White Springs Agricultural Chemicals, Inc. v. Gaffin Industrial Services, Inc. et al
Filing
87
ORDER granting in part, denying in part, and deferring in part 51 White Springs Agricultural Chemicals, Inc's Motion for Summary Judgment As To Defendant Gaffin Industrial Services, Inc; granting in part, denying in part, and deferring in part 75 Gaffin Industrial Services, Inc.'s Cross Motion for Summary Judgment. No later than 3/31/2014, the parties should file a joint notice advising the Court how they propose to proceed with the remaining issues, including whether further settlement efforts should now be undertaken. Signed by Judge Timothy J. Corrigan on 3/6/2014. (BJB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
WHITE SPRINGS AGRICULTURAL
CHEMICALS, INC. d/b/a PCS
PHOSPHATE - WHITE SPRINGS,
Plaintiff,
v.
Case No. 3:11-cv-998-J-32JRK
GAFFIN INDUSTRIAL SERVICES, INC.,
AMERICAN SAFETY RISK RETENTION
GROUP, INC., and AMERICAN SAFETY
INDEMNITY COMPANY.
Defendants.
ORDER
This case is before the Court on White Springs Agricultural Chemicals, Inc’s
(“PCS”) Motion for Summary Judgment As To Defendant Gaffin Industrial Services,
Inc. (“Gaffin”) (Doc. 51), to which Gaffin responded and cross moved for summary
judgment (Doc. 75). PCS has replied (Doc. 78). The Court considers the parties’ briefs
and accompanying exhibits (Docs. 53-72).
I.
BACKGROUND
A.
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
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.
(See
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’ death. (Id., ¶¶ 15, 28.) According to the
complaint, Williams lost control of the waterblasting gun while cleaning inside a
2
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’ accident occurred “[a]s a direct and proximate
result of PCS Phosphate’s wrongdoing and/or the wrongdoing of Gaffin.” (Id., ¶ 43.)
B.
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 American Safety Risk Retention
Group, Inc. (“ASRRG”). (Doc. 53, Ex. Y, Doc. 65, Ex. X.) PCS demanded a 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 Gaffin seeking
indemnification and alleging breach of contract for Gaffin’s failure to obtain adequate
insurance coverage and failure to provide indemnity to PCS in the Williams lawsuit.1
1
PCS also brings claims against Gaffin’s insurer’s, ASIC and ASRRG, for
breach of contract and declaratory relief. (Doc. 1.) Those claims are the subject of a
separate order filed contemporaneously herewith. (Doc. 86.) Gaffin cross-claimed
3
(Doc. 1, Counts I and II.) 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.) Pursuant to a partial settlement with the other parties in this case, PCS is no
longer seeking to recover the settlement money it paid to the plaintiff in Williams.
(Doc. 51 at 17.) PCS seeks only to recover its reasonable attorney’s fees and litigation
expenses in defending the Williams lawsuit. (Id.) PCS’s claims against Gaffin are
based on its contention that the indemnification clause in a purchase order PCS issued
to Gaffin requires Gaffin to indemnify and hold PCS harmless for any bodily injury,
including death, connected to Gaffin’s work for PCS, unless the bodily injury or death
results from the “sole negligence or willful misconduct” of PCS. (Doc. 51 at 13.)
C.
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.)
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.
against ASRRG and ASIC for breach of contract and declaratory relief. (Doc. 17.)
4
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 “must 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.)
Paragraph 8 of the General Terms and Conditions of the Purchase Order on
“INDEMNIFICATION” includes the following language:
CONTRACTOR SHALL INDEMNIFY AND HOLD HARMLESS
OWNER, ITS AFFILIATES, EMPLOYEES AND AGENTS AGAINST
ALL CLAIMS, LIABILITIES, LOSSES, DAMAGES AND EXPENSES
(OF EVERY CHARACTER WHATSOEVER) FOR BODILY INJURY,
SICKNESS, DISEASE, AND/ OR DEATH . . . SUSTAINED BY ANY
PERSON (INCLUDING BUT NOT LIMITED TO EMPLOYEES OF
OWNER, CONTRACTOR OR ANY SUBCONTRACTOR) IF SUCH
INJURY, SICKNESS, DISEASE, AND/ OR DEATH ... IS IN ANY WAY
CONNECTED WITH THE WORK, OR WITH THE PERFORMANCE OR
FAILURE TO PERFORM THE WORK, AND UNLESS IT RESULTS
FROM THE SOLE NEGLIGENCE OR WILLFUL MISCONDUCT OF
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OWNER.
