Atain Specialty Insurance Company v. T. Disney Trucking and Grading, Inc. et al
Filing
169
OPINION AND ORDER granting 111 Atain's Motion for Summary Judgment and 159 Evanston's Motion for Summary Judgment; denying 120 T. Disney's Motion for Summary Judgment; and denying as moot 87 T. Disney's Motion to Dismiss. See Opinion and Order for details. Signed by Intl Trade Judge Claire R. Kelly on 9/15/2023. (MHM)
UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF FLORIDA
JACKSONVILLE DIVISION
ATAIN SPECIALTY INSURANCE
COMPANY,
Plaintiff,
Case No.: 3:21-cv-01097-CRK
EVANSTON INSURANCE
COMPANY,
v.
OPINION AND ORDER RE:
CROSS-MOTIONS FOR SUMMARY
JUDGMENT
Plaintiff-Intervenor
T. DISNEY TRUCKING AND
GRADING, INC. et al.,
Defendants.
INTRODUCTION
Before the Court are three motions for summary judgment concerning the
obligations of insurer Atain Specialty Insurance Company (“Atain”) and excess
insurer Evanston Insurance Company (“Evanston”) towards insured party T. Disney
Trucking and Grading, Inc. (“T. Disney”) arising from a construction accident. 1 Each
party requests declaratory relief establishing its obligations under the commercial
general liability policies issued by Atain and Evanston to T. Disney. For the following
Also before the Court is T. Disney’s motion to dismiss Evanston’s intervening
complaint. See [T. Disney] Mot. Dismiss Am. Interv. Compl., Oct. 26, 2022, ECF No.
87; see also Evanston Am. Interv. Compl. ¶ 56, Oct. 12, 2022, ECF No. 84. T. Disney’s
motion to dismiss is denied as moot.
1
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reasons, Atain and Evanston’s motions for summary judgment are granted, and T.
Disney’s motion for summary judgment is denied.
BACKGROUND
The following facts are not in dispute. 2 On July 28, 2020, T. Disney was
involved in a construction project located off of S.R. 19 in Palatka, Florida. See
Compl. Ex. B ¶ 36, Sept. 13, 2022, ECF No. 77-2; see also T. Disney Answer ¶ 16,
Sept. 27, 2022, ECF No. 79.
During the course of construction, several trucks
involved in the project were stopped in the continuous left turn lane. Compl. Ex. B ¶
92; T. Disney Answer ¶ 24. Carlos L. Diaz Figueras was one of the drivers stopped
in the middle lane, as was Ruben Sanchez. Compl. Ex. B ¶ 92; T. Disney Answer ¶
25. Diaz got out of his vehicle and walked to coordinate completion of deliveries with
the other drivers. Compl. Ex. B ¶ 92; T. Disney Answer ¶ 25. While Diaz was
standing and coordinating the deliveries, a tractor trailer hauling machinery was
travelling in the opposite direction in an adjacent lane. Compl. Ex. B ¶ 93; T. Disney
Answer ¶ 24–25. A metal piece from the tractor trailer’s load struck Diaz as the truck
was passing by, and killed him. Compl. Ex. B ¶ 93; T. Disney Answer ¶ 26. The
T. Disney lists three “disputed facts” in its response to Atain’s motion. See T. Disney
Resp. Pl.’s Mot. Summ. J. at 3–6, Apr. 5, 2023, ECF No. 119. However, T. Disney is
not disputing the facts, but rather Atain’s characterization of Sanchez and Diaz as
“independent contractors,” and Atain’s failure to mention the cause of Diaz’ death.
See id. Similarly, Atain lists one “disputed fact,” which protests T. Disney’s
conclusion that Atain “owes” it attorney’s fees. See Atain Resp. Def. Mot. Summ. J.
at 3, Apr. 25, 2023, ECF No. 139. Because neither response identifies a material fact
which is contested, summary judgment is appropriate. See Wright & Miller, Fed.
Prac. & Proc. Civ. § 2725.1, 2725.2 (4th ed.).
2
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tractor trailer also collided with Sanchez, injuring him. Compl. Ex. A ¶ 23, Sept. 13,
2022, ECF No. 77-1; T. Disney Answer ¶ 17.
At the time of the accident, T. Disney possessed commercial general liability
coverage through a policy issued by Atain. Compl. Ex. G at 1, Sept. 13, 2022, ECF
No. 77-7; T. Disney Answer ¶ 36. The policy provides that Atain will “pay those sums
that the insured becomes legally obligated to pay as damages because of ‘bodily injury’
or ‘property damage’ to which this insurance applies.” Compl. Ex. G at 69; T. Disney
Answer ¶ 37. The policy also specifies Atain has a “duty to defend the insured against
any ‘suit’ seeking those damages.” Compl. Ex. G at 69; T. Disney Answer ¶ 37.
Coverage under the policy is subject to several exclusions, including the “auto
exclusion” and “employer exclusion.” The auto exclusion provides that coverage does
not apply to:
(2) “Bodily injury” or “property damage” arising out of or in connection
with any “auto” unless outlined below; or
(3) “Bodily injury” or “property damage” arising out of or in connection
with the “loading or unloading” of any aircraft, “auto” or watercraft by
any insured unless as outlined below.
This exclusion applies to “bodily injury” or “property damage” arising
out of any aircraft, “auto” or watercraft, whether or not owned,
maintained, used, rented, leased, hired, loaned, borrowed or entrusted
to others or provided to another by any insured.
Compl. Ex. G at 40; T. Disney Answer ¶ 40. The policy defines an “auto” as a “land
motor vehicle, trailer or semitrailer designed for travel on public roads, including any
attached machinery or equipment.” Compl. Ex. G at 81; T. Disney Answer ¶ 36.
