Wausau Underwriters Insurance Company v. Econosweep & Maintenance Services, Inc. et al

Filing 40

ORDER overruling 37 Objections; adopting 34 Report and Recommendation; denying 8 Defendant Countryside Power Sweeping, Inc.'s Motion to Dismiss. Signed by Judge Marcia Morales Howard on 1/12/2018. (JW)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION

WAUSAU UNDERWRITERS
INSURANCE COMPANY,
Plaintiff,
v.

Case No. 3:17-cv-723-J-34JBT

ECONOSWEEP & MAINTENANCE
SERVICES, INC., et al.,
Defendants.

ORDER
THIS CAUSE is before the Court on Magistrate Judge Joel B. Toomey’s Report and
Recommendation (Doc. 34; Report), entered on November 30, 2017. In the Report,
Judge Toomey recommends that Defendant, Countryside Power Sweeping Inc.’s Motion
to Dismiss Wausau Underwriters Insurance Company’s Complaint (Doc. 8; Motion) be
denied.

See Report at 10.

On December 14, 2017, Defendant Countryside Power

Sweeping, Inc. (Countryside) filed an objection to the Report.

See Defendant,

Countryside Power Sweeping, Inc.’s Objections to the Magistrate Judge’s November 30,
2017 Report and Recommendation [DE 34] (Doc. 37; Objection).

Plaintiff Wausau

Underwriters Insurance Company (Wausau) filed a response on December 27, 2017.
See Plaintiff’s Response and Memorandum of Legal Authority in Opposition to Defendant
Countryside Power Sweeping, Inc.’s Objections to the Magistrate Judge’s November 30,
2017 Report and Recommendation (Doc. 38; Response). Accordingly, this matter is ripe
for review.

The Court “may accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1). If no specific
objections to findings of facts are filed, the district court is not required to conduct a de
novo review of those findings. See Garvey v. Vaughn, 993 F.2d 776, 779 n.9 (11th Cir.
1993); see also 28 U.S.C. § 636(b)(1). However, the district court must review legal
conclusions de novo. See Cooper-Houston v. Southern Ry. Co., 37 F.3d 603, 604 (11th
Cir. 1994); United States v. Rice, No. 2:07-mc-8-FtM-29SPC, 2007 WL 1428615, at *1
(M.D. Fla. May 14, 2007).
Countryside objects to the Report on two grounds.

See generally Objection.

First, Countryside contends that Wausau’s breach of contract claim (Count II of the
Complaint (Doc. 1)) should be dismissed pursuant to Florida Statute section 725.01,
commonly referred to as the “statute of frauds.”

Id. at 3-5.

Second, Countryside

contends that Wausau’s claim for common law indemnity (Count III) should be dismissed
because the complaint filed in the underlying state court litigation together with the final
judgment entered in that action contradict Wausau’s allegation that Hull Storey Gibson
Companies, LLC (Hull Storey) was faultless in the underlying state action. Id. at 5-7;
Complaint (Doc. 1-4; Underlying Complaint); Final Judgment (Doc. 1-5).
In the Response, Wausau contends that Countryside’s objections are without merit.
See generally Response. With respect to Countryside’s first objection, Wausau notes
that Countryside failed to raise the issue of the statute of frauds in the Motion, disputes
that the statute of frauds governs a transfer of rights under the Services Contract, and
argues that dismissal based on the statute of frauds would be inappropriate. Id. at 3-5.

