Zurich American Insurance Company v. European Tile and Floors, Inc. et al

Filing 76

ORDER denying (Doc. # 57 ) Motion for Summary Judgment. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 6/5/2017. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
ZURICH AMERICAN INSURANCE COMPANY,
as successor by merger to MARYLAND
CASUALTY COMPANY,
Plaintiff,
v.

Case No. 8:16-cv-729-T-33AAS

EUROPEAN TILE AND FLOORS, INC.,
and ROBERT A. DALZELL, INC.,
Defendants.
________________________________/
ORDER
This matter comes before the Court pursuant to Plaintiff
Zurich

American

Insurance

Company’s

Motion

for

Summary

Judgment (Doc. # 57), which was filed on January 31, 2017.
Defendant

Robert

A.

Dalzell,

Inc.

filed

a

Response

in

Opposition to the Motion (Doc. # 67) on March 20, 2017, to
which Zurich replied (Doc. # 70) on March 30, 2017.

As

explained below, the Motion is denied.
I.

Background
A.

Zurich Insures European Tile and Floors, Inc.

Maryland

Casualty

Company

(now

Zurich)

issued

four

policies of primary commercial general liability and umbrella
liability insurance to European Tile and Floors, Inc. that
were in effect from July 18, 2005, until February 17, 2009.
(Doc. # 57-7 - 57-10).

Each primary policy is subject to a $1

million limit for personal and advertising injury, $1 million

each occurrence, and $3 million general aggregate. (Id.). Each
umbrella

policy

is

subject

to

a

$1

million

limit

per

occurrence and in the aggregate. (Id.; Doc. # 36 at ¶ 27).
The primary policies effective July 18, 2007, to July 18,
2008, and July 18, 2008, to February 17, 2009, are subject to
an exclusion for TCPA lawsuits. (Doc. # 36 at ¶ 32).
The Zurich primary policies are subject to the following
requirements:
2.

Duties In The Event Of Occurrence, Offense,
Claim Or Suit

b.

If a claim is made or “suit” is brought
against any insured, you must:
(1) Immediately record the specifics of the
claim or “suit” and the date received;
and
(2) Notify us as soon as practicable.

You must see to it that we receive written notice
of the claim or “suit” as soon as practicable.
c.

You and any other involved insured must:
(1) Immediately send us copies of any
demands, notices, summonses or legal
papers received in connection with the
claim or “suit”;
(2) Authorize us to obtain records and other
information;
(3) Cooperate with us in the investigation,
settlement or defense of the claim or
“suit”; and
(4) Assist us, upon our request, in the
enforcement of any right against any
person or organization which may be
liable to the insured because of injury
or damage to which this insurance may
also apply.
2

d.

(Id.

at

No insured will, except at their own cost,
voluntarily make a payment, assume any
obligation, or incur any expense, other than
for first aid, without our prior consent.
¶

33).

The

Zurich

umbrella

policies

contain

substantially similar language. (Id.).
B.

Dalzell Files the Underlying TCPA Action

Mark William Ellis opened European in 2000 and served as
the president of the corporation. (Ellis Depo. Doc. # 57-3 at
8).

In June of 2006, Ellis received a fax solicitation from

“Business to Business Solutions” for advertizing services.
(Id. at 11, 20). Ellis retained the company and paid $422 to
send

5,000

faxes

“randomly.”

(Id.

at

11-13,

18).

He

explained, “at that time I didn’t know it was illegal.” (Id.
at 11-12).

He thought that he was getting a really great

deal. (Id.).
Robert A Dalzell, Inc. received one of the unsolicited
faxes on June 22, 2006, and brought a putative class action
lawsuit against Ellis and European for illegal fax blasting in
2009. (Id. at 21, 32-33). According to Robert Dalzell: “I got
a fax I didn’t ask for and that’s pretty much it.” (Dalzell
Depo. Doc. # 57-4 at 8).

