Rockhill Insurance Company v. Briar Oak at Oakleaf Plantation Townhomes Owners' Association, Inc. et al
ORDER granting 32 Motion for summary judgment; denying 39 Motion for summary judgment. By separate Order, the Court will enter judgment in favor of Defendant Northfield and against Plaintiff Rockhill. After judgment has been entered, the Clerk shall terminate all pending motions and deadlines and close the file. Signed by Judge Timothy J. Corrigan on 11/8/2017. (JJB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
Case No. 3:15-cv-1419-J-32MCR
This case is about which insurance company is better at writing a broad
“other insurance” provision, one suitable for all occasions, so that its coverage
becomes excess and the other insurer’s primary. 1 It is before the Court on the
parties’ cross motions for summary judgment. (Docs. 32, 39). Defendant
Northfield Insurance Company (“Northfield”) moved for summary judgment
(Doc. 32), Plaintiff Rockhill Insurance Company (“Rockhill”) filed an amended
Response (Doc. 42), and Northfield replied (Doc. 45). Rockhill also moved for
The Court is dubious whether this “arms race” (as Rockhill’s counsel
described it) to write continuously more expansive “other insurance” provisions
represents sound insurance law policy. Nevertheless, this Court’s task is
limited to interpreting the two insurance policies at hand.
summary judgment (Doc. 39), Northfield responded (Doc. 46), Rockhill replied
(Doc. 49), and Northfield filed a sur-reply (Doc. 52). On October 13, 2017, the
Court held a hearing on the motions, the record of which is incorporated herein.
This dispute between insurance companies concerns coverage priority in
relation to the settlement of a wrongful death suit. On November 10, 2010,
Leroy McDonald was shot and killed in the Briar Oaks at Oakleaf Plantation
townhome community (“the Community”) (Doc. 39-1), which is overseen by the
Briar Oaks at Oakleaf Plantation Townhomes Owners’ Association, Inc. (“Briar
Oaks”). (Doc. 11). On June 1, 2007, First Coast Association Management, LLC
(“First Coast”) entered into a contract with Briar Oaks to manage the
Community. (Doc. 39-6). This contract was in effect on November 10, 2010. Id.
On November 10, 2010, Briar Oaks had insurance coverage through Rockhill
(Doc. 39-4), and First Coast had insurance coverage through Northfield (Doc.
In 2012, Latasha McDonald, as the personal representative of the Estate
of Leroy McDonald, filed a wrongful death action against First Coast and Briar
Oaks (“Underlying Action”). (Doc. 11). In 2015, a jury trial returned a verdict in
favor of McDonald for $2,658,852, with First Coast and Briar Oaks jointly and
severally liable for 70% and Briar Oaks solely liable for 30%. (Doc 39-2).
Subsequently, the parties agreed to a settlement, paying Leroy McDonald’s
Estate $2,790,000, divided among three insurers. 2 (Doc. 39-3).
On June 30, 2016, Rockhill filed its First Amended Complaint
(“Complaint”) (Doc. 11), seeking a declaratory judgment determining the
priority of coverage for the Underlying Action, judgment to recover fees and
costs incurred in the Underlying Action, 3 and costs. (Doc. 11 at 4). Northfield
filed an answer and counterclaim seeking a declaratory judgment, attorney’s
fees, and costs. (Docs. 11, 21).
A. The Rockhill Policy
Rockhill issued businessowners’ policy THB001324-01 to Briar Oaks,
providing both first party property coverage and business liability coverage.
(Doc. 39 at 3). Section I of the policy explains the coverage for first party
property, Section II explains the coverage for business liability, and Section III
contains policy conditions common to Sections I and II. (Doc. 39 at 3). The policy
The settlement allocated the amount among the insurers as such:
Rockhill – $1,269,000; Northfield – $890,000; and AGLIC – $631,000. AGLIC
was an excess insurer and is not a party to the current suit.
