White Springs Agricultural Chemicals, Inc. v. Gaffin Industrial Services, Inc. et al
ORDER denying 52 White Springs Agricultural Chemicals, Inc.'s Motion for Summary Judgment As To Defendant American Safety Risk Retention Group, Inc.; granting 76 American Safety Risk Retention Group, Inc.'s Cross Motion for Summary Judgment. Signed by Judge Timothy J. Corrigan on 3/6/2014. (BJB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
WHITE SPRINGS AGRICULTURAL
CHEMICALS, INC. d/b/a PCS
PHOSPHATE - WHITE SPRINGS,
Case No. 3:11-cv-998-J-32JRK
GAFFIN INDUSTRIAL SERVICES, INC.,
AMERICAN SAFETY RISK RETENTION
GROUP, INC., and AMERICAN SAFETY
This case is before the Court on White Springs Agricultural Chemicals, Inc.’s
(“PCS”) Motion for Summary Judgment As To Defendant American Safety Risk
Retention Group, Inc. (“ASRRG”) (Doc. 52). ASRRG has responded and cross moved
for summary judgment (Doc. 76). PCS has replied to ASRRG’s response and responded
to its cross motion for summary judgment (Doc. 79). ASRRG has also replied (Doc.
82).1 The Court considers the parties’ briefs and accompanying exhibits (Docs. 53-72).
The Williams Lawsuit
This case arises out of a separate wrongful death lawsuit against Gaffin
Industrial Services, Inc. (“Gaffin”), JetStream of Houston, LLP (“JetStream”), and PCS
The Court addresses the motions and cross motions for summary judgment
between PCS and Gaffin by separate order.
for the death of Robert Williams (referred to here as the “Williams lawsuit”). His
widow Lisa Williams first filed a wrongful death lawsuit as personal representative of
his estate in the Circuit Court of Hillsborough County, Florida on June 5, 2009,
naming PCS, Gaffin, and JetStream as defendants. (Doc. 53, Ex. V.) PCS and
JetStream removed the case to this Court. (Williams v. Gaffin Industrial Services,
Inc., et al., 3:09-cv-1103-J-32JRK, Doc. 1.) The Court remanded the case back to state
court based on the joinder of Gaffin, a non-diverse defendant. (Williams, 3:09-cv-1103J-32JRK, Doc. 67.) The state court then dismissed the claims against Gaffin, and PCS
and JetStream removed the case again. (Williams, 3:10-cv-549-J-32JRK, Doc. 1). Lisa
Williams eventually settled her claims with Gaffin, JetStream, and PCS.
Williams, 3:10-cv-549-J-32JRK, Docs. 113, 161.)
The final operative complaint in the Williams lawsuit was the Second Amended
Complaint. (Doc. 53, Ex. W.) The complaint alleged that, in June 2007, Williams, an
employee of Gaffin, died while using a high-powered waterblasting gun to perform
industrial waterblasting work at PCS’s White Springs, Florida facility. (Doc. 53, Ex.
W at ¶¶ 2, 6, 28.) Williams was allegedly performing this work under an agreement
between PCS and Gaffin in which Gaffin agreed to provide equipment, including the
high-powered waterblasting gun, and personnel to perform work at PCS’s facility. (Id.,
¶¶ 8, 11.) The high-powered waterblasting gun Williams was operating was allegedly
“owned and maintained by Gaffin” and “had been improperly modified/altered by
Gaffin” to shorten the barrel below the minimum required length and to remove or
render inoperable the “dead man control/catch on the trigger.” (Id., ¶¶ 12-14, 28.) The
complaint alleged that the gun was more dangerous as a result of these modifications,
which modification ultimately led to Williams’s death. (Id., ¶¶ 15, 28.) According to
the complaint, Williams lost control of the waterblasting gun while cleaning inside a
barometric seal tank, but the gun continued to emit a stream that lacerated his leg in
several places and severed his femoral artery, which led to his death. (Id., ¶ 28.) The
complaint alleged that PCS was directly negligent in failing to maintain its premises
and failing to provide Williams with proper protective personal equipment, a safe
waterblasting gun, and proper lighting. (Id., ¶ 35.) The complaint also alleged that
PCS was strictly liable for the “ultrahazardous” and “inherently dangerous” activity
Williams was performing for Gaffin. (Id., ¶¶ 37-43.) Although Gaffin was not a
defendant in the Second Amended Complaint, this claim for strict liability against PCS
included the allegation that Williams’s accident occurred “[a]s a direct and proximate
result of PCS Phosphate’s wrongdoing and/or the wrongdoing of Gaffin.” (Id., ¶ 43.)