(Doc. 65, Ex. C-1 at 9 ¶ 8.) This Indemnification Clause also includes a “Notice
Required By Texas Express Negligence Rule” stating:
CONTRACTOR ACKNOWLEDGES THAT ITS LIABILITY AND
INDEMNITY OBLIGATIONS UNDER THIS PARAGRAPH SHALL BE
WITHOUT REGARD TO THE NEGLIGENCE OF OWNER, WHEN
OWNER’S NEGLIGENCE IS A JOINT, CONCURRENT, OR PARTIAL
(BUT NOT SOLE) CAUSE OF THE INCIDENT, OCCURRENCE OR
RESULTING LOSS, DAMAGE, DESTRUCTION, INJURY, SICKNESS,
DISEASE OR DEATH, AND WITHOUT MONETARY LIMIT TO THE
EXTENT PERMITTED BY LAW.
(Id.)
D.
Gaffin’s Insurance Policies
Prior to commencing work, 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) (collectively referred to here as “Gaffin’s Insurance
Policies”). Lassiter-Ware 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 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 ¶
6
10, Ex. C-3.) However, after Robert Williams died, ASRRG and ASIC denied that PCS
was covered as an additional insured and refused to defend or indemnify it in the
Williams lawsuit.
E.
Gaffin’s Work At PCS’s White Springs Facility2
Williams’s accident occurred during the night shift that began in the evening of
June 10, 2007 and lasted into the morning of June 11, 2007. (Doc. 53, Ex. B at 16-24.)
That night, Gaffin’s employees were performing work at multiple locations at the
facility, and other contractors were working on site. (Doc. 53, Ex. J at ¶ 4, Ex. K at 8.)
On the day of the accident, PCS gave Gaffin a list of vessels that needed cleaning. (Doc.
53, Ex. K at 20- 21.) According to Mark Alvarez, the lead Gaffin supervisor on the
night of the accident, the timing, scheduling, manner, and method of cleaning the
vessels was up to Gaffin. (Id.) Gaffin assigned a crew that included Williams, Gerald
Duffy, and Fred Carter to clean the inside of the Barometric Condenser Seal Tank, also
known as the “Flash Cooler” or the “Hot Well Tank.” (Doc. 53, Ex. K at 20-21; see also
Doc. 53, Ex. L.) Williams was an experienced waterblaster who had worked for Gaffin
since 2003. (Doc. 53, Ex. A at 37-38, Ex. B at 50-54, Ex. D at 122.)
1.
Gaffin Did Not Use 3D Waterblasting
The Purchase Order did not specify or direct what method of waterblasting
Gaffin should use on the Hot Well Tank or any other facility. But it did specify that
Gaffin would provide all equipment, which would include all waterblasting equipment
2
Gaffin’s response does not dispute any of the following facts and actually
repeats verbatim some of the statements in the “Statement of Undisputed Facts” in
PCS’s motion. (Compare Doc. 51 at 3-7, 12-13 with Doc. 75 at 2-4, 5-7.)
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and personal protective equipment. (Doc. 65, Ex. C-1.) According to Mark Gaffin and
Dan McCleary, co-owners of Gaffin, and to Alvarez, Gaffin was aware of 3D
waterblasting technology and owned a 3D system called the “Hurricane” system that
would allow an operator to lower a nozzle into a confined space from the top, without
entering the tanks, with high pressure streams spraying in every direction. (Doc. 53,
Ex. D at 63-65, Ex. A at 39-40, Ex. K at 12, 14.) According to Mark Gaffin, it was
Gaffin’s decision, not PCS’s, whether to use 3D waterblasting technology on a
particular job.
(Doc. 53, Ex. D at 65; Doc. 57-1 at 351-52.)
In particular, the
supervisors on the job – in this case Duffy or Alvarez – would make the decision
whether to use 3D water blasting as opposed to manual. (Doc. 53, Ex. D at 70.) Gaffin
did not use 3D technology to clean the Hot Well Tank on the night of the accident, but
instead used manual waterblasting equipment with a man inside the tank. (Doc. 53,
Ex. K at 18-19.)