Dalzell was “sick and tired of

getting [unsolicited] faxes.” (Id. at 35).
Ellis testified that he “knew [he] had insurance,” and he

3

accordingly

“contacted

Zurich,

who

was

[his]

insurance

carrier, and spoke with someone in customer service about the
suit, and they referred to the policy and said that I wasn’t
covered under the policy.” (Ellis Depo. Doc. # 57-3 at 21-22).
Ellis testified that a Zurich representative, referring to
specific pages of the insurance policy, told Ellis over the
phone that “fax lawsuits are excluded.” (Id. at 23).
Zurich’s mass litigation claims specialist, Adam McCabe,
testified in a Rule 30(b)(6), Fed. R. Civ. P., deposition
that, in 2009, (at the time Dalzell sued European), Zurich
maintained a call center for Zurich’s insureds “to submit []
claim[s] via telephone.” (McCabe Depo. Doc. # 57-11 at 51,
53).

Zurich’s call center employees used a system called “EZ

Access” to set up claims over the telephone. (Id. at 54).

At

the relevant time, Zurich also accepted claims via fax and
email. (Id. at 57).

McCabe testified that he only became

aware of the Dalzell lawsuit in 2016. (Id. at 8).

He was not

able to locate any documents reflecting that Ellis contacted
Zurich upon being sued by Dalzell.

According to McCabe,

“there may not have been a call.” (Id. at 56).

And he

testified: “I don’t believe there is any evidence whether
there was a call or wasn’t a call.” (Id. at 57).
Ellis contacted Jeff Baughman, Esq., an attorney who had
4

approximately one year of experience at the time, and engaged
Baughman to be his attorney. (Ellis Depo. Doc. # 57-3 at 22,
24).
out

Baughman represented Ellis and European until they “ran
of

money”

and

thereafter,

counsel.” (Id. at 25, 28).

Ellis

“appeared

without

Ellis recalled that the lawsuit

was “very lengthy and expensive.” (Id. at 27).
Dalzell’s lawsuit against Ellis and European was filed on
August 28, 2009, in the Circuit Court of the Sixth Judicial
Circuit in and for Pinellas County. (Doc. # 36 at ¶ 7).

The

Complaint sought relief on behalf of all persons who (1)
within four years prior to the date of the complaint (2) were
sent telephone facsimile messages of material advertizing the
property, goods, or services of Ellis and European, (3) with
whom they did not have prior express permission, and (4) with
whom they did not have an established business relationship.
(Id.).

Dalzell’s

Complaint

alleged

Telephone

Consumer

Collection Protection Act and conversion claims. (Id.).
Although Dalzell’s Complaint was served on European and
Ellis on September 3, 2009, no responsive pleading was filed
until two years later, on November 7, 2011. (Id. at ¶ 8). On
March

10,

2011,

Dalzell

filed

a

motion

seeking

class

certification, which Baughman successfully defeated at a
hearing held on May 10, 2011.

(Baughman Depo. Doc. # 57-2 at
5

49).

Thereafter, Baughman withdrew as European’s counsel

based on “fundamental differences” with European. (Doc. # 57-2
at 252). After Baughman’s withdrawal, Dalzell filed a renewed
motion for class certification, which was granted as unopposed
on November 4, 2011. (Samore Rpt. Doc. # 57-5 at 5).
Thereafter, Dalzell filed a Motion for Summary Judgment
based on 4,278 facsimile transmissions to the class. (Doc. #
36 at ¶ 14).

Neither Ellis nor European opposed Dalzell’s

Motion for Summary Judgment and that Motion was granted. (Id.
at ¶ 15).

On July 9, 2015, a Final Judgment was entered

against European only in the amount of $2,139,000 (4,278 fax
recipients multiplied by $500) plus an additional $909,975.60
in prejudgment interest and costs. (Id. at ¶ 17).

No appeal

was filed. (Id. at ¶ 20).
Thereafter, Dalzell’s attorney decided to “go[] after the
insurance company” - Zurich. (Ellis Depo. Doc. # 57-3 at 43).
Dalzell filed a second lawsuit, this time against Zurich in
the Circuit Court of Cook County, Ilinois, to collect on the
multimillion dollar judgment. (Doc. # 36 at ¶ 23).

On

February 29, 2016, Zurich contacted Ellis to ask for his
personal assistance in defending Zurich against Dalzell’s
Illinois lawsuit. (Ellis Depo. Doc. # 57-3 at 66). During his
deposition, Ellis explained that he lost all of his “dreams”
6

including his flooring business and his beach house and had to
file for bankruptcy. (Id. at 42). Nevertheless, Ellis offered
to do anything that he could to assist Zurich. (Id. at 67).
In 2016, Zurich offered to appoint defense counsel to try to
vacate the judgment. (Id. at 66-67).