The PCS v. Gaffin, ASSRG, ASIC Lawsuit
PCS tendered defense of the Williams lawsuit to Gaffin and its insurers,
American Safety Indemnity Company (“ASIC”) and ASRRG. (Doc. 53, Ex. Y; Doc. 65,
Ex. X.) PCS demanded defense and indemnity from Gaffin’s insurers as an additional
insured under Gaffin’s insurance policies. (Doc. 65, Ex. X.) ASIC and ASRRG denied
that the policies cover PCS as an additional insured and declined to offer a defense.
(Doc. 53, Ex. Y; Doc. 65, Ex. X.) Gaffin likewise refused to indemnify PCS. PCS filed
this action against ASRRG and ASIC alleging breach of contract for failure to defend
and indemnify PCS in the Williams lawsuit, and seeking a declaration that ASRRG
and ASIC had a duty to defend and indemnify PCS in that suit.2 (Doc. 1.) As noted
above, PCS settled with the plaintiff in the Williams lawsuit and paid a sum of money.
(See Docs. 31, 32.) Gaffin and its insurers contributed to the settlement payment.
(Williams, 3:10-cv-549-J-32JRK, Doc. 152 at 3 n.2.) PCS originally sued ASIC as
ASRRG’s excess carrier because the Williams lawsuit sought damages in excess of the
ASRRG policy’s limit of $1,000,000. (Doc. 52 at 2 n.2.) However, as part of the
settlement of the Williams lawsuit, PCS agreed to not seek recovery in this suit the
amounts paid to Lisa Williams, reserving its claim for attorneys’ fees and expenses.
Pursuant to a partial settlement with the other parties in this case, PCS is no longer
seeking indemnity for the sum it paid in the Williams settlement. (Id.) PCS seeks only
to recover its reasonable attorney’s fees and litigation expenses in defending the
Williams lawsuit. (Id.) Thus, PCS’s Motion for Summary Judgment as to ASRRG
“focuses only on ASRRG’s duty to defend which implicates PCS’s recovery of attorneys’
fees and costs incurred in defense of the Williams suit;” indemnification by ASRRG and
ASIC is no longer an issue. (Doc. 52 at 2 n.2.) ASRRG and ASIC agree the only issue
is whether ASRRG had a duty to defend PCS in the Williams lawsuit. (Doc. 76 at 2.)
The Purchase Order
PCS is in the business of mining phosphate and producing phosphoric acid and
operates a phosphoric acid plant in White Springs, Florida. (Doc. 53, Ex. A at 7-8.)
PCS also brings claims against Gaffin for indemnification and breach of
contract. (Doc. 1.) Those claims are the subject of a separate order filed
contemporaneously herewith. (Doc. 87.) Gaffin cross-claimed against ASRRG and
ASIC for breach of contract and declaratory relief. (Doc. 17.)
Gaffin uses waterblasting equipment to high pressure clean industrial facilities like
the White Springs plant. (Id., Ex. B at 106-07.) PCS hired Gaffin as a waterblasting
contractor to perform industrial waterblasting services at its White Springs facility in
June 2007. (Id., Ex. C at ¶ 7, Ex. D at 61; Doc. 65, Ex. C-1.) PCS issued to Gaffin
Purchase Order No. 50125964 (“Purchase Order”), dated June 5, 2007, for Gaffin to
“HIGH PRESSURE CLEAN FILTERS, REACTORS, PIPELINES AND ASSOCIATED
EQUIPMENT FOR SRC TURNAROUND.” (Doc. 65, Ex. C-1; Doc. 53, Ex. C at ¶ 8, Ex.
D at 61.) Pursuant to the Purchase Order, Gaffin was to “supply all labor, materials,
equipment, tools, supervision, insurance, and all items of expense necessary to safely
perform the ‘work.’” (Doc. 65, Ex. C-1.) Gaffin was responsible to ensure that its
employees complied with all safety rules and regulations, and “to exert primary
controls . . . to obtain desired performance from [its] employees.” (Id. at 14.) Paragraph
7 of the General Terms and Conditions of the Purchase Order required Gaffin to obtain
insurance coverage prior to commencement of any work, including “[c]ommercial
general liability insurance with a combined bodily/personal injury and property
damages limit of US $4,000,000 for each occurrence” and “[b]lanket contractual
liability insurance sufficiently broad to include paragraph 8 “INDEMNIFICATION.”
(Doc. 65-1 at 9 ¶ 7.) Paragraph 7 also required that PCS “shall be named additional
insured” on the commercial liability policy and that Gaffin must provide PCS with
certificates of insurance evidencing the required coverage prior to beginning the work.