2.
Gaffin Had Modified the Waterblasting Gun
Gaffin supplied all equipment for the job, including the waterblasting gun,
lighting, and personal protective equipment used by Williams. (Doc. 53, Ex. B at
156-157.) The gun Williams used to clean the inside of the Hot Well Tank was a
yellow-handled gun manufactured by JetStream. (Doc. 53, Ex. K at 52-53, Ex. B at 45,
Ex. M at 19-25.) Directly on the yellow handle were the warnings: “DANGER DO NOT
SHORTEN BARREL MIN 48 INCH FRONT BARREL LENGTH;” and “DANGER USE
MINIMUM 48 INCH FRONT AND 14 INCH REAR BARREL.” (Doc. 53, Ex. Q.)
According to Gaffin’s employees, this warning was apparent on the gun’s handle, and
8
Gaffin employees were aware of the warnings. (Doc. 53, Ex. B at 97-98, Ex. K at
144-45.) Gaffin also received literature with each waterblasting gun from JetStream,
which said, in pertinent part: “WARNING: A 48” long discharge barrel MUST be used
on handheld control guns to prevent nozzle discharge from accidentally striking the
operator’s feet, legs or body. DO NOT USE A HANDHELD CONTROL GUN IF ITS
NOZZLE DISCHARGE CAN ACCIDENTLY STRIKE OPERATOR’S BODY.” (Doc. 53,
Ex. P, Ex. N at 39, Ex. A at 106-07.) McCleary, who was in charge of operations at
Gaffin, admitted that, before the accident, Gaffin knew of the warnings not to shorten
the gun. (Doc. 53, Ex. A at 106-07, Ex. D at 8.) In spite of these warnings, Gaffin
shortened the front barrel of the yellow-handled waterblasting gun to approximately
28 inches. (Doc. 53, Ex. A at 86-87, Ex. Q.) According to Mark Gaffin, it was not his
decision to shorten the barrels for a particular job, but he knew it had occurred. (Doc.
53, Ex. D at 84.) There is no evidence that PCS knew before the accident that Gaffin
had shortened the barrels of its waterblasting guns. (Doc. 53, Ex. A at 68, Ex. K at 57,
60, Ex. J at ¶ 13.)
At their depositions, JetStream employees demonstrated the method JetStream
recommends for using its waterblasting guns with full-length, unshortened barrels.
(See Doc. 53, Ex. N at 66-70, Ex. O at 20-25, Ex. R.) The gun depicted in the video at
Exhibit R is the same model that Williams was using, in the condition it would have
been shipped to Gaffin. (Id.) As demonstrated in the video, the manufacturer’s
recommended barrel length provides a geometric protection from the risk of injury from
the waterblasting gun’s stream. (See Doc. 53, Ex. R., see also Ex. S, Ex. S-1.) That is,
9
at the recommended length, it would be impossible for a person of Williams’ height to
aim the gun at his lower extremities while operating it. (Doc. 53, Ex. S-1.) But the
shortening of the barrel made it possible for Williams to shoot himself in the leg. (Id.)
Since the accident, Gaffin no longer shortens the barrels of waterblasting guns. (Doc.
59 at 127-28.) Before the accident, Gaffin had made other modifications to the barrel
that increased the thrust of the yellow-handled waterblasting gun. (Doc. 53, Ex. S-1.)
Dr. David Summers, a waterblasting expert, personally examined the waterblasting
gun and determined that the gun as used by Williams would have caused a back thrust
of 93.5 lbs. (Id.) Industry standards call for a maximum thrust of one-third the body
weight of the user. (Id.; Doc. 53, Ex. R) For a person of Williams’ weight, the
maximum back-thrust should have been approximately 72 lbs. (Id.)
H.
The Accident
Williams began waterblasting the north side of the Hot Well Tank at around
9:00 P.M. (Doc. 53, Ex. B at 17-18.) He finished descaling the north side of the tank,
took a break, and then started cleaning the south side of the tank. (Id.) Shortly after
midnight, Williams was working inside the tank, when Duffy and Carter heard a yell
from inside of the tank. (Id. at 22-23.) Williams crawled out of the tank and said, “I hit
my damn leg . . . the damn gun got stuck.” (Id. at 24.) Bristol and Alvarez arrived on
the scene as Williams was crawling out of the tank, and attempted to administer first
aid. (Doc. 53, Ex. K at 27, Ex. J at ¶ 12.) The stream from the waterblasting gun,
operating at an estimated 9,500 psi, struck Williams’ right inner thigh, just above the
knee, severing his femoral artery and causing him to lose massive amounts of blood.