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Additionally, Wausau disputes that the Underlying Complaint and Final Judgment refute
Wausau’s allegation that Hull Storey lacked fault in the state action. Id. at 5-6.
Upon consideration of the record, the Court finds that the Objection is due to be
overruled and that the Magistrate Judge’s legal and factual conclusions are due to be
accepted and adopted. First, the Court finds that Countryside’s arguments regarding
Wausau’s breach of contract claim are not properly before the Court. As Wausau notes
in the Response, Countryside did not present any arguments regarding the statute of
frauds in the Motion. See Response at 3-4. A “district court has the discretion to decline
to consider a party’s argument when that argument was not first presented to the
magistrate judge.” Williams v. McNeil, 557 F.3d 1287, 1292 (11th Cir. 2009). Seeing no
reason for Countryside’s failure to present the issue to the Magistrate Judge, the Court
declines to consider Countryside’s new argument raised for the first time in the Objection.
Thus, to the extent Countryside seeks to have Count II dismissed, the Objection is due to
be overruled.
Turning to Countryside’s second argument, the Court finds that to the extent
Countryside seeks to have Wausau’s claim for common law indemnity dismissed, the
Objection similarly is due to be overruled. Notably, Countryside’s contention that the
Underlying Complaint and Final Judgment refute Wausau’s allegations that Hull Storey
was without fault are identical to Countryside’s argument previously raised in the Motion.
See Motion at 7. Preliminarily, the Court notes that:
It is improper for an objecting party to . . . submit[ ] papers to a district court
which are nothing more than a rehashing of the same arguments and
positions taken in the original papers submitted to the Magistrate Judge.
Clearly, parties are not to be afforded a ‘second bite at the apple’ when
they file objections to a R & R.

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Fox v. Colvin, No. 16-cv-61057-BLOOM/Balle, 2017 WL 1292390, at *2 (S.D. Fla. Feb. 28,
2017) (quotation omitted).

More importantly, in the Report, the Magistrate Judge

considered at length Wausau’s arguments and concluded that the entry of the Final
Judgment and the allegations in the Underlying Complaint were insufficient to refute
Wausau’s allegations in the Complaint that Hull Storey was without fault. See Report at
7-9.

In the Objection, Countryside fails to provide any authority suggesting that the

Magistrate Judge’s finding is erroneous or that he has misidentified or misapplied the
relevant authority. See Objection at 5-6. In arguing simply that a complaint should be
dismissed where the exhibits plainly contradict the allegations, Countryside ignores the
legal authority cited by the Magistrate Judge in finding no such contradiction in the
Complaint before the Court here.
“Indemnity is a right which inures to one who discharges a duty owed by him, but
which, as between himself and another, should have been discharged by the other and is
allowable only where the [w]hole fault is in the one against whom indemnity is sought.”
Houdaille Indus., Inc. v. Edwards, 374 So. 2d 490, 492-93 (Fla. 1979) (citation omitted).
In practice, indemnification “shifts the entire loss from one who, although without active
negligence or fault, has been obligated to pay, because of some vicarious, constructive,
derivative, or technical liability, to another who should bear the costs because it was the
latter’s wrongdoing for which the former is held liable.”

Id. at 493 (citation omitted).

Accordingly:
To state a claim for common law indemnity, a party must allege that he is
without fault, that another party is at fault, and that a special relationship
between the two parties makes the party seeking indemnification
vicariously, constructively, derivatively, or technically liable for the acts or
omissions of the other party.

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Tsafatinos v. Family Dollar Stores of Fla., Inc., 116 So. 3d 576, 581 (Fla. 2d DCA 2013);
see also Dade Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 641 (Fla. 1999)
(internal citations omitted).
In the Underlying Complaint, Melissa Clodfelter asserted two claims against Hull
Storey based on its negligent maintenance of the sidewalk (Count I) and negligent hiring
and retention of an independent contractor to maintain the premises (Count II). See
Underlying Complaint ¶¶10-23. Additionally, on June 22, 2016, the state court entered
the Final Judgment against Hull Storey in the amount of $775,963.37.

See Final

Judgment. In the Objection, Countryside contends that “[t]he Final Judgment represents
direct fault on Hull Storey because there is no allegation of vicarious, constructive,
derivative or technical liability on Hull Storey in the Clodfelter [Underlying] Complaint.”
See Objection at 6. 1

However, Countryside fails to recognize that in the Underlying

Complaint, Clodfelter alleged the possibility of Hull Storey’s passive negligence by alleging
that “Defendant Hull by and through its agents, servants or employees, negligently
maintained the sidewalk that leads to the employee entrance of the building.”

