Southern-Owners Insurance Company v. MAC Contractors of Florida, LLC et al

Filing 54

OPINION AND ORDER denying 42 Defendant's Motion for Summary Judgment; granting 51 Plaintiff's Motion for Summary Judgment. The Clerk shall enter judgment in favor of plaintiff and against defendant declaring that plaintiff did not owe a duty to defend, terminate all deadlines, and close the file. See Opinion and Order for details. Signed by Judge John E. Steele on 6/21/2018. (BLW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
SOUTHERN-OWNERS
COMPANY,

INSURANCE

Plaintiff,
v.

Case No:

2:18-cv-21-FtM-99CM

MAC CONTRACTORS OF FLORIDA,
LLC
(d/b/a
KJIMS
Construction),
PAUL
S.
DOPPELT, Trustee of Paul S.
Doppelt
Revocable
Trust
dated 12/08/90, and DEBORAH
A.
DOPPELT,
Trustee
of
Deborah A. Doppelt Revocable
Trust dated 12/08/90,
Defendants.
OPINION AND ORDER
This matter comes before the Court on the parties’ Cross
Motions for Summary Judgment (Docs. #42, 51).

The parties filed

responses in opposition to each other’s motion (Docs. ##44, 53),
and a reply (Doc. #47) and a surreply (Doc. #50).

Both parties

seek judgment as to defendant’s duty to defend pursuant to two
almost identical insurance policies.

Both parties agree that

there are no disputed issues of material fact which preclude
summary judgment for one of them, although they dispute who should
prevail.

For the reasons set forth below, the Court grants summary

judgment in favor of plaintiff.

I.
In

this

insurance

coverage

dispute,

plaintiff-insurer

Southern-Owners Insurance Company seeks a declaratory judgment
that it has no duty to defend or indemnify defendant-insured MAC
Contractors of Florida, LLC (d/b/a KJIMS Construction) for claims
asserted in a currently pending state-court lawsuit brought by
Paul and Deborah Doppelt, styled Doppelt et al. v. MAC Contractors
of Florida, LLC d/b/a KJIMS Construction, No. 2016-CA-1530 (the
“Doppelt

Action”).

In

particular,

Southern-Owners

seeks

a

declaratory judgment that certain policy exclusions apply and
thus, Southern-Owners has no duty to defend or indemnify MAC for
the claims Doppelts asserts against it.

(Doc. #21.)

MAC (d/b/a

KJIMS Construction) filed a counterclaim seeking a declaration
that Southern-Owners was obligated to defend and indemnify MAC.
(Doc. #31.)
The Court previously stayed the indemnity issue pending the
Court’s determination of the duty to defend issue or the Doppelt
Action’s conclusion, reasoning that if Southern-Owners had no duty
to defend MAC, it follows that Southern-Owners has no duty to
indemnify.

(Doc. #39); see Trailer Bridge, Inc. v. Ill. Nat’l

Ins. Co., 657 F.3d 1135, 1146, n.2 (11th Cir. 2011) (collecting
Florida cases) (“[A] court’s determination that the insurer has no
duty to defend requires a finding that there is no duty to
indemnify.”).

- 2 -

II.
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
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

- 3 -

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.
III.
A. Substantive Legal Principles
1. Duty to Defend
In

this

diversity

action,

the

“substantive law of the forum state.”

Court

must

apply

the

Tech. Coating Applicators,

Inc. v. U.S. Fid. & Guar. Co., 157 F.3d 843, 844 (11th Cir. 1998).
In this case, Florida law applies.

The duty to defend is distinct

from, and broader than, the duty to indemnify.

- 4 -

Keen v. LA.

Sheriff’s Self-Ins., 962 So. 2d 1021, 1024 (Fla. 4th DCA 2007).
Under Florida law, “[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

complaint are factually incorrect or meritless.”

in

the

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).

See also Marr

Inv., Inc. v. Greco, 621 So. 2d 447, 449 (Fla. 4th DCA 1993)
(“[T]he

burden

of

demonstrating

that

the

allegations

of

the

complaint are cast solely and entirely within [a] policy exclusion”
rests with the insurer.).