The Complaint seeks to “recover the fees and costs incurred in
defending NORTHFIELD’S insured, FIRST COAST.” (Doc. 11). However, in its
motion for summary judgment, Rockhill seeks reimbursement from Northfield
to equalize their payments for the settlement. (Doc. 39 at 21). Because Florida
does not allow for recovery of attorney’s fees and costs when defending a mutual
insured, see Argonaut Insurance Co. v. Maryland Casualty Co., 372 So. 2d 960,
963 (Fla. 3d DCA 1979), the Court treats Rockhill’s claim as one for equitable
contribution regarding the settlement payments. (Doc. 39 at 21).
also contains multiple amendments, endorsements, exclusions, and limitations
in separate forms. (Doc. 39-4). The coverage provides up to $1 million per
occurrence as part of its liability and medical expense limit. (Doc. 39-4 at 4).
First Coast is an omnibus insured under the policy. 4 (Doc. 39-4 at 56). Section
III of the policy contains an “other insurance” provision, making the coverage
excess over other insurance in certain situations. (Doc. 39-4 at 63).
B. The Northfield Policy
Northfield issued First Coast a commercial policy numbered WS023188
that contains a liability limit of $1 million per occurrence. (Doc. 32 at 7). First
Coast is the sole named insured under the Northfield policy, and the parties
agree that Briar Oaks is not insured under that policy. (See Doc. 39 at 6). The
Northfield policy also contains an “other insurance” provision, a combination
endorsement to the “other insurance” provision, and a second endorsement. The
“other insurance” provision, as modified by the combination endorsement,
provides that the policy is excess over other valid and collectible insurance in
certain situations. This combination endorsement further states that if excess,
Northfield has no duty to defend the insured in any suit if another insurer has
“An ‘omnibus insured’ is one who is covered by a provision in the policy
but not specifically named or designated. Additionally, the rights of an ‘omnibus
insured’ flow directly from his or her status under a clause of the insurance
policy without regard to the issue of liability.” Cont’l Cas. Co. v. Ryan Inc. E.,
974 So. 2d 368, 374 (Fla. 2008) (citations and quotations omitted).
such a duty, and that Northfield will only pay the amount that exceeds the other
insurance coverage and deductibles. (Doc. 39-5 at 28, 39–40). The second
endorsement makes the coverage excess when the liability arises from First
Coast’s activities as a property manager.
STANDARD OF REVIEW
Upon review of cross motions for summary judgment, “the Court must
determine whether either party deserves judgment as a matter of law on the
undisputed facts.” T-Mobile S. LLC v. City of Jacksonville, 564 F. Supp. 2d 1337,
1340 (M.D. Fla. 2008). “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). Insurance contract interpretation is a
matter of law properly decided on summary judgment. LaMadrid v. Nat’l Union
Fire Ins. Co. of Pittsburgh, Pa., 567 F. App’x 695, 700 (11th Cir. 2014).
A. Jurisdictional Issues
This action is appropriately brought under 28 U.S.C. § 1332. 5 Both
parties seek declaratory relief pursuant to 28 U.S.C. §§ 2201 and 2202. When
Rockhill is an Arizona corporation with its principal place of business
in Missouri. Northfield is an Iowa corporation. The Complaint states that
Northfield’s principal place of business is Minnesota, and the insurance
contract lists a Minnesota address. (Doc. 11). However, the Answer (Doc. 21)
states that Northfield’s principal place of business is Connecticut. Either way,
the parties are diverse. The amount in controversy is alleged to be in excess of
the Complaint and Answer and Counterclaims were filed, the Underlying
Action had not yet settled. However, on January 11, 2017, the parties settled
the Underlying Action. At the October 13, 2017 hearing, the Court, citing
Housing Enterprise Insurance Co. v. AMTRUST Insurance Co., 212 F. Supp. 3d
1330, 1338 (N.D. Ga. 2016), expressed concern that it may not have jurisdiction
to provide declaratory relief. 6 The parties, at the request of the Court,
submitted a joint brief responding to the Court’s concerns. (Doc. 56).