Similarly, the employer exclusion excludes coverage for:
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“Bodily injury” to an “employee,” subcontractor, employee of any
subcontractor, “independent contractor,” employee of any “independent
contractor,” “temporary worker,” “leased worker,” “volunteer worker” of
any insured or any person performing work or services for any insured
arising out of and in the course of employment by or service to any
insured for which any insured may be held liable as an employer or in
any other capacity;
Compl. Ex. G at 36; T. Disney Answer ¶ 36. The employer exclusion further specifies
that “independent contractors,” as used in the exclusion, also applies to
“subcontractors and any employees of a subcontractor.” Compl. Ex. G at 36; T. Disney
Answer ¶ 36.
In addition to the Atain policy, T. Disney possesses an excess liability policy
issued by Evanston. See Evanston Am. Interv. Compl. ¶ 56, Oct. 12, 2022, ECF No.
84; see also [T. Disney’s] Mot. Dismiss ¶ 16, Oct. 26, 2022, ECF No. 87. The Evanston
policy provides that Evanston “will pay those sums in excess of the limits [of the Atain
policy], provided that the ‘underlying insurance’ also applies . . . .” Evanston Am.
Interv. Compl. ¶ 58; [T. Disney’s] Mot. Dismiss ¶ 18. The policy further provides that
Evanston is subject to the same terms, conditions, and exclusion as the Atain policy.
See Evanston Am. Interv. Compl. ¶ 58, 60, 61; see also [T. Disney’s] Mot. Dismiss ¶
19.
Following the accident, Sanchez and Laura E. Trujillo, as the personal
representative of the Estate of Carlos L. Diaz Figueras (“the Estate”) filed separate
lawsuits against T. Disney. On December 2, 2020, Sanchez filed a negligence action,
seeking damages from T. Disney for bodily injuries sustained during the accident,
serving T. Disney on December 28, 2020. See Compl. Ex. A. On March 8, 2021, in
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response to Sanchez’ lawsuit, Atain issued a reservation of rights letter to T. Disney,
stating that it could deny coverage under the policy, and that Atain would defend T.
Disney subject to its reservations. Compl. ¶ 30; T. Disney Answer ¶ 30. The attorney
appointed by Atain began to represent T. Disney in the Sanchez lawsuit on or about
March 22, 2021. T. Disney Answer at 15; Atain Resp. Def. Mot. Summ. J. at 3, Apr.
25, 2023, ECF No. 139. On December 1, 2021, Atain claims the Estate sent it a policy
limits demand letter prior to filing suit. Compl. ¶ 20. Atain responded to the policy
letter by issuing a supplemental reservation of rights letter to T. Disney, again
advising that coverage could be denied. Compl. ¶ 32; T. Disney Answer ¶ 32.
On
July 27, 2022, the Estate added T. Disney as a defendant in its lawsuit for wrongful
death. See Compl. Ex. B. On August 3, 2022, Atain issued a second supplemental
reservation of rights letter to T. Disney, again advising that coverage could be denied,
and stating that Atain would defend T. Disney in the Estate’s lawsuit. Compl. ¶ 34;
T. Disney Answer ¶ 34.
Procedural History
On September 13, 2022, Atain filed its fourth amended complaint against T.
Disney, Sanchez, and the Estate, requesting declaratory judgment from the Court as
to its obligations to defend and indemnify T. Disney in the two ongoing lawsuits. See
Compl. at 17–18. On September 27, 2022, T. Disney and the Estate each filed
counterclaims against Atain seeking, inter alia, a declaratory judgment that neither
policy exclusion cited by Atain applies. See T. Disney Answer at 22–23; [Estate]
Answer and Affirm. Defenses Pl.’s Fourth Am. Compl. & Counterclaim, Sept. 27,
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2022, ECF No. 80; Atain Answer [Estate’s] Compl. & Counterclaim, Oct. 17, 2022,
ECF No. 85; Atain Answer [T. Disney’s] Counterclaim, Oct. 17, 2022, ECF No. 86. On
October 12, 2022, Evanston filed an intervening complaint, requesting declaratory
judgment that Evanston has no duty to defend or indemnify T. Disney in either the
Sanchez or Estate lawsuit. See [Evanston’s] Am. Interv. Compl. for Declaratory J.,
Oct. 12, 2022, ECF No. 84; see also [Estate’s] Answer & Counterclaim Evanston’s
Interv. Compl., Oct. 26, 2022, ECF No. 88; Evanston’s Answer to [Estate’s]
Counterclaim, Nov. 30, 2022, ECF No. 94. On October 26, 2022, T. Disney filed a
motion to dismiss or stay parts of Evanston’s intervening complaint for lack of subject
matter jurisdiction. See [T. Disney’s] Mot. Dismiss, Oct. 26, 2022, ECF No. 87; see
also [Evanston’s] Resp. [T. Disney’s] Mot. Dismiss, Nov. 30, 2022, ECF No. 95; [T.
Disney’s] Reply Supp. Mot. Dismiss, Jan. 10, 2023, ECF No. 104.
On March 8, 2023, Atain moved for summary judgment, including summary
judgment on T. Disney’s and the Estate’s counterclaims, requesting a declaration that
it is not required to indemnify or defend T. Disney, and requesting to recoup its costs
already incurred in T. Disney’s defense. See [Atain] Mot. Summ. J. at 24–25, Mar. 8,
2023, ECF No. 111 (“Atain Mot.”); see also [T. Disney’s] Resp. Opp. Pl.’s Mot. Summ.
J., Apr. 5, 2023, ECF No. 119 (“T. Disney Resp. Br.”); [Sanchez’] Opp. Pl.’s Mot.
Summ. J., Apr. 5, 2023, ECF No. 121; [Estate’s] Opp. Pl.’s Mot. Summ. J., Apr. 24,
2023, ECF No. 137; [T. Disney’s] Reply [Sanchez’] Resp. Opp. Pl.’s Mot. Summ. J.,
Apr. 19, 2023, ECF No. 127; [T. Disney’s] Reply [Estate’s] Resp. Opp. Pl.’s Mot.