Any doubt as to the duty to defend is

resolved in favor of the insured.

Id.

Therefore, the Court looks

to the complaint filed in the Doppelt Action and assumes all facts
are accurate.

See Jones, 908 So. 2d at 443.

2. Exclusions
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

- 5 -

to public policy.”

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

F. App’x 128, 132 (11th Cir. 2012).

An insurer has no duty to

defend if the allegations in the underlying complaint show the
applicability of a policy exclusion.

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.

The insurer

“has the burden of demonstrating that the allegations of the
complaint are cast solely and entirely within the policy exclusion
and are subject to no other reasonable interpretation.”

Northland

Casualty Co. v. HBC Corp., 160 F. Supp. 2d 1348, 1359 (M.D. Fla.
2001).
B. Pertinent Allegations of the Doppelt Action
In 2014, MAC contracted with the Doppelts to serve as the
general contractor in the construction of a residence in Marco
Island, Florida.

(Doc. #21-3, ¶¶ 13-16; Exh. A.)

Due to a dispute

between the parties, the Doppelts allege that MAC left the job
site prior to completing the residence in breach of the parties’
contract and prior to the issuance of a certificate of occupancy. 1
Because the residence remained replete with construction defects,

1

The Doppelts still do not live in the residence due to MAC’s
breach.

- 6 -

the Doppelts served MAC with a Notice of Defect pursuant to Fla.
Stat. § 558.01, et. seq., identifying eighty-six distinct defects
that were caused by MAC and/or its subcontractors that MAC failed
to correct.

(Doc. #21-3, ¶¶ 38-39, 43-44; Doc. #31-5, Exh. B.)

MAC claimed that the list of defects were simply “punch-list
items.”

(Id., ¶ 56.)

MAC failed to cure the defects.

The

Doppelts allege that this was an anticipatory repudiation and total
breach of the contract.

(Id., ¶ 42.)

On August 24, 2016, the Doppelts filed suit in state court
against MAC for breach of contract, alleging construction defects.
Specifically, in the Verified First-Filed Complaint (Doc. #31-5),
the Doppelts alleged, among other things, “damage to wood floors
and the metal roof.”

(Id., ¶ 54.)

Additionally, the First-Filed

Complaint incorporated as an exhibit the Section 558 Notice that
listed eighty-six defects.

(Id., ¶ 45.)

On November 17, 2016, the Doppelts filed an Unverified Amended
Complaint (Doc. #21-3), alleging nearly the same allegations as
the First-Filed Complaint, but stating for the first time that MAC
“abandoned” the project:
Contractor refused to complete the contract, abandoned
the project, ordered his subcontractors to also abandon
the project and to refuse to work with the Owners in
completing the Residence, thus leading the [sic] of this
action.
(Doc. #21-3, ¶ 56.)

- 7 -

C. The Policies and MAC’s Claim
Pertinent here, Southern-Owners issued two Commercial General
Liability (CGL) policies to MAC effective October 8, 2014 through
October 8, 2015, and effective October 8, 2015 to October 8, 2016,
bearing Policy No. 20723985 (collectively, the Policies). 2

(Docs.

#21-1 – 21-2.)
MAC tendered the Doppelt Action to Southern-Owners, seeking
defense and indemnity. 3

(Doc. #42-1, ¶ 5.)

Southern-Owners

initially accepted the demand for defense and indemnity, but
notified MAC on April 10, 2017, that it would be withdrawing its
defense, and withdrew the defense on May 7, 2017.

(Id., ¶¶ 7-8,

Exh. 2.)
Southern-Owners then filed this lawsuit on November 3, 2017,
seeking a determination as to its duties to defend and indemnify
MAC in the Doppelt Action.