In their Joint Brief on Jurisdiction and Notice Regarding Settlement, the
parties provide two reasons why this Court has jurisdiction. (Doc. 56). First, the
settlement agreement did not destroy jurisdiction to provide declaratory relief
because the settlement reserves the parties’ rights to maintain this action. (Doc.
56 at 1–5). The second reason is that the complaint could be liberally construed
to include a claim for equitable contribution over which the Court maintains
jurisdiction. (Doc. 56 at 5–6). Although the Complaint was unartfully drafted—
To meet the Article III standing requirement when seeking declaratory
relief, there must be a substantial likelihood that the plaintiff will suffer injury
in the future. Malowney v. Fed. Collection Deposit Grp., 193 F.3d 1342, 1346
(11th Cir. 1999). “Where an insurer has already paid out a claim under its
policy, and seeks contribution from a co-insurer for the expense, declaratory
relief concerning the priority of the insurers’ policies is unavailable because
such declaratory relief concerns only past events, not future injury.”
AMTRUST, 212 F. Supp. 3d at 1338 (citing Twin City Fire Ins. Co. v. Hartman,
Simons & Wood, LLP, 609 F. App’x 972, 979 (11th Cir. 2015)).
containing no counts, and titled “Plaintiff’s Amended Complaint for Declaratory
Relief”—the “wherefore” clause contains several requests for relief, at least one
of which can be construed as an equitable contribution claim. (Doc. 11 at 4). As
the Court agrees that the Complaint could be interpreted to include a claim for
equitable contribution and that the parties have a concrete dispute regarding
coverage, it retains jurisdiction. 7
B. Florida Law Governing the Interpretation of Insurance
Florida interprets insuring or coverage clauses in the broadest possible
manner to provide the greatest extent of coverage. Keenan Hopkins Schmidt &
Stowell Contractors, Inc. v. Cont’l Cas. Co., 653 F. Supp. 2d 1255, 1263 (M.D.
Fla. 2009). Courts view the policy “as a whole and give every provision its full
meaning and operative effect.” Trailer Bridge, Inc. v. Ill. Nat. Ins. Co., 657 F.3d
1135, 1141 (11th Cir. 2011) (quotations omitted). The policies are interpreted
according to their plain meaning, but if ambiguities exist they are construed to
As the Court has jurisdiction over a claim for equitable contribution, it
need not address the parties’ other jurisdictional arguments involving the
Federal courts sitting in diversity apply the choice of law rules of the
forum State. Rando v. Gov’t Emps. Ins. Co., 556 F.3d 1173, 1176 (11th Cir.
2009). For contracts, Florida follows the lex loci contractus standard, meaning
that the place of contracting is the law that governs the contract. Id. Both
insurance policies appear to have been signed in Florida, and the parties have
not introduced any evidence to the contrary.
favor coverage. Id. Policy language is ambiguous when it is susceptible to
multiple reasonable interpretations. Pac. Emp’rs Ins. Co. v. Wausau Bus. Ins.
Co., 508 F. Supp. 2d 1167, 1175 (M.D. Fla. 2007). Undefined words or phrases
should be given their common everyday meaning. Id. “Although exclusionary
clauses cannot be relied upon to create coverage, principles governing the
construction of insurance contracts dictate that when construing an insurance
policy to determine coverage the pertinent provisions should be read in pari
materia.” Intervest Const. of Jax, Inc. v. Gen. Fid. Ins. Co., 133 So. 3d 494, 498
C. The “Other Insurance” Provisions
This dispute concerns the interpretation of “other insurance” provisions
in the Rockhill and Northfield policies, both of which cover First Coast. Rockhill
alleges that both insurance policies are co-primary because they each contain
“other insurance” provisions that attempt to make the policy excess to any other
coverage to which the insured is entitled. (Doc. 39 at 9). Northfield alleges that
Rockhill’s “other insurance” provision does not apply and that Northfield’s
policy is excess over Rockhill’s policy. (Doc. 32 at 9).