Summ. J., May 8, 2023, ECF No. 149. On April 5, 2023, T. Disney moved for summary
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judgment, requesting a declaration that Atain must defend and indemnify it under
the policy. See [T. Disney] Mot. Summ. J. at 25, Apr. 5, 2023, ECF No. 120 (“T. Disney
Mot.”); see also [Atain’s] Resp. Def.’s Mot. Summ. J., Apr. 25, 2023, ECF No. 139;
[Evanston’s] Resp. Def.’s Mot. Summ. J., May 10, 2023, ECF No. 151; [T. Disney’s]
Reply [Atain’s] Resp. Opp. Def.’s Mot. Summ. J., May 23, 2023, ECF No. 157; [T.
Disney’s] Reply [Evanston’s] Resp. Opp. Def.’s Mot. Summ. J., May 24, 2023, ECF No.
158. T. Disney also requests that the Court enter summary judgment in its favor on
its counterclaim and Evanston’s intervening complaint, award it $9,190.98 in
attorneys’ fees for its initial defense of the Sanchez lawsuit, and award it reasonable
costs and attorney’s fees. See T. Disney Mot. at 25. On May 24, 2023, Evanston
moved for summary judgment on its claim as well as T. Disney’s and the Estate’s
counterclaims, requesting a declaration that Evanston has no duty to defend or
indemnify T. Disney pursuant to the policy exclusions. See [Evanston] Mot. Summ.
J. at 5, May 24, 2023, ECF No. 159 (“Evanston Mot.”); see also [T. Disney’s] Resp.
[Evanston’s] Mot. Summ. J., July 5, 2023, ECF No. 163; [Estate’s] Resp. [Evanston’s]
Mot. Summ. J., June 29, 2023, ECF No. 162; [Evanston’s] Reply [T. Disney’s] Resp.
Opp. [Evanston’s] Mot. Summ. J., July 7, 2023, ECF No. 164; [Evanston’s] Reply
[Estate’s] Resp. Opp. [Evanston’s] Mot. Summ. J., July 7, 2023, ECF No. 165. All
three summary judgment motions have been fully briefed.
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JURISDICTION AND APPLICABLE LAW
The Court has jurisdiction over “all civil actions where the matter in
controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and
is between . . . citizens of different States.” 28 U.S.C. § 1332(a).
The Court will grant a motion for summary judgment “if the movant shows
that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” Fed. R. Civ. P. 56(a). Issues of fact are genuine “only
if a reasonable jury, considering the evidence presented, could find for the nonmoving
party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). A fact is “material”
if it may affect the outcome of the suit under governing law. See id.
In order to
survive summary judgment, a nonmoving party must set forth specific facts showing
there is a genuine issue for trial. See Johnson v. New Destiny Christian Ctr. Church,
Inc., 826 F. App’x 766, 770 (11th Cir. 2020) (citing Anderson, 477 U.S. at 249–50).
This action was initiated on the basis of diversity of citizenship, and therefore
Florida law applies to any issues not governed by the Constitution or treaties of the
United States or acts of Congress. See Mid-Continent Cas. Co. v. Am. Pride Bldg.
Co., LLC, 601 F.3d 1143, 1148 (11th Cir. 2010); see also 28 U.S.C. § 1652 (2018).
DISCUSSION
The Court considers three cross-motions for summary judgment requesting
declaratory relief. The parties’ motions raise three issues: (1) whether Atain and
Evanston have a duty to defend T. Disney (2) whether Atain and Evanston have a
duty to indemnify T. Disney, and (3) whether any party should be awarded attorneys’
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fees. The material facts are not disputed. As a preliminary matter, T. Disney argues
that some of the claims are not ripe. See T. Disney Mot. at 22–23. For the following
reasons, the Court concludes that all of the claims are ripe, grants Atain and
Evanston’s motions, and denies T. Disney’s motion.
I.
Ripeness
T. Disney argues that Evanston’s request for declaratory judgment on both its
duty to defend and its duty to indemnify is premature. Evanston argues that there
is a justiciable controversy regarding its duty to defend. See [Evanston’s] Resp. Def.’s
Mot. Summ. J. 1t 19–20, May 10, 2023, ECF No. 151. For the following reasons, both
of Evanston’s and Atain’s claims are ripe for resolution through declaratory
judgment.
The Court has subject matter jurisdiction over Evanston’s and Atain’s claims
pursuant to 28 U.S.C. § 1332 and may issue a declaratory judgment pursuant to 28
U.S.C. § 2201. Nonetheless, generally, a claim for indemnification is not ripe for
adjudication if there has not been a resolution of the underlying claim. See MidContinent Cas. Co. v. Delacruz Drywall Plastering & Stucco, Inc., 766 Fed. Appx. 768,
770–71 (11th Cir. 2019). However, pursuant to the Declaratory Judgment Act, 28
U.S.C. § 2201, et seq., courts determine whether an actual case or controversy exists
for ripeness purposes on a case-by-case basis. See Hendrix v. Poonai, 662 F.2d 719,
721–22 (11th Cir. 1981). A controversy exists when “the facts alleged, under all the
circumstances, show that there is a substantial controversy . . . of sufficient
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immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland
Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941) (citation omitted).
The Eleventh Circuit has recognized “[t]hat the liability may be contingent
does not necessarily defeat jurisdiction of a declaratory judgment action.”
GTE
Directories Pub. Corp. v. Trimen America, Inc., 67 F.3d 1563, 1569 (11th Cir. 1995)
(citation omitted); see also Hous. Specialty Ins. Co. v. Titleworks of Sw. Fla., Inc., No.
2:15-cv-219, 2015 WL 5599175 at *7–*11 (M.D. Fla. 2015) (declaratory judgment
appropriate when allegations necessarily sought indemnification under a liability
policy). The Court further explained that:
It is clear that in some instances a declaratory judgment is proper even
though there are future contingencies that will determine whether a
controversy ever actually becomes real. The familiar type of suit in
which a liability insurer seeks a declaration that it will not be liable to
indemnify an insured person for any damages the injured person may
recover against the insured is an example. The injured person may not
sue or he may not obtain a judgment against the insured, but there is
held to be sufficient controversy between the insurer and the injured
person that a declaratory judgment is permissible.
Id. (quoting Wright, Miller & Kane, Fed. Prac. & Proc. Civ. § 2757 (2nd ed.)).