But, at that point in

time, European was out of business and Ellis had received a
bankruptcy discharge. (Samore Rpt. Doc. # 57-5 at 3).

Ellis

did not stand in the way of Zurich’s attempt to vacate the
judgment, but he also did not jump at the chance to assist
Zurich in its quest to fight the 2015 judgment against
European. (Ellis Depo. Doc. # 57-3 at 67).
C.

Zurich’s Present Suit

On March 24, 2016, Zurich filed suit in this Court
against European and Dalzell. (Doc. # 1).
Zurich

filed

its

First

Amended

Complaint

On May 9, 2016,
containing

the

following counts: breach of contract against European (Count
I); Declaratory Judgment against European and Dalzell for “No
Coverage Based on Insureds’ Breach of Notice and Cooperation
Conditions” (Count II); Declaratory Judgment Against European
and Dalzell for “No Coverage Obligation Based on Violation of
Statutes Exclusion” (Count III); Declaratory Judgment against
European and Dalzell for “No Coverage Based on Violation of

7

Communication or Information Law Exclusion” (Count IV); and
Declaratory Judgment Against European and Dalzell for “No Duty
to Indemnify Based on No Property Damage or Personal and
Advertizing Injury Caused by an Offense During the Policy
Period” (Count V).

(Doc. # 36).

Zurich explains that it did not name Ellis as a Defendant
because Ellis received a complete discharge from all liability
in his bankruptcy proceedings, which occurred between 20132014.

(Id. at ¶¶ 3, 18-19).

Dalzell filed its Answer and

Affirmative Defense on August 8, 2016. (Doc. # 51).

The

single affirmative defense states: “To the extent that Zurich
relies on an exception or exclusion to coverage and that
exception or exclusion was added to a renewal policy, and
Zurich failed to provide sufficient notice of the reduction in
coverage,

the

reduction

in

coverage

is

invalid

original policy’s terms apply.” (Id. at 10-11).

and

the

European did

not respond to the Complaint or the Amended Complaint.

The

Clerk entered a Rule 55(a), Fed. R. Civ. P., Default against
European with respect to the Complaint on April 29, 2016.
(Doc. # 31).
On January 31, 2017, Zurich filed a Motion for Summary
Judgment as to Counts I (breach of contract against European)

8

and

Count

Dalzell

II

for

cooperation

(declaratory
no

coverage

policy

judgment

based

provisions).

on

against
breach

(Doc.

#

European

of

notice

57).

and
and

Dalzell

responded to the Motion, but European did not, as it has been
defaulted. (Doc. # 67).

Zurich filed a Reply on March 30,

2017. (Doc. # 70).
On May 15, 2017, the parties filed their Motions in
Limine. (Doc. ## 71, 72). Those Motions are ripe (Doc. ## 73,
75) and will be addressed via separate Order.
II.

Summary Judgment Legal Standard
Summary judgment is appropriate “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). A factual dispute alone is not enough to defeat
a

properly

pled

motion

for

summary

judgment;

only

the

existence of a genuine issue of material fact will preclude a
grant of summary judgment.

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 247-48 (1986).
An issue is genuine if the evidence is such that a
reasonable jury could return a verdict for the nonmoving
party.

Mize v. Jefferson City Bd. of Educ., 93 F.3d 739, 742

(11th Cir. 1996) (citing Hairston v. Gainesville Sun Publ’g

9

Co., 9 F.3d 913, 918 (11th Cir. 1993)).

A fact is material if

it may affect the outcome of the suit under the governing law.
Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.
1997).

The moving party bears the initial burden of showing

the court, by reference to materials on file, that there are
no genuine issues of material fact that should be decided at
trial. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256,
1260 (11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986)).

“When a moving party has discharged

its burden, the non-moving party must then ‘go beyond the
pleadings,’ and by its own affidavits, or by ‘depositions,
answers to interrogatories, and admissions on file,’ designate
specific facts showing that there is a genuine issue for
trial.”

Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,

593-94 (11th Cir. 1995) (citing Celotex, 477 U.S. at 324).
If there is a conflict between the parties’ allegations
or evidence, the non-moving party’s evidence is presumed to be
true and all reasonable inferences must be drawn in the nonmoving party’s favor.