In Florida, “where two or more policies that apparently cover the same
loss both contain excess ‘other insurance’ provisions, the clauses are deemed
‘mutually repugnant.’” Keenan, 653 F. Supp. 2d at 1263. Florida does not
recognize superiority of one excess “other insurance” provision over another.
Certain Underwriters at Lloyds, London Subscribing to Policy No. SA 1009211581 v. Waveblast Watersports, Inc., 80 F. Supp. 3d 1311, 1320 (S.D. Fla.
2015). When the excess “other insurance” provisions cancel each other out, each
insurer is liable for a pro rata share in accordance with their policy coverage
limits. Id. at 163–64. Thus, the Court must consider whether the “other
insurance” provisions in both the Rockhill and Northfield policies apply to the
1. Northfield’s “other insurance” provision makes its coverage
The Northfield policy’s “other insurance” provisions apply to First Coast
vis-a-vis the Underlying Action. (Doc. 32 at 9; Doc. 39 at 13). Northfield’s “other
insurance” provision, as modified by the combination endorsement, states:
4. Other Insurance
If other valid and collectible other insurance is available to the
insured for a loss we cover under Coverages A or B of this
Coverage Part, our obligations are limited as described in
Paragraphs a. and b. below.
As used anywhere in this Coverage Part, other insurance means
insurance, or the funding of losses, that is provided by, through
or on behalf of:
(i) Another insurance company;
a. Primary Insurance
This insurance is primary except when Paragraph b. below
applies. If this insurance is primary, our obligations are not
affected unless any of the other insurance is also primary.
Then, we will share with all that other insurance by the
method described in Paragraph c. below.
b. Excess Insurance
This insurance is excess over any other insurance, whether
primary, excess, contingent or on any other basis:
(5) That is available to the insured when the insured has
been added as an additional insured by attachment of an
endorsement under any other insurance or is any other
insured that is not a named insured under such
(Doc. 39-5 at 28, 39–40) (emphasis added). First Coast is an omnibus insured
under Rockhill’s insurance policy. (Doc. 39 at 4). Therefore, First Coast is an
insured that is not a named insured under the Rockhill policy—meaning that
Northfield’s excess “other insurance” combination endorsement applies.
Additionally, Northfield’s policy contains a “Real Estate Property
Managed” endorsement that states:
REAL ESTATE PROPERTY MANAGED
This endorsement modifies insurance provided under the following:
COMMERCIAL GENERAL LIABILITY COVERAGE PART
With respect to your liability arising out of your management of
property for which you are acting as real estate manager this
insurance is excess over any other valid and collectible insurance
available to you.
(Doc. 39-5 at 61). The liability from the Underlying Action arose from First
Coast’s management of the Community. Therefore, the Real Estate Property
Managed endorsement applies, making the Northfield policy excess.
Rockhill contends that these two endorsements are “inconsistent” and
“irreconcilable” and should cancel each other out. (Doc. 39 at 15). However, both
provisions can be given operative effect. See Trailer Bridge, 657 F.3d at 1141.
Although the provisions may sometimes overlap, they are separate and
independently operable means of limiting coverage to excess. See Tudor Ins. Co.
v. Am. Cas. Co. of Reading, Pa., No. 3:15CV166-MCR/CJK, 2017 WL 1217183,
at *6 (N.D. Fla. Mar. 31, 2017). Therefore, Northfield’s policy contains “other
insurance” provisions that are applicable to its coverage for the Underlying
2. Rockhill’s “other insurance” provision does not apply to the
Rockhill’s “other insurance” provision has three subsections. (Doc. 11-1 at
63). This provision states:
SECTION III – COMMON POLICY CONDITIONS
(APPLICABLE TO SECTION I – PROPERTY AND SECTION
II – LIABILITY)
H. Other Insurance
1. If there is other insurance covering the same loss or
damage, we will pay only for the amount of covered loss or damage
in excess of the amount due from that other insurance, whether you
can collect on it or not. But we will not pay more than the applicable
Limit of Insurance of Section I – Property.