See

Underlying Complaint ¶13.
“[A] former adjudication against an indemnitee, finding the indemnitee’s acts to be
wrongful, is binding against the indemnitee and precludes indemnification.” Diplomat
Properties Ltd. Partnership v. Tecnoglass, LLC, 114 So. 3d 357, 363 (Fla. 4th DCA 2013).
However, where no such finding has been conclusively made, indemnification is not
precluded. In a case similar to the instant matter, Florida’s Third District Court of Appeal
determined that a jury’s general verdict of negligence and the allegations in the complaint

1

Countryside does not appear to object to the Magistrate Judge’s finding that Wausau has pled the
existence of a special relationship. See generally Objection.

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did not show conclusively that the jury found the indemnitee, Babcock Industries, Inc.
(Babcock), at fault so as to preclude Babcock from seeking indemnification from the
defendants. See Allstate Ins. Co. v. A.D.H., Inc., 397 So. 2d 928, 931 (Fla. 3d DCA 1981).
The court explained:
These documents are totally inadequate to show what was litigated and
decided in the first action. It may be that a complete record of the first trial
will not aid in resolving the issue of whether the jury found Babcock with
fault or faultless. If the jury were instructed that it could only find Babcock
liable if guilty of ‘active negligence,’ then the jury verdict means it found
Babcock to be at fault, and Babcock would be collaterally estopped on its
claim for indemnity. If the jury were instructed that it could only find
Babcock liable if it found [one of the defendants] negligent, then the jury
verdict means that it found Babcock without fault, and Babcock would be
entitled to be indemnified. If the jury was given both instructions, then its
finding of negligence remains equivocal.
Id. at 930 n.5; see also Am. Home Assurance Co. v. City of Opa Locka, 368 So. 2d 416,
419 (Fla. 3d DCA 1979) (affirming judgment in favor of an indemnitee, despite the
allegations of active fault asserted against it, based on the trial court’s “implied finding” of
passive fault). Accordingly, a general verdict of negligence does not necessarily preclude
a party from pursuing indemnification. Moreover, Florida courts have recognized that a
business owner charged with the non-delegable duty to maintain the premises may seek
indemnification from an independent contractor which it hired to perform that duty. See
Daniel v. Morris, 181 So. 3d 1195, 1198 (Fla. 5th DCA 2015) (acknowledging that one who
is held liable for breaching a non-delegable duty may seek indemnification from the active
tort-feasor responsible for the breach); Armiger v. Associated Outdoor Clubs, Inc., 48
So.3d 864, 875 n. 8 (Fla. 2d DCA 2010) (same); Mortgage Guarantee Ins. Corp. v. Stewart,
427 So. 2d 776, 779 (Fla. 3d DCA 1983) (same). Upon review of the Objection and the
applicable authority, the Court finds no error in Judge Toomey’s analysis. As such, the

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Court finds that to the extent that Countryside seeks the dismissal of Count III of the
Complaint, the Objection is due to be overruled.
Upon independent review of the file and for the reasons stated here and in the
Report, the Court will accept and adopt the legal and factual conclusions recommended
by the Magistrate Judge. Accordingly, it is hereby
ORDERED:
1.

Defendant, Countryside Power Sweeping, Inc.’s, Objections to the

Magistrate Judge’s November 30, 2017 Report and Recommendation [DE 34] (Doc. 37)
are OVERRULED.
2.

The Report and Recommendation (Doc. 34) of Magistrate Judge Toomey is

ADOPTED as the opinion of the Court.
3.

Defendant Countryside Power Sweeping, Inc.’s Motion to Dismiss Wausau

Underwriters Insurance Company’s Complaint (Doc. 8) is DENIED.
4.

Defendant Countryside Power Sweeping, Inc. shall respond to the Complaint

in accordance with the requirements of Rule 12 of the Federal Rules of Civil Procedure.
DONE AND ORDERED in Jacksonville, Florida this 12th day of January, 2018.

Lc25
Copies to:
Counsel of Record
The Honorable Joel B. Toomey
United States Magistrate Judge

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