10
(Ex. T.) He lost consciousness within minutes after crawling out of the tank and died
before reaching the hospital. (Id.; Doc. 53, Ex. K at 29.) The cause of death listed on
the Autopsy Report is hypovolemic shock. (Ex. T.)
OSHA started investigating the accident the same day. (See Doc. 53, Ex. U at
3.) OSHA found that Gaffin violated OSHA regulations by shortening the barrel of the
waterblasting gun, a hazard which caused or was “likely to cause death or serious
physical harm” to Gaffin’s employees, and issued a “Willful” citation to Gaffin on
December 4, 2007. (See Doc. 53, Ex. D at 102-03; Ex. U.) OSHA changed the violation
type from “Willful” to “Serious” as part of a settlement agreement with Gaffin. (Id.)
II.
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.
11
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).
III.
DISCUSSION
A.
Gaffin’s Duty to Indemnify PCS for the Williams Lawsuit
PCS contends that its agreement with Gaffin requires Gaffin to indemnify and
hold PCS harmless for any bodily injury, including death, connected to Gaffin’s work
for PCS, unless the bodily injury or death results from the “sole negligence or willful
misconduct” of PCS. (Doc. 51 at 13.) PCS argues that it is undisputed, based on the
allegations in the Williams lawsuit and the facts developed in discovery, that Williams’
12
death did not result from PCS’s sole negligence or willful misconduct, but, at most, as
the result of joint negligence. (Id. at 14.)
Gaffin does not dispute that pursuant to the Purchase Order, it agreed to
indemnify PCS except for PCS’s sole negligence. (Doc. 75 at 8.) Nor does Gaffin
dispute that Williams’ death was “connected” with the performance of Gaffin’s work
under the contract. Indeed, Williams’ was fatally injured performing the work PCS
hired Gaffin to do. Instead, Gaffin argues that the allegations in the underlying
Williams lawsuit were only for PCS’s sole negligence, not for any negligence of Gaffin;
thus, Gaffin is not obligated to indemnify PCS. Gaffin contends that the Court should
look only at the allegations of the complaint in the Williams lawsuit,3 and does not
attempt to dispute the underlying facts related to Gaffin’s actions. (See id. at 7.)
Contracts that attempt to indemnify a party against its own negligence are
disfavored in Florida law. Charles Poe Masonry v. Spring Lock Scaffolding Rental
Equip. Co., 374 So. 2d 487, 489 (Fla.1979). Thus, “in order for the indemnity contract
to be construed as allowing indemnification for the indemnitee’s own negligence, that
intention must be expressed in clear and unequivocal terms.” Florida Power & Light
Co. v. Mid-Valley, Inc., 763 F.2d 1316, 1318 (11th Cir. 1985) (citing Univ. Plaza
Shopping Ctr., Inc. v. Stewart, 272 So. 2d 507, 509 (Fla. 1973)). The language in the
Indemnification Clause—“unless it results from the sole negligence”—clearly expresses
Gaffin’s intent to indemnify PCS for the joint negligence of PCS and Gaffin or PCS and
3
Gaffin bases this contention upon an apparent misunderstanding that PCS
seeks to impose a duty to defend, rather than a duty to indemnify. (Doc. 75 at 7; see
Doc. 78 at 2.)
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JetStream. United Parcel Serv. of Am., Inc. v. Enforcement Sec. Corp., 525 So. 2d 424,
426 (Fla. 1st DCA 1987) (holding that the language “except from and against all losses,
damages, expense, etc., as set forth hereinabove, arising out of the sole negligence of
UPS” sufficiently manifests the lessee’s “unequivocal intent” to indemnify the lessor
for the joint negligence of the lessor and lessee). Moreover, the Notice Required By
Texas Express Negligence Rule provision of the Indemnification Clause states that
Gaffin’s indemnity obligation is “without regard to the negligence of [PCS], when
[PCS’s] negligence is a joint, concurrent, or partial (but not sole) cause of the incident.”