Shotz v. City of Plantation, Fla., 344

F.3d 1161, 1164 (11th Cir. 2003). If a reasonable fact finder
evaluating the evidence could draw more than one inference
from the facts, and if that inference introduces a genuine

10

issue of material fact, the court should not grant summary
judgment.

Samples ex rel. Samples v. City of Atlanta, 846

F.2d 1328, 1330 (11th Cir. 1988) (citing Augusta Iron & Steel
Works, Inc. v. Emp’rs Ins. of Wausau, 835 F.2d 855, 856 (11th
Cir. 1988)).
of

nothing

However, if the non-movant’s response consists
“more

allegations,”
required.

than

summary

a

repetition

judgment

is

of

not

his
only

conclusional
proper,

but

Morris v. Ross, 663 F.2d 1032, 1034 (11th Cir.

1981).
III. Analysis
The issue presented on summary judgment is whether
European’s alleged failure to give proper notice to Zurich of
the

Dalzell

lawsuit

and

European’s

alleged

cooperate with Zurich preclude coverage.

failure

to

The parties agree

that Florida law applies and this Court agrees.

In diversity

cases, the Court applies the substantive law of the forum
state unless federal constitutional or statutory law compels
a contrary result. Tech. Coating Applicators, Inc. v. U.S.
Fid. & Guar. Co., 157 F.3d 843, 844 (11th Cir. 1998). And this
Court must apply Florida law in the same manner that the
Florida Supreme Court would apply it. Brown v. Nichols, 8 F.3d
770, 773 (11th Cir. 1993).

See also Spaulding Decon, LLC v.

11

Crum & Foster Specialty Ins. Co., 158 F. Supp. 3d 1293, 1297
(M.D. Fla. 2016)(applying Florida law to diversity insurance
dispute).
A.

Notice of the Dalzell Action to Zurich

Notably, on July 13, 2007, a district court analyzed an
insurance policy similar to the applicable Zurich policy and
concluded: “Under Florida law, advertizing injury coverage for
‘oral or written publication of material that violates a
person’s right of privacy’ does not extend to unsolicited
facsimile

transmissions

of

commercial

advertisements.

Transportation therefore does not have a duty to indemnify the
plaintiffs for Southeast’s violations of the TCPA.” Penzer v.
Transp. Ins. Co., 509 F. Supp. 2d 1278, 1288 (S.D. Fla. 2007).
That decision was in effect at the time Dalzell sued European
in 2009.

However, on May 11, 2010, the Eleventh Circuit

reversed that decision and explained that, after certifying
the question to the Florida Supreme Court, “under Florida law,
the language of this insurance provision provides coverage for
infringements of the TCPA.” Penzer v. Transp. Ins. Co., 605
F.3d 1112, 1113 (11th Cir. 2010).
With a ruling from the Eleventh Circuit and the Florida
Supreme Court regarding coverage for “advertizing injuries”

12

stemming from unsolicited fax transmissions, Zurich seeks to
avoid making any payments to under the theory that its insured
-- European -- breached the insurance policy.

In its Motion

for Summary Judgment, Zurich argues: “European’s failure to
provide any

-- let alone timely -- written notice to Zurich

of the Underlying TCPA Action is a breach of the policies’
express notice condition which has resulted in prejudice to
Zurich, entitling it to summary judgment as a matter of
Florida law.” (Doc. # 57 at 14).
Zurich supplies the Court with a catalog of cases holding
that failure to comply with a policy provision requiring
timely notice of a suit establishes a basis for denial of
coverage.

See, e.g., Gemini II Ltd. v. Mesa Underwriters

Speciality Ins. Co., 592 Fed. Appx. 803, 806 (11th Cir.
2014)(affirming summary judgment finding of no coverage when
it was “undisputed that [the insured] never provided [the
insurer] with notice of the occurrence or claim that allegedly
triggered coverage, the initial suit brought by Gemini against
[the insured], or the default judgment entered against [the
insured].”)(emphasis

in

original);

Yacht

Club

on

the

Intercoastal Condo. Ass’n v. Lexington Ins. Co., 599 Fed.
Appx. 875, 878 (11th Cir. 2015)(notice to insurance company of
hurricane damage to property was not “prompt” as required by
13

the policy when provided four years and seven months after the
damage giving rise to the claim occurred); Nat’l Tr. Co. v.
Graham Bros. Constr., 916 F. Supp. 2d 1244, 1257 (M.D. Fla.
2013)(“Under Florida law, an insured’s failure to provide
‘timely notice of loss in contravention of a policy provision
is

a

legal

basis

for

the

denial

of

recovery

under

the

policy.’”)(citing Ideal Mut. Ins. Co. v. Waldrep, 400 So. 2d
782, 785 (Fla. 3d DCA 1981)).
“Most Florida cases treat the issue in a two step manner,
in which consideration must first be given to whether the
insured’s notice was untimely.” Id.