T. Disney only explicitly opposes as premature Evanston’s request for
declaratory judgment on its duty to defend or indemnify. See T. Disney Mot. at 22–
23. However, the Court necessarily addresses whether either indemnification claim
is ripe. Although Atain does not expressly state that it is seeking a judgment with
respect to “indemnity,” the content of Atain’s complaint and its motion for summary
judgment require that the Court rule on this issue:
This action is brought pursuant to 28 U.S.C. § 2201 and seeks
declaratory relief as to Atain’s obligations for the Underlying Lawsuit to
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the Insured Party, or any of the other potential defendants, under a
policy of insurance issued to the Insured Party. Atain is uncertain as to
its duties, rights, and obligations and files this declaratory judgment
action to resolve questions of coverage under the insurance policy,
including its duty to defend and/or indemnify the Insured Party in the
Underlying Lawsuit. An actual and justiciable dispute over those duties,
rights, and obligations exists between the parties.
Compl. ¶ 13. Additionally, in its motion for summary judgment, Atain asks the Court
to “issue a declaratory ruling that Atain’s Policy does not provide coverage for the
Underlying Lawsuits.” See Atain Mot. at 25. Therefore, consistent with Atain’s
request for relief, the Court considers whether Atain, and Evanston have a duty to
defend and indemnify T. Disney.
The Court also considers whether Evanston’s
request for a ruling on its duty to defend is ripe, and whether Atain’s and Evanston’s
claims regarding indemnification are ripe.
The facts before the Court demonstrate the existence of a controversy which
warrants the issuance of declaratory judgment. Both Sanchez and the Estate have
affirmatively sought coverage for losses, and Atain and Evanston have denied that
any coverage is due. See [Estate] Answer and Affirm. Defenses Pl.’s Fourth Am.
Compl. & Counterclaim at 20, Sept. 27, 2022, ECF No. 80 (requesting a declaration
that “the Loss is covered under the Policy”); T. Disney Answer Ex. 5, Sept. 27, 2022,
ECF No. 79-5 (letter denial of coverage request for Sanchez lawsuit); Atain Mot. at
24–25; Evanston Mot. at 2–5. Similarly, the Estate has asserted losses against
Evanston by counterclaim and argued that Evanston is obligated to defend T. Disney.
See [Estate] Answer and Affirm. Defenses [Evanston’s] Am. Interv. Compl. at 27, Oct.
26, 2022, ECF No. 88. Both Sanchez and the Estate have commenced actions against
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T. Disney, see Compl. Ex. B; Compl. Ex. C, which in turn has argued that Atain and
Evanston must both defend and indemnify it for any losses resulting from the
lawsuits, see T. Disney Mot. at 25.
These facts show the existence of a real,
substantial controversy between the parties which is ripe for resolution.
See
Maryland Cas. Co., 312 U.S. at 273, see, also e.g., Titleworks of Sw. Fla., 2015 WL
5599175 at *9–*10 (finding that the existence of multiple contingencies did not
undermine the “practical likelihood” that the insured would seek recovery from the
insurer). Here, there have already been demands on the insurer to defend and
indemnify. See T. Disney Mot. at 23; see also [Estate] Answer and Affirm. Defenses
Pl.’s Fourth Am. Compl. & Counterclaim at 20, Sept. 27, 2022, ECF No. 80; T. Disney
Answer Ex. 5, Sept. 27, 2022, ECF No. 79-5. If there were a duty to defend, it is
possible that it would be premature to issue a declaratory judgment as to
indemnification,
as
the
uncertainty
regarding
liability
might
make
the
indemnification issue too remote. However, because neither the Sanchez’ nor the
Estate’s complaint alleges facts “which would trigger a duty to indemnify,” the
controversy here is ripe. Northland Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348,
1360 (M.D. Fla. 2001)
Thus, this controversy is ripe for resolution through a
declaratory judgment.
II.
Duty to Defend
The parties dispute whether Atain and Evanston have a duty to defend T.
Disney against the Sanchez and Estate lawsuits. Atain argues that it has no duty to
defend because the facts in the Estate’s and Sanchez’ complaints clearly show that
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coverage would be precluded under the auto and employee exclusions. See Atain Mot.
at 14–22.
T. Disney counters that the Sanchez and Estate complaints, as the
governing pleadings, contain insufficient factual content to show that either exclusion
applies. See T. Disney Mot. at 15–22. Evanston supports Atain’s arguments. See
Evanston Mot. at 2–5. For the following reasons, Atain and Evanston have no duty
to defend T. Disney. 3
A.
Legal Framework for Duty to Defend
An insurer’s duty to defend an insured is distinct from, and broader than, the
duty to indemnify. See Allstate Ins. Co. v. RJT Enterprises, Inc., 692 So.2d 142, 144
(Fla. 1997); see also Lime Tree Vill. Cmty. Club Ass’n v. State Farm Gen. Ins. Co.,
980 F.2d 1402, 1405 (11th Cir. 1993). The duty to defend is established when the
underlying complaint alleges facts that “fairly and potentially” bring the suit within
policy coverage. See Jones v. Fla. Ins. Guar. Ass’n, 908 So.2d 435, 442–43 (Fla. 2005).
Because the duty to defend is separate from the duty to indemnify, the insurer may
be required to defend a suit even though the facts later reveal there is no coverage for
the claims. See Trizec Props., Inc. v. Biltmore Constr. Co., Inc., 767 F.2d 810, 812
(11th Cir. 1985). Any doubts regarding the duty to defend must be resolved in favor
of the insured. See Lime Tree Vill., 980 F.2d at 1405. Exclusionary clauses are
As an excess insurer, Evanston has no duty to defend or indemnify T. Disney unless
the limits of the Atain policy have been reached, and the Court determines that Atain
also has a duty to defend or indemnify. See Evanston’s Am. Interv. Compl. for
Declaratory J. at ¶¶ 56–58, Oct. 12, 2022, ECF No. 84. The Court determines that
Atain has no duty to defend or indemnify. For these reasons, Evanston also has no
duty to defend or indemnify.