2. Business Liability Coverage is excess over:
a. Any other insurance that insures for direct physical
loss or damage; or
b. Any other primary insurance available to you
covering liability for damages arising out of the
premises or operations for which you have been added
as an additional insured by attachment or
(Doc. 39-4 at 63) (emphasis in original).
Rockhill asserts that subsection H(1) is broad, covering any “loss or
damage,” and should not be constrained by the final sentence that arguably
limits its applicability to the Property section of the policy. (Doc. 42 at 8).
Northfield says that the final sentence of H(1) limits that subsection only to
situations involving property damage. (Doc. 46 at 6). As the Underlying Action
did not involve property damage, if Northfield is correct, H(1) would not apply
to the Underlying Action.
Rockhill’s policy contains two coverage sections: “Section I – Property”
and “Section II – Business Liability.” (Doc. 11-1). The “other insurance”
provision also has two sections that explain when coverage is excess; subsection
H(1) references Section I – Property, and subsection H(2) refers to Business
Liability. (Doc. 11-1 at 63). Throughout the policy, “Section I – Property” and
“Section II – Liability” are used to refer back to those specific coverage
sections—the “other insurance” provision should be treated no differently. See
Intervest Const. of Jax, 133 So. 3d at 498 (stating that provisions of an
insurance contract should be read in pari materia); (Doc. 11-1).
Thus, Rockhill’s broad reading of subsection H(1) fails to give meaning to
the final sentence that (albeit awkwardly) limits the excess provision to “Section
I – Property” claims. See Trailer Bridge, 657 F.3d at 1141 (explaining that every
provision should be given “its full meaning and operative effect”). Rockhill’s
reliance on W9/PHC Real Estate LP v. Farm Family Casualty Insurance Co.,
970 A.2d 382, 395 (N.J. Super. A.D. 2009) is misplaced. (Doc. 45 at 5). Although
Rockhill’s subsection H(1) contained the same first sentence as the provision at
issue in W9/PHC, the second sentence in that case did not limit itself to property
claims. See W9/PHC, 970 A.2d at 395; (Doc. 11-1 at 63). 9 H(1) does not apply to
the Underlying Action.
Next, Rockhill asserts that subsection H(2) also makes its policy excess
vis-a-vis the Underlying Action. (Doc. 39 at 11). Subsection H(2) of the “other
insurance” provision contains parts (a) and (b) that stipulate when Business
Liability Coverage is excess. (Doc. 11-1 at 63). The policy defines Business
Liability Coverage as those sums that Rockhill “becomes legally obligated to
The second sentence in the “other insurance” provision in W9/PHC,
upon which Rockhill relies, states: “But we will not pay more than the
applicable Limit of Insurance.” W9/PHC, 970 A.2d at 395.
pay as damages because of ‘bodily injury,’ ‘property damage’ or ‘personal and
advertising injury’ to which this insurance applies.” (Doc. 11-1 at 47).
Rockhill does not argue that H(2)(b) applies to this case. As to H(2)(a),
Rockhill says that “damage” should be separated from the clause “direct
physical loss” to allow a reading that covers more than just property liability.
(Doc. 39 at 11–12). Northfield claims that the phrase “direct physical loss or
damage” unambiguously refers to first party property insurance. (Doc. 46 at 8).
Under this view, “direct physical” modifies both “loss” and “damage” and only
refers to property loss or damage. (Doc. 46 at 8–9).
The phrase “direct physical loss or damage” is not a defined term in the
policy and must be given its common meaning. See Pac. Emp’rs., 508 F. Supp.
2d at 1175; (Doc. 39 at 11). Several cases have analyzed this phrase in the
context of whether certain injuries were a “direct physical loss or damage”
covered under the policy. See, e.g., Phila. Parking Auth. v. Fed. Ins. Co., 385 F.
