Nationwide Mutual Fire Insurance Company v. Kaloust Financial, LLC et al
Filing
35
ORDER denying 24 Nationwide's Motion for Judgment on the Pleadings. Signed by Judge Virginia M. Hernandez Covington on 12/18/2012. (MEB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
NATIONWIDE MUTUAL FIRE INSURANCE
COMPANY,
Plaintiff,
v.
Case No.:
8:12-cv-235-T-33MAP
KALOUST FINANCIAL, LLC, ET AL.,
Defendants.
______________________________/
ORDER
This cause is before the Court pursuant to Plaintiff’s
Motion for Judgment on the Pleadings, filed on July 30, 2012.
(Doc. # 24).
On August 13, 2012, Defendants Stephen and
Jackie Bleile (Doc. # 29) and Defendants Kaloust Financial,
LLC, Richard Kaloust, and the Estate of Richard Kaloust (Doc.
# 30) filed their responses in opposition to the motion. For
the reasons that follow, the motion is due to be denied.
I.
Factual Background and Procedural History
The following factual discussion, taken from Plaintiff’s
Amended Complaint, is accepted as true for the purpose of
addressing the motion.
Plaintiff Nationwide Mutual Fire
Insurance Co. issued a Business Owners Liability Insurance
Policy
to
Defendant
Kaloust
Financial,
LLC,
Policy
No.
77BO7268003001, with effective dates of July 11, 2008, to July
11, 2009 (the “Policy”). (Doc. # 12 at ¶ 11).
On or about May 20, 2009, Defendants Stephen and Jackie
Bleile filed a wrongful death lawsuit in Missouri state court
against Defendants Kaloust Financial, Richard Kaloust,1 and
Daniel Barbosa, among others, Case No. 09WA-CC0066-01 (the
“Underlying Action”). (Id. at ¶ 9; Doc. # 12-1).
A copy of
the fourth amended complaint filed by the Bleiles is attached
to
Nationwide’s
Amended
“Underlying Complaint”).
Complaint
as
Exhibit
A
(the
(Doc. # 12-1).
The Underlying Complaint alleges that on or about January
7, 2009, the Bleiles' son, Mitchell Bleile, was a passenger in
a vehicle operated by Barbosa, who was acting at the time as
an “agent” of Kaloust. (Id. at ¶¶ 16-17).
Underlying
Complaint,
while
approaching
According to the
an
intersection,
Barbosa intentionally disregarded a stop sign and proceeded
into
the
intersection
without
stopping,
causing
another
vehicle to strike the passenger’s side of Barbosa’s vehicle.
(Id. at ¶¶ 19, 20).
Bleile
sustained
As a result of the impact, Mitchell
serious
injuries
and
died
from
those
injuries. (Id. at ¶ 21).
The Underlying Complaint alleges counts for negligence
1
The parties collectively refer to Defendants Kaloust
Financial, LLC, Richard Kaloust, and the Estate of Richard
Kaloust as “Kaloust.” The Court will likewise do so hereafter.
2
and negligence per se against Kaloust and Barbosa and counts
for negligent
hiring,
negligent
retention,
supervision against Kaloust. (Id.).
and negligent
Kaloust and Barbosa have
sought liability coverage from Nationwide, including a defense
and indemnity, for the Underlying Action pursuant to the
Policy.
A copy of the Policy is attached to Nationwide’s
Amended Complaint as Exhibit B.
(Doc. ## 12-2, 12-3).
On February 3, 2012, Nationwide filed a three-count
Complaint seeking declaratory judgment against Defendants
Kaloust
Financial
LLC
and
the
Bleiles.2
(Doc.
#
1).
Nationwide filed an Amended Complaint on March 12, 2012, which
added Richard Kaloust, the Estate of Richard Kaloust, and
Daniel Barbosa as Defendants and added three counts against
Barbosa.
(Doc.
#
12).