(Id.) Gaffin performed the work required under the Purchase Order and was paid.
(Doc. 53, Ex. C at ¶ 9.)
Gaffin’s Insurance Policies
Gaffin purchased a commercial general liability insurance policy from ASRRG,
Policy No. 016484-07-01 (“CGL Policy”), with policy limits of $1,000,000 (Doc. 53, Ex.
F, Ex. G at 10-14), and an excess/umbrella liability policy from ASIC, Policy No.
ESU01644-07-01 (“Excess Policy”), with policy limits of $5,000,000 (Doc. 53, Ex. G at
14-16) (hereinafter collectively referred to as “Gaffin’s Insurance Policies”). LassiterWare Insurance, Gaffin’s insurance agent, issued a Certificate of Insurance indicating
that Gaffin had obtained a commercial general liability insurance policy. (Doc. 53, Ex.
I.) The Certificate of Insurance listed PCS as an “Additional Insured with respects [sic]
to General Liability and Automobile Liability as required by written contract.” (Id.)
PCS received this Certificate of Insurance and thereafter signed an Insurance Limits
Waiver indicating acceptance of Gaffin’s coverage and stating that an additional
insured provision had been provided. (Doc. 53, Ex. C at ¶ 10, Ex. C-3.)
The CGL Policy, effective May 25, 2007 through May 25, 2008, provides that
ASRRG “has the right and duty to defend the insured against any ‘suit’ seeking
damages” because of “‘bodily injury’ or ‘property damage’ to which [the] insurance
applies.” (Doc. 53, Ex. F at 1, 4.) The CGL Policy includes a General Amendatory
Endorsement Broad Form (the “Endorsement”) incorporating two additional coverage
paragraphs, subparagraphs f. and g. (Id. at 29.) Subparagraph f. provides:
Any person shown as an Additional Insured on a certificate of insurance
issued by our authorized representative provided such person is required
to be named as an Additional Insured in a written contract with you,
shall be entitled to coverage hereunder solely for “claims” or “suits” for
“bodily injury” or “property damage” arising solely out of your
negligence. The limits of insurance provided to such Additional Insured
shall be limited to the lesser of the limits of insurance required in a
written contract with you, or the limits of insurance as described in
SECTION III - LIMITS OF INSURANCE under the policy. No obligation
for defense or indemnity under the policy is provided to any Additional
Insured for “claims” or “suits” directly or indirectly “arising from” the
status, actions or inaction, including (without limitation) for vicarious,
derivative or strict liability of said Additional Insured, its agents,
consultants, servants, contractors or subcontractors (other than the
Named Insured), except for the actions or inactions of the Named
(Id. (emphasis added).) Subparagraph g. provides:
We will have no duty to defend any insured, other than the Named
Insured, except when the sole allegation against that insured is vicarious
liability for the sole negligence of the Named Insured.
(Id. (emphasis added).) These paragraphs form the basis for PCS’s claim of coverage.
STANDARD OF REVIEW
Summary judgment is proper “when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show 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.” Josendis v. Wall to Wall Residence Repairs, Inc., 662
F.3d 1292, 1314 (11th Cir. 2011); Fed. R. Civ. P. 56(a), (c). The inquiry is “whether the
evidence presents a sufficient disagreement to require submission to a jury or whether
it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 251-52 (1986). Although all facts and reasonable inferences
must be viewed in the light most favorable to the nonmoving party, Ramos-Barrientos
v. Bland, 661 F.3d 587, 594 (11th Cir. 2011), “the nonmoving party cannot create a
genuine issue of material fact through speculation, conjecture, or evidence that is
‘merely colorable’ or ‘not significantly probative.’” Vega v. Invsco Grp., Ltd., 432 F.
App’x 867, 869-70 (11th Cir. 2011) (quoting Anderson, 477 U.S. at 249-50). “When the
only question a court must decide is a question of law, summary judgment may be
granted.” Saregama India Ltd. v. Mosley, 635 F.3d 1284, 1290 (11th Cir. 2011).
Contract interpretation, including whether it is ambiguous, is a question of law. Id.
“Cross motions for summary judgment do not change the standard.”
Perez-Santiago v. Volusia Cnty., No. 6:08-cv-1868-Orl-28KRS, 2010 WL 917872, at *2
(M.D. Fla. Mar. 11, 2010) (quoting Latin Am. Music Co. v. Archdiocese of San Juan of
the Roman Catholic & Apostolic Church, 499 F.3d 32, 38 (1st Cir. 2007)) (internal
quotation marks omitted). “Cross motions for summary judgment are to be treated
separately; the denial of one does not require the grant of another.” Perez-Santiago,
2010 WL 917872 at *2 (citations and internal quotations omitted). When considering
cross-motions for summary judgment, the Court must “consider and rule upon each
party’s motion separately and determine whether summary judgment is appropriate
as to each under the Rule 56 standard.” Monumental Paving & Excavating, Inc. v. Pa.