3
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generally interpreted strictly in favor of the insured. See Westmoreland v.
Lumbermens Mut. Cas. Co., 704 So. 2d 176, 179 (Fla. 4th Dist. Ct. App. 1997).
Generally, the allegations in the underlying complaint determine whether an
insurer has a duty to defend a claim. See Nat’l Union Fire & Ins. Co. v. Lenox Liquors,
Inc., 358 So.2d 533, 536 (Fla. 1997). However, courts may consider uncontroverted
facts that would not normally be alleged in the underlying complaint, or that the
plaintiff would not likely know at the time of filing suit. See Composite Structures
Inc. v. Cont’l Ins. Co., 560 F. App’x 861, 865 (11th Cir. 2014).
Thus, “[i]f
uncontroverted facts on the record place a claim outside of coverage, and the claimant
makes no attempt to plead the fact creating coverage or suggest the existence of
evidence establishing coverage,” there is no duty to defend. Nationwide Mut. Fire
Ins. Co. v. Keen, 658 So. 2d 1101, 1103 (Fla. 4th Dist. Ct. App. 1995).
B.
The Auto Exclusion
Atain argues that it has no duty to defend because coverage is precluded under
the auto exclusion. See Atain Mot. at 14–19; see also Evanston Mot. at 2–5. T. Disney
counters that the Sanchez and Estate complaints contain insufficient factual content
to show that the auto exclusion applies. See T. Disney Mot. at 19–22. For the
following reasons, the auto exclusion applies.
The auto exclusion provides in pertinent part that it extends to “bodily injury”
or “property damage” arising out of any aircraft, “auto” or watercraft, whether or not
owned, maintained, used, rented, leased, hired, loaned, borrowed or entrusted to
others or provided to another by any insured. Compl. Ex. G at 40. The policy defines
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an “auto” as a “land motor vehicle, trailer or semitrailer designed for travel on public
roads, including any attached machinery or equipment.” Id. at 81. The policy further
specifies that the exclusion applies whether or not the “auto” is owned, leased, rented
or otherwise provided to the insured. Id. at 40. The operative phrases “arising out
of” and “in connection with” are not defined in the policy; however, these phrases
encompass a range of scenarios in which injury was related to an auto. See Taurus
Holdings, Inc. v. United States Fid. & Guar. Co., 913 So. 2d 528, 533 (Fla. 2005)
(“arising out of” in the context of auto coverage requires “some level of causation
greater than coincidence”); see also Government Emples. Ins. Co. v. Novak, 453 So.
2d 1116, 1119 (Fla. 1984) (“It is well settled that “arising out of” does not mean
“proximately caused by,” but has a much broader meaning. All that is required is
some nexus between the motor vehicle and the injury”).
In Martinez, for example, a concrete driveway collapsed while the oil was being
changed in an insured person’s vehicle. See Martinez v. Citizens Property Insurance
Corp., 982 So.2d 57, 58 (Fla. 3d Dist. Ct. App. 2008).
The court held that the
automobile was a mere “instrumentality” and lacked sufficient causal connection to
the injuries to fall within the auto exclusion. See id. at 59. Similarly, in Almayor v.
State Farm Fire & Casualty Co., 613 So.2d 526, 527 (Fla. 3d Dist. Ct. App. 1993), a
plaintiff was injured in an explosion caused when a lit cigarette ignited gas the
plaintiff siphoned out of a car before making repairs. In Almayor, the court held that
that auto was a “legally remote source of a component, the gasoline, which was itself
harmless until acted upon by the insured’s negligence.” Id.
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Here, the facts are distinguishable from both Martinez and Almayor.
In
Martinez for example, an auto caused the collapse of a driveway; however, any other
sufficiently heavy object could have caused the collapse, as the fault was undisputedly
with the driveway itself. See Martinez, 982 So.2d at 58. The present circumstances
are the reverse. Diaz was struck by a piece of metal being carried by a moving tractor
trailer. See Compl. Ex. B ¶ 36; T. Disney Answer ¶ 26; T. Disney Resp. Br. at 6.
Sanchez was struck and injured by the tractor trailer itself. See Compl. Ex. A ¶¶ 21,
23; see also T. Disney Mot. ¶ 5. Sanchez’ and the Estate’s complaints both invoke the
operation of a vehicle as the cause of harm.
See Compl. Ex. A, ¶ 23 (“At the
aforestated time and place, the Defendant, Billy W. Murray, negligently operated
and/or maintained the motor vehicle so that it collided with the Plaintiff Ruben
Sanchez’s person and vehicle”); see also Compl. Ex. B, ¶ 23 (“a tractor trailer hauling
a machinery load was travelling in the opposite direction in the adjacent lane on S.R.
19, and a metal piece from the load hit Carlos L. Diaz Figueras . . .”).
T. Disney argues that “the Underlying Lawsuits involve no ‘auto.’” 4 T. Disney
Mot. at 21. Specifically with respect to Diaz, T. Disney argues that no auto was
involved because it was a metal piece from the trailer’s load that struck him. See T.
T. Disney also briefly argues that the exclusion does not apply because there was no
auto “owned or controlled” by T. Disney involved in the accident. T. Disney Mot. at
22. However, the policy does not specify that T. Disney must own or control the
involved auto for the exclusion to apply. To the contrary, the policy specifies that the
auto exclusion applies to any auto “whether or not owned, maintained, used, rented,
leased, hired, loaned, borrowed or entrusted to others.” Compl. Ex. G at 40.
Therefore, it is irrelevant that the tractor trailer was not owned by T. Disney for the
purposes of the exclusion.
4
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Case No.: 3:21-cv-01097-CRK
Disney Compl. at 19–21.
However, T. Disney does not allege, and the facts do not
suggest that the unspecified “metal piece” from the load which struck Diaz would
have caused an injury regardless of the presence of a tractor trailer. See Compl. Ex.