Nationwide
asserts
that
Policy
conditions and exclusions preclude coverage for Kaloust and
Barbosa and thus relieve Nationwide of the duty to defend and
indemnify Kaloust and Barbosa in the Underlying Action.
at ¶ 12).
(Id.
Specifically, Nationwide alleges that coverage is
barred by the Policy’s Workers Compensation and Similar Laws
2
Nationwide asserts that the Bleiles are appropriately
named as Defendants in this action because the Bleiles have an
interest in any insurance coverage available to Kaloust and/or
Barbosa should the Bleiles obtain a judgment against Kaloust
and/or Barbosa in the Underlying Action. (Doc. # 12 at ¶ 14).
3
Exclusion
(Counts
I
and
IV),
by
the
Policy’s
Employers
Liability Exclusion (Counts II and V), and/or by the Policy’s
Aircraft, Auto or Watercraft Exclusion (Counts III and VI).
(Doc. # 12).
Nationwide seeks a declaration that it has no
duty or obligation to defend or indemnify Kaloust and/or
Barbosa in connection with the Underlying Action and seeks an
award of its costs. (Id.).
Barbosa failed to appear in this action and a Clerk’s
default was entered against him on July 31, 2012. (Doc. # 27).
Nationwide now seeks judgment on the pleadings pursuant to
Federal Rule of Civil Procedure 12(c). (Doc. # 24).
II.
Standard of Review
Federal
Rule
of
Civil
Procedure
12(c)
directs
that
“[a]fter the pleadings are closed - but early enough not to
delay trial - a party may move for judgment on the pleadings.”
Fed. R. Civ. P. 12(c).
A motion for judgment on the pleadings
may be granted “when material facts are not in dispute and
judgment can be rendered by looking at the substance of the
pleadings and any judicially noticed facts.” Bankers Ins. Co.
v. Fla. Residential Prop. & Cas. Joint Underwriting Ass’n, 137
F.3d
1293,
1295
(11th
Cir.
1998)(citing
Slagle
v.
ITT
Hartford, 102 F.3d 494, 497 (11th Cir. 1996) and Herbert
Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th
4
Cir. 1990)).
Judgment for the moving party is appropriate
only if there is no genuine dispute of material fact and the
movant is entitled to judgment as a matter of law.
Doe v. Bd.
of Cnty. Comm’rs, 815 F. Supp. 1448, 1449 (S.D. Fla. 1992).
When considering such a motion, the Court must “accept the
facts alleged in the complaint as true and draw all inferences
that favor the nonmovant.”
Id.
The Court notes that the motion has not been converted
into a motion for summary judgment because the Court has not
considered matters outside the pleadings.3
Rule 7(a) defines
“pleadings” to include both the complaint and the answer;
however, Rule 10(c) provides that “[a] copy of a written
instrument that is an exhibit to a pleading is a part of the
pleading for all purposes.”
If an attachment to a complaint
or an answer is a written instrument, it is part of the
pleadings and can be considered on a motion for judgment on
the pleadings without the motion being converted into one for
summary judgment. Horsley v. Feldt, 304 F.3d 1125, 1134 (11th
3
When a document outside the pleadings is considered,
Federal Rule of Civil Procedure 12(d) requires that “the
motion must be treated as one for summary judgment under Rule
56.” Fed. R. Civ. P. 12(d). Additionally, “[a]ll parties
must be given a reasonable opportunity to present all the
material that is pertinent to the motion. Id.
5
Cir.
(quoting Fed. R. Civ. P. 7(a) and 10(c)).
2002)
The incorporation
by reference doctrine allows the Court to consider a document
attached to the pleadings without converting a Rule 12(c)
motion into a motion for summary judgment if the document is
central to the claim and its authenticity is not challenged.
Id.
Here,
the
Court
has
considered
only
the
Amended
Complaint, Exhibits A and B to the Amended Complaint (the
Underlying Complaint and the Policy), and the Bleiles' Answer.
It cannot be disputed that Exhibits A and B are central to
Nationwide’s claims against Defendants.