Mfrs.’ Ass’n Ins. Co., 176 F.3d 794, 797 (4th Cir. 1999) (citations omitted).
ASRRG’s Duty to Defend PCS
PCS seeks to recover damages for ASRRG’s alleged breach of a duty to defend
PCS in the Williams lawsuit. ASRRG contends that it had no duty to defend PCS
because PCS is not an “Additional Insured” under the CGL Policy. Additionally,
ASRRG argues that even if PCS is an Additional Insured, the policy’s coverage is
limited only to claims against the Additional Insured when the sole allegation against
PCS is vicarious liability for Gaffin’s sole negligence.
Both parties agree that under Florida law, an insurer’s “duty to defend an
insured is determined solely from the allegations in the complaint against the insured,
not by the true facts of the cause of action against the insured, the insured’s version
of the facts or the insured’s defenses.” State Farm Fire & Cas. Co. v. Steinberg, 393
F.3d 1226, 1230 (11th Cir. 2004) (citation omitted); Nat’l Union Fire Ins. Co. v. Lenox
Liquors, Inc., 358 So. 2d 533, 535 (Fla. 1977). “If the allegations in the complaint state
facts that bring the injury within the policy’s coverage, the insurer must defend
regardless of the merits of the lawsuit. Furthermore, any doubt about the duty to
defend must be resolved in favor of the insured. Coverage is determined from
examining the most recent amended pleading, not the original pleading.” Steinberg,
393 F.3d at 1230; see also Jones v. Florida Ins. Guar. Ass’n, Inc., 908 So. 2d 435,
442-43 (Fla. 2005) (“It 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 first question is whether PCS is an Additional Insured under the CGL
Policy. ASRRG argues that PCS does not qualify as an Additional Insured because
PCS is not specifically named as an additional insured in the CGL Policy or pursuant
to any additional insured endorsement. (Doc. 76 at 12.) The Endorsement, however,
extends coverage to “[a]ny person shown as an Additional Insured on a certificate of
insurance issued by our authorized representative provided such person is required to
be named as an Additional Insured in a written contract with [Gaffin].” (Doc. 53, Ex.
F at 29.) PCS is listed as an “Additional Insured” on the certificate of insurance issued
by an authorized representative, Lassiter Ware Insurance (see Docs. 52-12, 53-13), and
Paragraph 7 of the Purchase Order provides that PCS “must be named additional
insured” on the CGL Policy (see Doc. 65-1 at 9 ¶ 7). PCS qualifies as an Additional
Insured for the purposes of the CGL Policy.3
The second question is whether the allegations in the Williams lawsuit fall fairly
and potentially within the coverage extended to Additional Insureds such that ASRRG
must defend PCS. To answer this question, the Court looks to the allegations in the
Second Amended Complaint and the language of the CGL Policy. The pertinent part
of the Endorsement extends coverage to an Additional Insured “solely for ‘claims’ or
‘suits’ for ‘bodily injury’ or ‘property damage’ arising solely out of [Gaffin’s] negligence.”
(Doc. 53, Ex. F at ¶ f.) “No obligation for defense or indemnity under the policy is
provided to any Additional Insured for ‘claims’ or ‘suits’ directly or indirectly ‘arising
from’ the status, actions or inaction, including (without limitation) for vicarious,
derivative or strict liability of said Additional Insured . . . except for the actions or
That PCS signed an Insurance Limits Waiver accepting as adequate the
$1,000,000 policy limits in the CGL Policy and the $5,000,000 policy limits in the
Excess Policy does not modify the contractual requirement in the Purchase Order that
PCS be named as an additional insured on Gaffin’s Insurance Policies.
inactions of the Named Insured.” (Id.) Furthermore, under subparagraph g., ASRRG
has no duty to defend “any insured, other than the Named Insured, except when the
sole allegation against that insured is vicarious liability for the sole negligence of the
Named Insured.” (Id. at ¶ g.)
Here, the “sole allegation” against PCS in the Williams lawsuit was not for the
“sole negligence” of Gaffin. Instead, the Second Amended Complaint in the Williams
lawsuit contains two counts against PCS: Count I for its direct negligence and Count
II for “Strict Liability for Ultra-Hazardous/Inherently Dangerous Activity.” (Doc. 53,
Ex. W at ¶¶ 32-43.) PCS and ASRRG disagree as to whether Count II alleges a claim
against PCS for the sole negligence of Gaffin or the joint negligence of PCS and Gaffin.