B ¶ 36; T. Disney Mot. at 22. Here the interchangeable “instrumentality” was the
metal piece, not the auto. Although any doubts regarding the duty to defend must be
decided in favor of the insured, see Lime Tree Vill., 980 F.2d at 1405, no ambiguity
in the auto exclusion raises such a doubt. Therefore, because coverage is precluded
on the face of the complaints due to the auto exclusion, Atain and Evanston have no
duty to defend T. Disney in either lawsuit.
C.
The Employee Exclusion
Atain argues that it has no duty to defend because coverage is precluded under
the employee exclusion. See Atain Mot. at 19–23; see also Evanston Mot. at 2–5. T.
Disney counters that the Sanchez and Estate complaints contain insufficient factual
content to show that the employee exclusion applies. See T. Disney Mot. at 15–19.
For the following reasons, the employee exclusion applies. 5
The employee exclusion applies to direct relationships, such as T. Disney
employees, as well as attenuated relationships, such as “any person providing work
or services for any insured.” Compl. Ex. G at 36. The policy states that coverage is
excluded for bodily injury to an “employee, subcontractor, employee of any
If the Court concludes that Atain has no duty to defend under the auto exclusion,
Atain argues that the Court need not address T. Disney’s alternate argument on
insufficiency of support for the employee exclusion. See Atain Mot. at 19. The Court
nevertheless addresses this argument for completeness.
5
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Case No.: 3:21-cv-01097-CRK
subcontractor, independent contractor, employee of any independent contractor . . .
or any person performing work or services for any insured arising out of and in the
course of employment by or service to any insured.” Compl. Ex. G. at 36. The policy
also specifies that the phrase “independent contractors” includes “subcontractors and
any employees of a subcontractor.” Id. The language of this employee exclusion is
broad, excluding coverage for a spectrum of potential working relationships with T.
Disney.
Here, the independent contractor agreements unambiguously establish that
Diaz and Sanchez were performing work for T. Disney.
See [Atain] Answer to
Counterclaim Ex. 1 at 14, Oct. 17, 2022, ECF No. 86-1; see also Compl. Ex. C at 2–3,
Sept. 13, 2022, ECF No. 77-3. These agreements are referenced by the allegations in
the underlying lawsuits, and T. Disney does not contest their authenticity. See T.
Disney Mot. at 15–19; T. Disney Resp. Br. at 3–5. Uncontroverted facts on the record
which establish a lack of coverage may be considered, even if such facts are not
included in the complaint. See, e.g., Nationwide Mut. Fire Ins. Co. v. Keen, 658 So.
2d 1101, 1103 (Fla. 4th Dist. Ct. App. 1995) (uncontroverted fact that claimant used a
40-hp engine excluded coverage, despite absence of fact in complaint); Acosta, Inc. v.
Nat’l Union Fire Ins. Co., 39 So. 3d 565, 574–75 (Fla. Dist. Ct. App. 2010) (duty to
defend nullified by result of prior litigation which was not referenced in complaint);
Stephens v. Mid-Continent Cas. Co., 915 F. Supp. 2d 1320, 1333–34 (Fla. So. Dist. Ct.
2013) (employee exclusion applied when claimant did not assert employment
OPINION AND ORDER - 18
Case No.: 3:21-cv-01097-CRK
relationship in complaint, but admitted that he had been hired to build on insured
premises).
The uncontroverted facts of the accident are similar to the fact pattern in MidContinent, in which the court considered suggestive language in the complaint, as
well as uncontroverted extrinsic evidence. See Mid-Continent, 915 F. Supp. 2d at
1333. There is no dispute that Diaz and Sanchez were making deliveries in a T.
Disney work zone, see Compl. Ex. B ¶ 91–93; ; Compl. Ex. A ¶ 12, 15, 23; T. Disney
Answer ¶ 24–25, which by itself establishes that both men were “providing work or
services for the insured,” per the policy. Compl. Ex. G at 36. Additionally, as in Keen,
the Court may consider extrinsic evidence, such as the independent contractor
agreements, which are uncontroverted and preclude coverage. See Keen, 658 So. 2d
at 1103.
Sanchez and Diaz stopped their vehicles in the middle lane of S.R. 19 in a work
zone operated by T. Disney. See Compl. Ex. B ¶ 64, 85, 92; see also Compl. Ex. A ¶
12, 15, 23. Diaz then got out of his truck to “coordinate completion of the deliveries
at the Construction Project as instructed” with Sanchez and the other driver. Compl.
Ex B. ¶ 92–93. T. Disney states that as “members of the public at large,” Diaz and
Sanchez should be covered under the policy.
See T. Disney Mot. at 19.
This
characterization of Sanchez and Diaz is contradicted by the undisputed facts, which
show that Diaz and Sanchez were driving trucks under contract with T. Disney, in a
T. Disney work zone, to complete deliveries to a T. Disney construction project. See
Compl. Ex. B ¶ 91–93; Compl. Ex. A ¶ 12, 15, 23; T. Disney Answer ¶ 16–18. From
OPINION AND ORDER - 19
Case No.: 3:21-cv-01097-CRK
these facts, no trier of fact could reasonably conclude that Sanchez and Diaz were
“members of the public” who happened to be injured while stopping trucks near a T.
Disney worksite. Regardless of the exact contractual nature of their relationship with
T. Disney, the facts show that Sanchez and Diaz were “providing work or services for
the insured.” Compl. Ex. G at 36.
Additionally, T. Disney conflates the scope of the employee exclusion with the
existence of a personal contractual relationship. T. Disney argues that Sanchez and
Diaz, individually, were not employees or independent contractors of T. Disney. See
T. Disney Mot. at 16–19. Therefore, T. Disney argues, the agreements are merely
evidence of an independent contractor relationship, and do not establish without
dispute that both men were contractors. See T. Disney Resp. at 5; see also [Estate’s]
Opp. Pl.’s Mot. Summ. J. at 5, Apr. 24, 2023, ECF No. 137. Concerning the Estate’s
lawsuit, for example, T. Disney states that Diaz “in his individual capacity was not
an employee, contractor, or independent contractor [of T. Disney].” T. Disney Mot. at
17 (quoting Compl. Ex. B ¶ 51). However, Atain does not allege that Sanchez and
Diaz were employees or contractors in their individual capacity. Rather, Atain points
to the independent contractor agreements to show that Sanchez and Diaz through
their respective companies La Cidra Corp. and Diaz-Trujillo Corp. were providing
services to T. Disney when the accident occurred.