The parties have not
questioned the authenticity of these documents.
III. Analysis
A.
The Duty to Defend and the Duty to Indemnify
Under Florida law, which the Court applies in this
diversity case, the duty to defend is broader than the duty to
indemnify.
Sinni v. Scottsdale Ins. Co., 676 F. Supp. 2d
1319, 1323 (M.D. Fla. 2009).
The decision of whether an
insurer has a duty to defend “is determined solely by the
claimant’s complaint if suit has been filed.” Higgins v. State
Farm Fire & Cas. Co., 894 So. 2d 5, 9-10 (Fla. 2004).
An
insurer’s duty to defend against a legal action is triggered
6
“when the complaint alleges facts that fairly and potentially
bring the suit within policy coverage.” Jones v. Fla. Ins.
Guar. Ass’n, Ins., 908 So. 2d 435, 442-43 (Fla. 2005).
In contrast to the duty to defend, the duty to indemnify
is not determined by reference to the claimant’s complaint,
but rather by reference to the actual facts and circumstances
of the injury.
Underwriters at Lloyds London v. STD Enters.,
395 F. Supp. 2d 1142, 1147 (M.D. Fla. 2005).
In this context,
insurance contracts are to be construed in a manner
that is reasonable, practical, sensible, and just.
. . . Terms used in a policy are given their plain
and ordinary meaning and read in the light of the
skill
and
experience
of
ordinary
people.
Provisions that exclude or limit liability of an
insurer are construed more strictly than provisions
that provide coverage.
United States Fire Ins. Co. v. Freedom Vill. of Sun City Ctr.,
279 F. App’x 879, 880-81 (11th Cir. 2008)(internal citations
omitted). Furthermore, if provisions in an insurance contract
are “reasonably susceptible of more than one meaning, they are
ambiguous and construed in favor of the insured.
That rule
applies if a genuine inconsistency, uncertainty, or ambiguity
in meaning remains after a review of the plain language.” Id.
at 881.
B.
The Policy’s Exclusions
The Policy provides, in pertinent part, as follows:
7
B. Exclusions
1.
Applicable to Business Liability Coverage
This insurance does not apply to:
* * *
d.
Workers’
Laws
Compensation
and
Similar
Any obligation of the insured under
a workers’ compensation, disability
benefits
or
unemployment
compensation law or any similar law.
e.
Employer’s Liability
“Bodily Injury” to:
(1)
An “employee” of the insured
arising out of and in the
course of:
(a)
Employment
insured; or
by
the
(b)
Performing duties related
to the conduct of the
insured’s business;
* * *
This exclusion applies:
(a) Whether the insured may be
liable as an employer or
in any other capacity;
and
(b) To any obligation to share
damages with or repay
someone else who must pay
damages because of the
injury.
8
* * *
g.
Aircraft, Auto Or Watercraft
“Bodily injury” or “property damage”
arising
out
of
the
ownership,
maintenance, use or entrustment to
others of any aircraft, “auto” or
watercraft owned or operated by or
rented or loaned to any insured. Use
includes operations and “loading and
unloading.”
(Doc. # 12-2 at 20, 22)(emphasis in original).
The Policy
additionally provides:
C. Who Is An Insured
* * *
2.
Each of the following is also an insured:
a.
Your “employees” . . . but only for
acts within the scope of their
employment
by
you
or
while
performing duties related to the
conduct of your business. However,
none of these “employees” is an
insured for:
(1)
“Bodily injury”
injury”:
(a)
or
“personal
To you, . . . or to
a
co-“employee”
while
that
co“employee” is either
in the course of his
or her employment or
performing
duties
related
to
the
conduct
of
your
business.
9
(Id. at 25-26)(emphasis in original).
The Policy defines “employee” as follows:
F. Liability and Medical Expenses Definitions
* * *
5.
“Employee” includes a “leased worker.”
“Employee” does not include a “temporary
worker.”
(Id. at 28)(emphasis in original).