Supp. 2d 280, 287–89 (S.D.N.Y. 2005) (holding that economic loss caused by the
FAA shutting down the Philadelphia Airport was not a “direct physical loss or
damage” because economic losses are not physical in nature); Huether v. Nodak
Mut. Ins. Co., 871 N.W.2d 444, 447 (N.D. 2015) (holding that loss of use
damages were not covered under a “direct physical loss or damage” provision
because loss of use damages are not physical nor a direct result of the covered
One court has examined the phrase “direct physical loss or damage” in
the context of an “other insurance” provision. See N. Pac. Ins. Co. v. Travelers
Cas. Ins., No. C15-5396 BHS, 2016 WL 69819, at *5 (W.D. Wash. Jan. 6, 2016).
In North Pacific, North Pacific Insurance Company sued Travelers for the costs
of defending and indemnifying a common insured in an underlying personal
injury suit. Id. at *1. At issue was whether North Pacific’s “other insurance”
provision applied. Id. The provision was identical to Rockhill’s H(2)(a) provision.
See id. at *2; (Doc. 11-1 at 63). The North Pacific court held that the phrase
“direct physical loss or damage” applied to property damage and not monetary
damages. N. Pac., 2016 WL 69819, at *5. The court based its decision on the
distinction between “damage” and “damages.” Id. The court further explained:
The North Pacific policy differentiates between “damages”
and “damage” throughout the policy. Notably, the policy uses
“damages” in the liability coverage section and “damage” in the
property coverage section. The policy provides liability coverage for
“sums that the insured becomes legally obligated to pay as
damages because of ‘bodily injury,’ ‘property damage’ or ‘personal
and advertising injury.’” Meanwhile, the policy provides property
coverage for “direct physical loss of or damage to Covered
Based on this language, “damages” has a different meaning
than “damage” in the North Pacific policy. “Damages” refers to
money owed to a plaintiff because of an injury or harm, while
“damage” refers to injury to property. As noted above, Clause H.2(a)
pertains to “direct physical loss or damage” rather than
“damages.” Clause H.2(a) therefore applies to property coverage,
which is not at issue in this case. For these reasons, the Court
concludes Clause H.2(a) is not applicable.
Id. (citations omitted) (emphasis in original).
Rockhill’s policy also uses the term “damage” exclusively throughout its
Property coverage section and the term “damages” in its Business Liability
coverage section. (Doc. 11-1). A closer examination reveals that the phrase
“direct physical loss or damage” appears more than twenty times in Section I –
Property, but is not included in Section II – Liability. (See Doc. 11-1). Rockhill
urges an expansive reading because, unlike elsewhere in the policy, the phrase
“direct physical loss or damage” in H(2)(a) is not subsequently limited. (Doc. 111 at 12). However, Rockhill’s examples undermine its argument, as each
demonstrates that “direct physical loss or damage” refers to property. Id.
Further, since an excess “other insurance” provision limits when the insurer
provides coverage, it should be interpreted to “provide the greatest extent of
coverage” and thus given its natural limited reading. See Keenan, 653 F. Supp.
2d at 1262.
The Court holds that Rockhill’s “other insurance” provision does not apply
to the Underlying Action. Northfield’s “other insurance” provision does apply to
the Underlying Action. Therefore, the Northfield policy is excess over the
Rockhill policy. Because this ruling is case dispositive, the Court does not
address the parties’ other arguments.
Accordingly, it is hereby
1. To the extent stated herein, Northfield’s Motion for Summary
Judgment (Doc. 32) is GRANTED.
2. To the extent stated herein, Rockhill’s Motion for Summary Judgment
(Doc. 39) is DENIED.
3. By separate Order, the Court will enter judgment in favor of
Defendant Northfield Insurance Company and against Plaintiff
Rockhill Insurance Company as to Rockhill’s equitable contribution
4. After the Judgment has been entered, the Clerk shall terminate all
pending motions and deadlines and close the file.
DONE AND ORDERED in Jacksonville, Florida this 8th day of
Counsel of record
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?