusion Endorsement is not a part of the
UMB Policy simply because it is not listed on the Declarations
page.
WITH

The Declarations page states that “THIS POLICY TOGETHER
THE

POLICY

CONDITIONS,

COVERAGE

PARTS

AND

FORMS

ENDORSEMENTS, IF ANY, COMPLETE THE ABOVE NUMBERED POLICY.”

AND
(Id.)

This readily leads to the conclusion that the Auto Exclusion
Endorsement was a part of the UMB Policy even though it was not
listed under Item 7.
underlying

insurance

Furthermore, the CGL Policy is the only
identified

on

the

Schedule

of

Primary

Insurance, and the CGL Policy specifically excludes coverage for
auto.

(Doc. #5-1, pp. 17-18.)

The Court also finds it persuasive that the Auto Exclusion
Endorsement was included each renewal year, and was reviewed by
West Coast Fire, and auto coverage was never requested by the
insured.

There is no evidence or testimony offered by any company

witness, nor by West Coast Fire’s president, that auto coverage
was ever requested or included under the Policies.

- 20 -

Although

defendants now rely on an ambiguity argument to read auto coverage
into the Policies, when the Policies are read as a whole, and
giving every provision its full meaning and operative effect, it
seems readily apparent that auto coverage is excluded.

See Fla.

Stat. § 627.419(1) (“Every insurance contract shall be construed
according to the entirety of its terms and conditions as set forth
in the policy and as amplified, extended, or modified by any
application

thereof

or

any

rider

or

endorsement

thereto.”);

Steadfast Ins. Co. v. Celebration Source, Inc., Case No. 15-61668,
2017 WL 416118, at *4 (S.D. Fla. Jan. 27, 2017) (applying rules of
insurance policy construction set forth in Fla. Stat. 627.419(1)
to surplus lines insurance policies); Swire Pacific Holdings, 845
So. 2d at 166.

Thus, the Court finds no ambiguity or conflict

within the Policies. 8
Moreover, even if the UMB Policy is internally inconsistent
by failing to include the Auto Exclusion Endorsement at Item 7 and
by stating that it is part of the policy, Florida courts have found
that the endorsement controls to the extent an endorsement is
inconsistent with the body of a policy.

See Steuart Petroleum Co.

v. Certain Underwriters at Lloyd’s London, 696 So. 2d 376, 379

8

The Forestes also state that the Auto Exclusion Endorsement
is not countersigned, which adds to the ambiguity of the policy.
However, because the endorsement was effective the same day as the
UMB Policy, no countersignatures were required as stated on the
face of the endorsement. See Doc. #5-2, p. 36.
- 21 -

(Fla. 1st DCA 1997) (citing 13A John A. Appleman and Jean Appleman,
Insurance Law & Practice §§ 7537-8).
B. Coverage by Estoppel
Defendants alternatively argue that even if auto coverage is
excluded under the Policies, coverage by estoppel would still
apply, triggering Gotham’s duty to defend and indemnify.

In

support, defendants state that because Gotham represented to them
that it would provide coverage for the Underlying Action and then
retracted coverage after a time-sensitive settlement demand was
made, West Coast and Blanco lost the opportunity to settle and are
subjected to the entry of a potential excess judgment against them.
The general rule in Florida is that the doctrine of estoppel
“may

not

be

used

originally existed.

to

create

or

extend

coverage”

where

none

AIU Ins. Co. v. Block Marina Inv., Inc., 544

So. 2d 998, 1000 (Fla. 1989).

The Florida Supreme Court recognized

a “very narrow exception” to this rule in Crown Life Ins. Co. v.
McBride, 517 So. 2d 660 (Fla. 1987), holding that “the doctrine of
promissory estoppel may be utilized to create insurance coverage
where to refuse to do so would sanction fraud or injustice.”
544 So. 2d at 1000 n.1.

AIU,

“When an insurance company assumes the

defense of an action, with knowledge, actual or presumed, of facts
which would have permitted it to deny coverage, it may be estopped
from subsequently raising the defense of non-coverage.”

Cigarette

Racing Team, Inc. v. Parliament Ins. Co., 395 So. 2d 1238, 1239–

- 22 -

40 (Fla. 4th DCA 1981).

See also Solar Time Ltd. v. XL Specialty

Ins. Co., 142 F. App’x 430, 434 (11th Cir. 2005) (quoting Doe, 653
So. 2d at 373).

Whether the exception to the rule applies depends

on whether the insurer assuming the defense prejudiced the insured.
Doe on Behalf of Doe v. Allstate Ins. Co., 653 So. 2d 371, 374
(Fla. 1995).

Coverage by estoppel claim requires a representation

of material fact, reasonable reliance, and a detrimental change in
position (i.e., prejudice) as a result of the reliance.