C.
Applicability of the Policy Exclusions
The
applicability
of
the
above
exclusions
turns
on
whether Mitchell Bleile and Barbosa constitute “employees” of
Kaloust under the Policy. Nationwide contends that Bleile was
an employee of Kaloust acting in the course of that employment
or performing duties related to the conduct of Kaloust’s
business at the time of the accident, such that liability for
the bodily injury he sustained is excluded under the Policy’s
Employer’s
Liability
exclusion.
(Doc.
#
24
at
¶
17).
Additionally, Nationwide asserts that the Policy does not
provide coverage for any obligation Kaloust may have to Bleile
as an employee under workers’ compensation or similar law.
(Id.).
Finally, Nationwide argues that Barbosa was also an
employee of Kaloust at the time of the accident, which in turn
made him an insured under the policy, such that the bodily
injury to Bleile, arising out of the use of the vehicle that
10
was being operated by Barbosa, is excluded from coverage by
the Policy’s Aircraft, Auto or Watercraft Exclusion. (Id. at
¶ 24).
In response, Kaloust and the Bleiles argue that the
above-quoted
Policy
exclusions
are
inapplicable
to
the
Underlying Action at this point because neither Mitchell
Bleile nor Barbosa are alleged to be employees of Kaloust in
the
Underlying
Complaint.
(Doc.
#
28).4
Rather,
the
Underlying Complaint alleges only that Barbosa and Kaloust
were “engaged in a principal-agent relationship” at the time
of the accident. (Doc. # 12-1 at ¶ 22).
In their Answer, the
Bleiles have admitted “that Mitchell Bleile was . . . an
‘agent’ of Richard Kaloust and Kaloust Financial, LLC, as that
term is understood, acting in the course and scope of that
agency at the time of the subject accident.” (Doc. # 14 at ¶
17).
However, nowhere does the Underlying Complaint, nor
Nationwide’s Amended Complaint, allege that Bleile or Barbosa
were employees of Kaloust. The Bleiles and Kaloust state that
had such an allegation been made, they would have expressly
4
The Bleiles’ response was filed twice, first on
August 10, 2012 (Doc. # 28), and again on August 13, 2012
(Doc. #29).
Kaloust filed a response that is essentially
identical to that of the Bleiles. (Doc. # 30). Accordingly,
for simplicity, the Court will cite only to the first-filed
response at Docket # 28.
11
denied it because the evidence would provide “absolutely no
support for any such employment relationship.”
(Doc. # 28 at
5).
The Court agrees with the Bleiles and Kaloust and finds
that Nationwide is not entitled to judgment on the pleadings.
As the Bleiles and Kaloust point out, the Policy’s definition
of “employee” does not include “agents” of Kaloust, but
rather, states only that the term “employee” includes a
“leased worker” but not a “temporary worker.”5 (Doc. # 12-2 at
28).
The Court agrees with Kaloust and the Bleiles that the
terms “agent” and “employee” are not interchangeable under
Florida law.
Rather, as explained in Estate of Miller v.
Thrifty Rent-A-Car Sys., Inc., 637 F. Supp. 2d 1029, 1037
(M.D. Fla. 2009),
an “employee” is a subspecies of agent “whose
principal controls or has the right to control the
manner and means of the agent’s performance of
work.”
Thus, “employee” is a narrower category
than “agent” . . . .
Id. (quoting Restatement (Third) of Agency § 7.07(3)(a)).
Thus, because the Underlying Complaint alleges only that
Barbosa was an agent, but not an employee, of Kaloust and the
5
There does not appear to be any dispute that neither
Bleile nor Barbosa were “leased workers” as that term is
defined by the Policy.
12
Bleiles have admitted only that Mitchell Bleile was an agent
of Kaloust, the Court cannot say as a matter of law that the
Policy’s exclusions necessarily preclude liability for the
Underlying Action.
Management
Group,
The Court finds the case of Category 5
LLC
v.