(Doc. 65, Ex. C-1 at 9, ¶ 8.)
Under Florida law, “a party seeking indemnification [after a settlement] must
establish that the settlement was made based on his potential liability to the plaintiff.
A showing of ‘potential liability’ is required because the indemnitee must not be a mere
volunteer who has settled the underlying claim when there was no exposure to legal
liability that obligated him or her to do so.” Camp, Dresser & McKee, Inc. v. Paul N.
Howard Co., 853 So. 2d 1072, 1079-80 (Fla. 5th DCA 2003); United Rentals, Inc. v.
Mid-Continent Cas. Co., 11-80955-CIV, 2013 WL 1296313, *2 (S.D. Fla. Mar. 26, 2013).
A showing of actual liability is only required if the indemnitor is not given notice and
an opportunity to assume the defense or responsibility of the underlying plaintiff’s
claim. Camp, Dresser & McKee, Inc., 853 So. 2d at 1080. There is no issue of notice
or opportunity to defend here, since Gaffin actually participated in the settlement of
the Williams lawsuit by contributing to the settlement amount. Thus, PCS must only
demonstrate that it was potentially liable to the plaintiff in the Williams lawsuit.
14
Courts in Florida look to the actual facts, rather than the allegations in the
underlying case, to determine whether a duty to indemnify exists. CSX Transp., Inc.
v. Becker Sand & Gravel Co., 576 So. 2d 902, 904 (Fla. 1st DCA 1991) (“It is the
indemnitee’s actual wrongdoing or lack of it, rather than the allegations of wrongdoing,
which determine the indemnitee’s rights.); Am. Home Ins. Co. v. City of Opa-locka, 368
So. 2d 416, 419 (Fla. 3d DCA 1979).
The facts developed through discovery make clear that PCS’s potential liability
was not based solely on its own alleged negligence, but also some negligence on the
part of Gaffin, solely or jointly, that likely caused or contributed to Williams’s injury
and death and for which PCS could have been liable under Florida law. See Metro.
Dade Cnty. v. Fla. Aviation Fueling, Co., Inc., 578 So. 2d 296, 299 n.4 (Fla. 3d DCA
1991) (rehr’g denied May 1, 1991) (finding vicarious liability claim potentially viable
because the indemnitor was arguably engaged in an ultrahazardous activity causally
related to the plaintiff’s injuries). Gaffin failed to use 3D waterblasting. Gaffin
shortened the gun contrary the manufacturer’s warnings. Gaffin operated the gun
with too high a back thrust. Gaffin does not dispute these facts.4 Had Gaffin used a
3D gun, Williams would not have been inside the tank. Had Williams been using a
gun at the length recommended by the manufacturer, he likely could not have hit his
leg with the water blast. Thus, the undisputed evidence establishes that PCS had
4
There is testimony indicating that it may have been more difficult or even
impossible to clean the Hot Well Tank with a 48-inch gun, and it is questionable
whether a 3D gun could be used on that tank either. (See Doc. 56-1 at 97-105 at Doc.
53, Ex. D at 65-66, Ex. K at 18-19.) Nevertheless, for indemnity to kick in, PCS need
only prove its potential liability for some potential negligence by Gaffin.
15
potential vicarious liability for some of Gaffin’s negligence, rather than solely for its
own.
Even were the Court to consider only the allegations in the Williams lawsuit, as
Gaffin urges, and not the actual facts, at least one count of the Williams complaint still
qualifies for coverage under the Indemnification Clause as one not arising solely out
of PCS’s negligence. Gaffin may not have been a party by the time the Williams
lawsuit reached the Second Amended Complaint, but Count II for strict liability
against PCS for ultrahazardous/inherently dangerous activity is based, at least in part,
on PCS’s alleged vicarious liability for Gaffin’s actions. (Doc. 53, Ex. W, ¶¶ 37-43); see
Gyongyosi v. Miller, 80 So. 3d 1070, 1076 (Fla. 4th DCA 2012) (“Florida courts allow
for employers to be held vicariously liable for an independent contractor’s negligence
under the inherently dangerous activities doctrine.”) (citing Am. Home Assurance Co.
v. Nat’l R.R. Passenger Corp., 908 So. 2d 459, 468 (Fla. 2005)), reh'g denied (Mar. 23,
2012), review denied, 109 So. 3d 780 (Fla. 2013).