See Atain Compl. at 19–20.
According to the “Independent Contractor Agreement” signed and initialed by
Sanchez, the company “La Cidra Trucking Corp.” agreed to supply trucking services
to T. Disney as of July 24, 2020. See [Atain] Answer to Counterclaim Ex. 1 at 14, Oct.
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Case No.: 3:21-cv-01097-CRK
17, 2022, ECF No. 86-1. On the agreement, Sanchez gives his title as “La Cidra
trucking corp. (president),” and the “driver name” field in the agreement is filled out
“Ruben Sanchez.” See id. at 14, 15. T. Disney protests Atain’s characterization of
Sanchez’ contractor status based on this agreement, but does not dispute the
agreement’s authenticity. See T. Disney Resp. Br. at 3–5. Similarly, according to an
identical “Independent Contractor Agreement” signed and initialed by Diaz, a
company named “Diaz-Trujillo Corp.” began supplying trucking services to T. Disney
on July 29, 2019. See Compl. Ex. C at 2–3, Sept. 13, 2022, ECF No. 77-3. Diaz is
listed as the company’s “owner” on the agreement, and he is also listed as the driver.
See id. Again, T. Disney contests whether this agreement establishes that Diaz was
an independent contractor of T. Disney, but does not dispute its authenticity or
applicability. See T. Disney Resp. Br. at 3–5. Therefore, considering both the facts
alleged in the underlying complaints and the uncontroverted contractor agreements
on the record, see T. Disney Resp. Br. at 3–5, the Court concludes that Atain and
Evanston have no duty to defend T. Disney because of the employee exclusion.
III.
Duty to Indemnify
Atain argues that the “auto exclusion” and “employee exclusion” apply
pursuant to the language of the policy, and therefore it has no duty to indemnify T.
Disney for the potential costs of the Sanchez and Estate lawsuits. See Atain Mot. at
14–22. T. Disney counters that neither exclusion applies, based on the facts of the
accident. See T. Disney Mot. at 15–22. Evanston reiterates Atain’s arguments, and
See Evanston Mot. at 2–5; [T. Disney’s] Resp. [Evanston’s] Mot. Summ. J., July 5,
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Case No.: 3:21-cv-01097-CRK
2023, ECF No. 163. For the following reasons, the indemnity dispute is ripe and
Atain and Evanston have no duty to indemnify T. Disney.
A.
The Auto Exclusion
The parties dispute whether the “auto exclusion” applies to damages resulting
from the Estate’s or Sanchez’ lawsuit. See Atain Mot. at 15–19; T. Disney Mot. at
19–22. Atain argues that it makes no difference whether Diaz was stuck by the
tractor trailer, or part of the load being carried by the tractor trailer, as in either case
the accident involved an “auto.” See Atain Mot. at 18. T. Disney argues that because
a metal piece sticking out of the tractor trailer, and not the trailer itself, struck Diaz
the auto was “a mere instrumentality of the injuries.” See T. Disney Mot. at 22. The
plain language of the policy bars coverage for injury in connection with “any auto,”
and Diaz’ and Sanchez’ accidents were directly connected with an “auto.”
As previously explained, it is well-settled that an insurer’s duty to indemnify
is narrower than its duty to defend, and that an insurer need only indemnify its
insured for occurrences covered by the policy. See EmbroidMe.com, Inc. v. Travelers
Prop. Cas. Co. of Am., 845 F.3d 1099, 1107 (11th Cir. 2017). An insurance policy is a
contract, and therefore interpretation of an insurance policy is a question of law. See
id. First, the policy must be construed in accordance with its plain language. See
Chandler v. Geico Indem. Co., 78 So. 3d 1293, 1300 (Fla. 2011). If the policy language
is “susceptible to more than one reasonable interpretation . . . the insurance policy is
considered ambiguous.” Id. (quoting Auto-Owners Ins. Co. v. Anderson, 756 So. 2d
29, 34 (Fla. 2000)). Any ambiguous language is construed against the drafter and in
OPINION AND ORDER - 22
Case No.: 3:21-cv-01097-CRK
favor of the insured. See id. However, ambiguity does not exist solely because an
insurance contract is complex and requires analysis to interpret it. See General Star
Indem. v. W. Fla. Vill. Inn, 874 So. 2d 26, 30 (Fla. 2d Dist. Ct. App.).
The policy states that “[t]his insurance does not apply to: (2) ‘Bodily injury’ or
‘property damage’ arising out of or in connection with any ‘auto,’ unless as outlined
below.” Compl. Ex. G at 40. The policy defines an “auto” as a “land motor vehicle,
trailer or semitrailer designed for travel on public roads, including any attached
machinery or equipment.” Id. at 81. The phrases “arising out of” and “in connection
with” encompass a range of scenarios in which injury was related to an auto. See
Taurus Holdings, 913 So. 2d at 533 (“arising out of” in the context of auto coverage
requires “some level of causation greater than coincidence”); see also Novak, 453 So.
2d at 1119 (“It is well settled that ‘arising out of’ does not mean ‘proximately caused
by,’ but has a much broader meaning. All that is required is some nexus between the
motor vehicle and the injury”). Here, as previously discussed, it is undisputed that
Diaz was struck by a piece of metal being carried by a moving tractor trailer, and
Sanchez was struck by the truck itself. See Compl. Ex. B ¶ 21, 23, 36; T. Disney
Answer ¶ 26; T. Disney Resp. Br. at 6; T. Disney Mot. ¶ 5. Therefore, according to
the plain meaning of the policy terms, Diaz’ and Sanchez’ injuries were occurrences
both “arising out of” and “in connection with” the auto carrying the load. See
Chandler, 78 So. 3d 1293 at 1300.