Companion
Property
&
Casualty
Insurance Co., 76 So. 3d 20 (Fla. 1st DCA 2011), on point and
instructive.
In Category 5, the court considered the applicability of
an identical Aircraft, Auto or Watercraft Exclusion which
excluded coverage for bodily injuries arising out of the use
of an automobile operated by an insured, which term was
likewise defined to include the named insured’s “employees.”
Id. at 23-24.
constituted
an
The insurer argued that the automobile driver
employee
under
the
policy
based
on
the
allegation in the underlying complaint that the automobile
driver “was hired by or under the direction, control and
supervision” of the insured’s shareholders or managers. Id. at
24.
However, the court rejected this argument, stating that,
“While this allegation might acknowledge a more generalized
principal-agent
relationship
between
appellant
and
[the
automobile driver], there is nothing that explicitly indicates
the existence of an employer-employee relationship.”
Id.
Thus, the court found that the underlying complaint alleged
13
facts which brought the lawsuit outside of the auto exclusion
thereby triggering the insurer’s duty to defend the insured in
the underlying action.
Id.
As in Category 5, the Underlying Complaint alleges only
a “generalized principal-agent relationship” between Barbosa
and Kaloust but does not “explicitly indicate[] the existence
of an employer-employee relationship.”
Id.
Thus, the Court
finds that Nationwide has not proven as a matter of law that
Barbosa
was
an
insured
under
the
Policy
such
that
the
Aircraft, Auto or Watercraft Exclusion would apply to preclude
coverage
for
the
Underlying
Action.6
Likewise,
as
the
Defendants have admitted only that Mitchell Bleile was an
agent, but not an employee, of Kaloust at the time of the
accident, the Court finds that Nationwide has failed to
establish as a matter of law that Bleile was an employee at
6
Furthermore, the Court finds it curious that
Nationwide does not address subparagraph 2.a.(1)(a) of the
Policy’s definition of who is an insured, which states that
Kaloust’s “employees” are not insureds for “‘Bodily injury’ or
‘personal injury’ . . . to a co-‘employee’ while that co‘employee’ is either in the course of his or her employment or
performing duties relating to the conduct of your business.”
(Doc. # 12-2 at 26). Thus, it may be the case that even if
Bleile and Barbosa were deemed to be “employees” of Kaloust
under the Policy as argued by Nationwide, the above-quoted
provision could apply to remove Barbosa from the definition of
an “insured,” which in turn would render the Policy’s
Aircraft, Auto or Watercraft Exclusion inapplicable.
14
the time of the accident in order for the Employer’s Liability
exclusion to be triggered in this case.
Finally, as workers’ compensation is generally available
only to those who qualify as employees under the relevant
workers’ compensation statute, and there are no allegations in
the Underlying Complaint suggesting that the Bleiles have
sought or received, or would be eligible to receive, workers’
compensation benefits from Kaloust for the bodily injury
Mitchell Bleile sustained in the accident, the Court finds
that Nationwide has failed to establish at this juncture that
the Policy’s Workers’ Compensation and Similar Laws exclusion
applies
to
preclude
coverage
for
the
Underlying
Action.
Nationwide’s motion for judgment on the pleadings is denied
accordingly.
The Court cautions, however, that its decision should not
be interpreted as a dispositive ruling that Nationwide does in
fact have a duty to defend and indemnify Kaloust and/or
Barbosa
in
the
Underlying
Action.
Such
appropriately before the Court at this time.
issue
is
not
Rather, by its
holding, the Court determines only that Nationwide has failed
to establish at this juncture that it does not have a duty to
defend and indemnify Kaloust and/or Barbosa in the Underlying
Action.
15
Accordingly, it is now
ORDERED, ADJUDGED, and DECREED:
Plaintiff’s Motion for Judgment on the Pleadings (Doc. #
24) is DENIED.
DONE and ORDERED in Chambers in Tampa, Florida this 18th
day of December, 2012.
Copies to: All Counsel of Record
16
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?