Indeed, many of the factual
allegations in the complaint were based on the acts or omissions of Gaffin. (See, e.g.,
id. at ¶¶ 12-15.) So the allegations in the complaint were not strictly limited to the sole
negligence of PCS alone.
Thus, both the allegations of the Second Amended Complaint and the
undisputed facts in the Williams lawsuit demonstrate that Williams’ injuries did not
result from the sole negligence or willful misconduct of PCS and that PCS’s potentially
liability was also based on Gaffin’s actions or inactions.
Therefore, Gaffin is
contractually obligated to indemnify and hold harmless PCS for the Williams lawsuit
16
under the terms of the Purchase Order. The Purchase Order includes indemnification
for “ALL CLAIMS LIABILITIES, LOSSES, DAMAGES, AND EXPENSES (OF EVERY
CHARACTER WHATSOEVER).” (Doc. 65, Ex. C-1 at 9, ¶ 8.) This language includes
reasonable attorney’s fees and expenses incurred by PCS in defending the Williams
lawsuit. See Natco Ltd. P’ship v. Moran Towing of Florida, Inc., 267 F.3d 1190, 1194
(11th Cir. 2001) (finding that the phrase “any and all loss, damage or liability” in an
indemnity provision encompasses attorney’s fees even though attorney’s fees were not
specifically mentioned). PCS’s motion for summary judgment against Gaffin on Count
I of the complaint is due to be granted and Gaffin’s cross motion is due to be denied.
B.
Gaffin’s Breach of Contract to Procure Insurance Coverage
PCS also claims that Gaffin breached its contract with PCS by failing to procure
insurance coverage that (1) named PCS as an additional insured and (2) was sufficient
to cover the Indemnification Clause. (Doc. 51 at 2, 18-20.) Gaffin responds that it
intended to, and thought it had, procured a policy that did both. (Doc. 75 at 9-12.)
Paragraph 7 of the General Terms and Conditions of the Purchase Order
required that PCS “shall be named additional insured” on the Gaffin’s commercial
general liability policy. (Doc. 65-1 at 9, ¶ 7.) As discussed in more detail in the Court’s
separate order on PCS and ASRRG’s cross motions for summary judgment, PCS does
qualify as an additional insured on Gaffin’s insurance policies. (Doc. 86 at 9-10.) Thus,
to the extent PCS’s motion is based on Gaffin’s alleged failure to procure an insurance
policy with PCS as an additional insured, the motion is due to be denied.
17
PCS’ motion also briefly contends, without any argument, that Gaffin breached
its obligation under paragraph 7 of the General Terms and Conditions to procure a
policy that includes “[b]lanket contractual liability insurance sufficiently broad to
include” Gaffin’s indemnification obligation. (Doc. 51 at 2, 19-10; see Doc. 65-1 at 9,
¶ 7.) For the reasons discussed above, Gaffin does owe PCS indemnity for the Williams
lawsuit. However, the Court agrees with PCS that whether Gaffin’s insurance policies
cover its contractual indemnity obligation is best addressed along with Gaffin’s crossclaim against its insurers. (See Doc. 51 at 2 n.2, 20.) The Court thus defers for further
consideration that portion of PCS’s motion seeking summary judgment on Count II
based on Gaffin’s alleged failure to procure insurance coextensive with its indemnity
obligation.5
Accordingly, it is hereby
ORDERED:
1.
White Springs Agricultural Chemicals, Inc’s Motion for Summary
Judgment As To Defendant Gaffin Industrial Services, Inc. (Doc. 51) is GRANTED in
part, DENIED in part, and DEFERRED in part to the extent set forth above.
2.
Gaffin Industrial Services, Inc.’s Cross Motion for Summary Judgment
(Doc. 75) is DENIED in part and DEFERRED in part to the extent set forth above.
3.
No later than March 31, 2014 the parties should file a joint notice
5
By entering this Order, the Court does not prejudge any issue between Gaffin
and its insurers regarding insurance coverage.
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advising the Court how they propose to proceed with the remaining issues in this case,
including whether further settlement efforts should now be undertaken. The Court
will not enter final judgment until all issues have been resolved.
DONE AND ORDERED at Jacksonville, Florida, on this 6th day of March,
2014.
bjb.
Copies:
Counsel of Record
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