Southern-Owners’ Amended Complaint

(Doc. #21) alleges that there is no duty to defend MAC pursuant to
the Policies because there is no “property damage” or “occurrence”

2

The Policies are identical in all material ways for purposes
of summary judgment.
3

The exact date that MAC tendered the Doppelt Action to
Southern-Owners is unclear.
Although MAC states in its Motion
that it made a claim on September 7, 2016, the citation to the
affidavit of MAC’s owner Jon MacDonough does not support this
assertion.
The MacDonough affidavit only states that “[u]pon
being served with the Summons and Complaint, MAC Contractors of
Florida LLC d/b/a KJIMS Construction timely tendered the lawsuit
to its insurer, Southern-Owners Insurance Company.” (Doc. #42-1,
¶ 5.)

- 8 -

as defined by the Policies, and the Doppelt Action does not
constitute a “suit” within the meaning of the Policies.

(Doc.

#21, p. 3.)
MAC argues that in comparing the Insuring Agreement of the
Policies with the allegations in the Doppelt Action, SouthernOwners owes MAC a defense in the Doppelt Action.

MAC also argues

that none of the Policies’ exclusions are triggered.

Southern-

Owners does not dispute or discuss whether the Doppelt Action
triggers coverage under the policies, but relies upon Exclusion l.
Damage to Your Work, and related definitions, to preclude coverage.
(Doc. #44, ¶ 15.)

As noted by the Eleventh Circuit, the Florida

Supreme Court has not held that courts cannot assume arguendo that
a claim is covered and proceed to analyze potentially relevant
exclusions.

Travelers Property Casualty Co. of Am. V. Salt ‘N

Blue LLC, et al., --- F. App’x ---, 2018 WL 2095483, *3 (11th Cir.
May 7, 2018).
IV.
D. The Southern-Owners Insurance Policies Language
The Policies provide that Southern-Owners had the following
duty to defend:
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
the insurance applies. We will have the right

- 9 -

and duty to defend the insured against any “suit”
seeking those damages.
b. This insurance applies to “bodily injury” and
“property damage” only if:
(1)

The
“bodily
injury”
or
“property
damage” is caused by an “occurrence”
that takes place in the “coverage
territory;”

(2)

The
“bodily
injury”
or
“property
damage” occurs during the policy period
. . .

(Doc. #31-1, p. 33, CGL Coverage Form, ¶ 1.)

“Occurrence” is

defined as “an accident, including continuous or repeated exposure
to substantially the same general harmful conditions.”
Definitions, ¶ 14.)

(Id.,

“Suit” is defined as:

a civil proceeding in which damages because of ‘bodily
injury’, ‘property damage’, ‘personal injury’ or
‘advertising injury’ to which this insurance applies are
alleged. ‘Suit’ includes:
a. An arbitration proceeding in which such damages are
claimed and to which the insured must submit or
does submit with our consent; or
b. Any other alternative dispute resolution proceeding
in which such damages are claimed and to which the
insured submits with our consent.
(Id., ¶ 21.)
Even with a claim that triggers coverage under Insuring
Agreement paragraph 1, Southern-Owners need not provide coverage
if

the

claim

falls

within

one

of

its

exclusion

provisions.

Southern-Owners relies primarily on Exclusion l. Damage to Your

- 10 -

Work,

and

the

operations

accompanying

hazard”,

definitions

“property

of

damage”,

“products-completed

and

preclude a duty to defend in the Doppelt Action.

“your

work”,

to

These provisions

state as follows:
Exclusion l. Damage to Your Work
“Property damage” to “your work” arising out of it or
any part of it and included in the “products-completed
operations hazard.”
(Doc. #31-1, p. 37.)

“Property damage” is defined as:

a. Physical injury to tangible property, including
all resulting loss of use of that property. All
such loss of use shall be deemed to occur at the
time of the physical injury that caused it; or
b. Loss of use of tangible property that is not
physically injured. All such loss shall be deemed
to occur at the time of the “occurrence” that
caused it.
(Id., Definitions, ¶ 18.)

“Your Work” is defined as:

(1)

Work or operations performed by you or on your
behalf; and

(2)

Materials, parts or equipment furnished
connection with such work or operations.