OPINION AND ORDER - 23
Case No.: 3:21-cv-01097-CRK
B.
The Employee Exclusion
The parties dispute whether the employee exclusion applies. See Atain Mot.
at 19–22; T. Disney Mot. at 15–19; Evanston Mot. at 2–3. Atain argues that the
exclusion applies because both Sanchez and Diaz were independent contractors for T.
Disney, as evidenced by their contractor agreements. See Atain Mot. at 19–22. T.
Disney argues that the pleadings allege no facts showing that Sanchez or Diaz were
employees or contractors at the time of the accident. See T. Disney Mot. at 15–19.
Because the uncontested facts demonstrate that Sanchez and Diaz were performing
work for T. Disney through their respective companies, the employee exclusion
applies.
The employee exclusion applies to direct relationships, such as T. Disney
employees, as well as attenuated relationships, such as “any person providing work
or services for any insured.” Compl. Ex. G at 36. The policy states that coverage is
excluded for bodily injury to an “employee, subcontractor, employee of any
subcontractor, independent contractor, employee of any independent contractor . . .
or any person performing work or services for any insured arising out of and in the
course of employment by or service to any insured.” Id. The policy also specifies that
the phrase “independent contractors” includes “subcontractors and any employees of
a subcontractor.” Id. The language of the employee exclusion is broad, excluding
coverage for a spectrum of potential working relationships with T. Disney.
As previously discussed, the undisputed facts, namely that both Sanchez and
Diaz were coordinating deliveries to a T. Disney jobsite, contradicts T. Disney’s
OPINION AND ORDER - 24
Case No.: 3:21-cv-01097-CRK
characterization of both men as “members of the public at large.” See T. Disney Mot.
at 19. T. Disney argues that there is insufficient evidence to show that Diaz or
Sanchez were employees or contractors for T. Disney when the accident occurred. See
id. at 16–19. However the events surrounding the accident and the existence of
independent contractor agreements show that Diaz and Sanchez were working for T.
Disney, as envisioned by the broad language of the employee exclusion. See Compl.
Ex. B ¶ 91–93; T. Disney Answer ¶ 24–25; see also Compl. Ex. C at 2–3, Sept. 13,
2022, ECF No. 77-3; [Atain] Answer to Counterclaim Ex. 1 at 14, Oct. 17, 2022, ECF
No. 86-1.
IV.
Defense Costs
Atain requests that the Court enter an order allowing it to withdraw from T.
Disney’s defense and recoup defense costs. See Atain Mot. at 25. T. Disney does not
indicate that it opposes this request, in the event that the Court finds no duty to
defend. See T. Disney Mot. at 23–24; see also T. Disney Resp. at 19–21. For the
following reasons, Atain’s request is granted.
Insurers may recover attorneys’ fees incurred in defending an insured when
there is no duty to defend, and when the insurer timely issues a reservation of rights
letter. See State Farm Mut. Auto. Ins. Co. v. Coker, 505 Fed. Appx. 824, 826 (11th
Cir. 2013) (citing Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So. 2d 1034, 1039
(Fla. 1st Dist. Ct. App. 2000)). Generally, the law of contracts governs, the right to
reimbursement such that an insured’s acceptance of an insurer’s offer to defend under
reservation entitles the insurer to fees, if reimbursement was a condition of the
OPINION AND ORDER - 25
Case No.: 3:21-cv-01097-CRK
reservation. See Nationwide Mut. Fire Ins. Co. v. Royall, 588 F. Supp. 2d 1306, 1317
(M.D. Fla. 2008) (collecting cases).
Here, Atain offered to defend T. Disney in the Estate and Sanchez lawsuits
under reservation. On March 8, 2021, Atain issued a reservation of rights letter,
informing T. Disney that it would defend the Sanchez lawsuit, but that it “expressly
reserves the right . . . to recoup any defense costs incurred from Disney should it be
determined that there is no coverage for the Lawsuit.” Compl. Ex. D at 3, Sept. 13,
2022, ECF No. 77-4; T. Disney Answer ¶ 30. On August 3, 2022, Atain issued a second
reservation of rights letter, informing T. Disney that it would defend the Estate
lawsuit, but retained the right to “recoup any costs incurred.” Compl. Ex. F at 3,
Sept. 13, 2022, ECF No. 77-6; T. Disney Answer ¶ 32. Because T. Disney accepted
Atain’s tenders of defense under reservation, see T. Disney Mot. at 10, 11, it agreed
to reimburse costs in the event that Atain had no duty to defend. See Royall, 588 F.
Supp. 2d at 1317. Additionally, T. Disney has not indicated that it opposes Atain’s
request to recoup defense costs. See T. Disney Mot. at 23–24; see also T. Disney Resp.
at 19–21. Therefore, Atain’s request is granted, and Atain may withdraw from T.
Disney’s defense and recoup its defense costs.
CONCLUSION
For the foregoing reasons, Atain’s motion for summary judgment, see ECF No.
111, and Evanston’s motion for summary judgment, see ECF No. 159, are granted
with respect to their individual claims as well as T. Disney’s and the Estate’s
counterclaims. See T. Disney Answer at 22–23; see also [Estate] Answer and Affirm.
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Case No.: 3:21-cv-01097-CRK
Defenses Pl.’s Fourth Am. Compl. & Counterclaim, Sept. 27, 2022, ECF No. 80;
[Estate] Answer and Affirm. Defenses [Evanston’s] Am. Interv. Compl., Oct. 26, 2022,
ECF No. 88. T. Disney’s motion for summary judgment on Atain’s complaint, its own
counterclaim, and the Estate’s counterclaim, see ECF No. 120, is denied, and T.
Disney’s motion to dismiss Evanston’s intervening complaint, see ECF No. 87, is
denied as moot. The Court will enter a separate judgment in accordance with Federal
Rule of Civil Procedure 58.
/s/ Claire R. Kelly
Claire R. Kelly, Judge *
Dated:
September 15, 2023
New York, New York
Judge Claire R. Kelly, of the United States Court of International Trade, sitting by
designation.
*
OPINION AND ORDER - 27
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