See Tome

v. State Farm Fire & Cas. Co., 125 So. 3d 864, 867 (Fla. 4th DCA
2013).
The Florida Supreme Court observed in Doe:
[T]he holding in Cigarette Racing Team properly takes
into account the import of an insurer’s obligation to
defend within a policy of liability insurance.
This
obligation has long been recognized by this Court. In
fulfilling its promissory obligation to defend, the
insurer employs counsel for the insured, performs the
pretrial investigation, and controls the insured’s
defense after a suit is filed on a claim. The insurer
also makes decisions as to when and when not to offer or
accept settlement of the claim.... This obligation
amounts to a fiduciary duty requiring the exercise of
good faith....
Thus, when the insurer undertakes the defense of a claim
on behalf of one claiming to be an insured, we have
recognized substantial duties on the part of both the
insurer and the insured. If an insurer erroneously
begins to carry out these duties, and the insured, as
required, relies upon the insurer to the insured’s
detriment, then the insurer should not be able to deny
the coverage which it earlier acknowledged.
However,
we clearly state that the insured must demonstrate that
the insurer’s assumption of the insured’s defense has
prejudiced the insured. It is the fact that the insured
has been prejudiced which estops the insurer from

- 23 -

denying
policy.

the

indemnity

obligation

of

the

insurance

Doe, 653 So. 2d at 373–74.
Here, the Court is not convinced that this case fits within
the narrow estoppel exception to create insurance coverage under
Florida law.

This is not a case where the insurer represented to

its insured that it was assuming responsibility for the insured’s
defense after the underlying claim was made on which the insured 9
relied

to

defense.

its

detriment,

and

then

the

insurer

withdrew

that

Indeed, the record does not show that Gotham ever

provided a defense in state court on behalf of West Coast Fire or
Blanco, nor represented to them that it would attempt to settle
the claim on their behalf or that it was negotiating a settlement
on their behalf.

Instead, Allstate’s counsel controlled West

Coast Fire’s defense in the Underlying Action.

Vidal, West Coast

Fire’s president, testified that following the accident he first
called Allstate and mainly dealt with that company, but did speak
to an employee of Plastridge, and had no conversations with anyone
at Gotham regarding coverage for the claim.
19.)

(Doc. #64-1, 71:3-

The first time Gotham spoke with and corresponded with Vidal

regarding the claim was when it informed him on October 21, 2015
that there was an exclusion from coverage contained in the policy

9

The Court rejects as irrelevant any argument as to the
reliance and prejudice to the Forestes as the inquiry under Florida
law is the reliance and prejudice to the insured, not a third
party.
- 24 -

provisions that expressly excludes coverage for the auto accident.
(Doc. #66-1, pp. 56-61.) C.f., Cigarette Racing Team, 395 So. 2d
at 1240 (finding estoppel where insurance company assumed defense
of its insured for sixteen months); Florida Physicians Ins. Co. v.
Stern, 563 So. 2d 156 (Fla. 4th DCA 1990) (coverage by estoppel
found where insurer assumed defense of its insured for fourteen
months); Coregis Ins. Co. v. McCollum, 961 F. Supp. 1572, 1578
(M.D. Fla. 1997) (noting that “the prejudice to the insured that
resulted in [Doe and Cigarette Racing Team] occurred when the
insurer assumed the insured’s defense without a reservation of
rights or notice to the insured of possible noncoverage until
several months or even years after the underlying claim had been
made” and denying insured’s estoppel defense as a matter of law
for failure to demonstrate prejudice).
The Court declines to impose coverage that does not otherwise
exist under the Policies.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1. Plaintiff’s Motion for Summary Judgment (Doc. #82) is
GRANTED.
2. Defendants Maria and Raymond Foreste’s Motion for Summary
Judgment (Doc. #79) is DENIED.
3. Defendants West Coast Fire Protection Corp. and Giovanni
R. Blanco’s Motion for Summary Judgment (Doc. #80) is DENIED.

- 25 -

4. It is hereby declared that Gotham Insurance Company does
not owe a duty to defend or indemnify West Coast Fire Protection
Corp. and Giovanni Blanco in the matter of Maria Foreste and
Raymond Foreste, individually and as parents and natural guardians
of E.F., a minor v. Giovanni Blanco and West Coast Fire Protection
Corp., Case No. 2015-CA-2073.
5. Judgment is entered in favor of Gotham Insurance Company
and against West Coast Fire Protection Corp, Giovanni R. Blanco,
and Maria Foreste and Raymond Foreste, individually, and as parents
and natural guardians of E.F.
6. Defendants West Coast Fire Protection Corp. and Giovanni
R. Blanco’s Motion to Strike Plaintiff’s Expert (Doc. #55) 10 is
DENIED as moot.
7. The Clerk is directed to terminate all pending deadlines,
enter judgment accordingly, and close the file.
DONE and ORDERED at Fort Myers, Florida, this __15th__ day of
August, 2017.

Copies:
Counsel of Record

10

Defendants did not rely on the expert’s opinion in support
of its Motion for Summary Judgment.
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