(Compare Doc. 52 at 10-12; Doc. 79 at 4-5 with Doc. 76 at 13-14; Doc. 82 at 4-5.) Even
accepting PCS’s view arguendo that Count II is only based on PCS’s vicarious liability
for the sole negligence of Gaffin, Count II is not the sole allegation against PCS in the
Williams lawsuit. Instead, PCS concedes, as it must, that Count I is a claim against
PCS for its direct negligence in allegedly failing to maintain its premises and provide
Williams with proper equipment and lighting. (See Doc. 79 at 2; Doc. 53, Ex. W at ¶¶
32-36.) So, while it is true that an insurer has a duty to defend the entire action even
where the complaint alleges facts partially within and partially outside of coverage,
C.A. Fielland, Inc. v. Fid. & Cas. Co. of N.Y., 297 So. 2d 122, 127 (Fla. 2d DCA 1974),
under the plain language of subparagraph g. of the CGL Policy, no part of the Williams
lawsuit would implicate coverage unless “the sole allegation against [PCS] is vicarious
liability for the sole negligence of [Gaffin]” (Doc. 53, Ex. F at ¶ g). Because of Count
I, that was not the case. See Atkins v. Bellefonte Ins. Co., 342 So. 2d 837, 838 (Fla.
3d DCA 1977) (“The insurance contract determines the conditions and limits of
coverage unless its provisions are contrary to law.” (citations omitted)).
PCS argues that subparagraphs f. and g. of the GCL Policy are ambiguous.
(Doc. 52 at 12-13.) PCS contends that “[t]he first sentence of subparagraph f. and
subparagraph g. limit ASRRG’s duty to cover an Additional Insured to claims or suits
arising from Gaffin’s ‘sole negligence.’ But the third sentence of subparagraph f. does
not include the same limitation.” (Id.) PCS reads the third sentence to provide broader
coverage requiring ASRRG to “defend or indemnify an Additional Insured for claims
or suits for the actions or inactions of Gaffin, without regard to whether Gaffin was
solely negligent or jointly negligent.” (Id. at 13.)
“Florida courts start with ‘the plain language of the policy, as bargained for by
the parties.’” Steinberg, 292 F.3d at 1230 (quoting Auto-Owners Ins. Co. v. Anderson,
756 So. 2d 29, 34 (Fla. 2000)). “If that language is unambiguous, it governs. If the
relevant policy language is susceptible to more than one reasonable interpretation, one
providing coverage and the other limiting coverage, the insurance policy is considered
‘ambiguous,’ and must be ‘interpreted liberally in favor of the insured and strictly
against the drafter who prepared the policy.’” Id.
The Court finds the language in subparagraphs f. and g. unambiguous. See
Continental Cas. Co. v. Am. Safety Cas. Ins. Co., 365 S.W. 3d 165, 170 (Tex. App. 2012)
(construing identical policy language and concluding that “the policy unambiguously
provides defense coverage to [additional insured] only in the event that [additional
insured] is alleged to be vicariously liable for [named insured’s] own sole negligence.”)
The first sentence of subparagraph f. sets out the limited coverage for an Additional
Insured for claims arising solely out of Gaffin’s negligence. The third sentence of
subparagraph f. then explains that this limited coverage only includes claims or suits
arising from the actions or inaction of Gaffin; it simply clarifies that ASRRG owes no
defense or indemnification for the “status, actions or inaction” of anyone other than
Gaffin. Subparagraph g. acts as a further limit on ASRRG’s duty to defend any insured
other than Gaffin by restricting the duty to defend to claims where the sole allegation
against that insured is vicarious liability for the sole negligence of Gaffin. The plain
language of these repeated limitations is not susceptible to any reasonable
interpretation whereby ASRRG owes a duty to defend PCS under the allegations of the
Second Amended Complaint in the Williams lawsuit.
Under the plain language of the CGL Policy, ASRRG did not owe a duty to
defend PCS in the Williams lawsuit and, therefore, did not breach any contract with
PCS by failing to do so. The Court will enter judgment for ASRRG on Counts III and
IV after the conclusion of all remaining issues in this case.
Accordingly, it is hereby
White Springs Agricultural Chemicals, Inc’s Motion for Summary
Judgment As To Defendant American Safety Risk Retention Group, Inc. (Doc. 52) is
American Safety Risk Retention Group, Inc.’s Cross Motion for Summary
Judgment (Doc. 76) is GRANTED.
DONE AND ORDERED at Jacksonville, Florida, on this 6th day of March,
Counsel of Record
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