(Id., Definitions, ¶ 27.)

in

“Products-completed operations hazard”

is defined as:
a. Includes all “bodily injury” and “property damage”
occurring away from premises you own or rent and arising
out of “your product” or “your work” except:
(1)

Products
that
possession; or

are

still

- 11 -

in

your

physical

(2)

Work that has not yet been completed or abandoned.
However, “your work” will be deemed completed at
the earliest of the following times:
(a)

(b)

When all of the work to be done at the job
site has been completed if your contract
call for work at more than one job site.

(c)

(Id.,

When all the work called for
contract has been completed.

When that part of the work done at a job
site has been put to its intended use by
any person or organization other than
another contractor or subcontractor working
on the same project.
Work that may need
service, maintenance, correction, repair or
replacement,
but
which
is
otherwise
complete, will be treated as completed.

Definitions,

presented

is

¶

whether

17

(emphasis

Doppelt’s

added)).

allegations

in

Thus,

your

the

contained

issue

in

the

underlying suit fit within Exclusion l.
Southern-Owners argues that the underlying Amended Complaint
clearly alleges that MAC “abandoned the project,” which the Court
must accept as true in determining the duty to defend, and the
term must be given its plain and unambiguous meaning.
908

So.

2d

at

443.

Thus,

Southern-Owners

argues

See Jones,
that

the

definition of the “products-completed operations hazard”, is met.
MAC responds that while the parties do not dispute that the work
had not yet been completed when MAC ceased working (Doc. #47, p.
2), it argues that the assertion that MAC abandoned the project is
only alleged in a conclusory fashion with no support.

MAC also

argues that the “products-completed operations hazard” provision

- 12 -

is ambiguous because it is not clear whether the word “not”
modifies the term “abandoned” or “completed.”

An ambiguity exists

when there is more than one reasonable interpretation of policy
language — one affording coverage and one excluding coverage.
Lenhart v. Federated National Insurance Co., 950 So. 2d 454, 457
(Fla. 4th DCA 2007).
Here,

the

Court

finds

that

Exclusion

l

applies

and

the

provision is unambiguous; therefore, the Court need not resort to
the rules of construction proposed by MAC.
the

placement

operations

of

hazard”

the

word

opens

reasonable interpretation.

“or”

the

in

MAC has not shown that

the

exclusion

up

“products-completed
to

more

than

one

The exclusion clearly applies to “your

work” that was either abandoned or not completed.

The Policies’

exclusionary language contemplates no coverage for work that has
yet to be completed, and the Doppelts allege that MAC failed to
complete the work as contemplated by the parties’ contract and MAC
itself concedes that the parties “do not dispute the fact that the
work had not yet been completed.”
Thus,

the

Court

finds

(Doc. #47, p. 2.)
that

the

exclusion

clause

unambiguously denies coverage for property damage in the event
that the insured abandons or does not complete its work, which is
what is alleged to have occurred in this case.

Because Southern-

Owners has no duty to defend MAC in the Doppelt Action, the Court

- 13 -

likewise concludes that it has no duty to indemnify MAC and
judgment may be entered in Southern-Owners’ favor.
Accordingly, it is hereby
ORDERED AND ADJUDGED:
1.

Defendant MAC Contractors of Florida LLC’s Motion for

Partial Summary Judgment as to the Duty to Defend (Doc. #42) is
DENIED.

Southern-Owners Insurance Company’s Motion for Summary

Judgment (Doc. #51) is GRANTED.
2.

It is hereby declared that Southern-Owners Insurance

Company does not owe a duty to defend MAC Contractors of Florida,
LLC (d/b/a KJIMS Construction) in the matter of Doppelt et al. v.
MAC Contractors of Florida, LLC d/b/a KJIMS Construction, No. 2016CA-1530.
3.

Judgment

is

entered

in

favor

of

Southern-Owners

Insurance Company and against MAC Contractors of Florida, LLC d/b/a
KJIMS Construction.
4.

The Clerk is directed to terminate all pending deadlines

and motions, enter judgment accordingly, and close the file.
DONE and ORDERED at Fort Myers, Florida, this __21st__ day of
June, 2018.

Copies: Counsel of Record

- 14 -