If the notice was

untimely, a presumption of prejudice arises, and “the insured
can

only

prevail

by

rebutting

the

presumption

and

demonstrating that no prejudice in fact occurred.” Id. (citing
Clena Invs., Inc. v. XL Specialty Ins. Co., No. 10-cv-62028,
2012 U.S. Dist. LEXIS 40503, at *4 (S.D. Fla. Mar. 26, 2012)).
“The insured’s burden is to show by competent evidence that
the insurer has not been substantially prejudiced by the lack
of notice or the untimely notice.” Id.
However, under Florida law, “one can waive the written
notice requirement when the carrier had actual notice of the
claim.” Gay v. Assoc. Cas. Ins. Co., 103 So. 3d 1028, 1031
(Fla. 5th DCA 2012)(reversing and remanding summary judgment
14

order that was entered in favor of the insurance company in
light of oral communications with insurance broker regarding
settlement of a claim); Moskowitz v. State Farm Mut. Auto.
Ins. Co., 646 So. 2d 262, 265 (Fla. 2d DCA 1994)(reversing and
remanding

summary

insurance

company

judgment
and

order

finding

that
that

was

in

insured

favor

of

could

be

“absolve[d] . . . from failure to follow the statutory
requirement of written notice” based on an oral communication
with insurance company’s employee).
Summary judgment is not appropriate on the issue Zurich
isolates in the Motion for Summary Judgment because there is
a genuine dispute of material fact regarding when -- if ever
-- European provided notice of the Dalzell suit to Zurich.
Dalzell’s position is that Ellis provided oral notice to
Zurich

of

the

Dalzell

suit

upon

being

complaint and without any delay whatsoever.

served

with

the

Zurich takes the

opposite position -- claiming that European never provided it
with notice of the suit, and that Zurich did not receive
notice of the lawsuit until years after service of the
Complaint and only after entry of the multimillion dollar
judgment against its insured.

According to Zurich, it was

Dalzell, not Ellis or European, that notified Zurich of the
underlying TCPA case and, at that point, it was too late to
15

defend.

The Court is not in a position to make the necessary

credibility determination.
The Court understands why Zurich relies upon Gemini II
Ltd. and Yacht Club on the Intercoastal Condo. Ass’n.

These

Eleventh Circuit cases are certainly binding, but were decided
on undisputed facts regarding the insured’s failure to provide
timely notice of a claim to the insurer. Here, there is a
material dispute regarding the timing and the form of the
provision of notice to Zurich. Zurich’s arguments in favor of
summary judgment are focused on alleged prejudice from not
receiving notice of the lawsuit until after entry of judgment,
but these arguments are predicated upon a factual finding that
has not been made.

It will be up to the finder of fact to

determine whether or not Zurich received oral notice at the
inception of the underlying suit, in accordance with Ellis’s
testimony.
The Court takes note of Zurich’s argument that Ellis’s
testimony that he provided oral notice of the suit to Zurich
is

“self-serving”

and

uncorroborated.

Zurich

indicates:

“Courts routinely hold that a person’s testimony standing
alone - without any other corroborating evidence - does not
create a substantial conflict in evidence and thus does not
give rise to a triable issue of fact.” (Doc. # 70 at 11).
16

Interestingly, Zurich cites to United States v. Davis, 809
F.2d 1509 (11th Cir. 1987). But, there, the Eleventh Circuit
emphasized that “[i]t is the function of the jury to observe
demeanor and listen to testimony in order to determine the
credibility of witnesses” and clarified that a court can
discount “unsupported, self-serving testimony” when “there
exists overwhelming direct evidence to contradict the selfserving testimony” or when the testimony is “so fantastic, so
internally inconsistent, or so speculative that it ha[s] no
probative value.” Id. at 1512-13. Ellis’s testimony is not so
dubious as to fall into these categories.
First, the Court does not see how Ellis’s testimony is
“self-serving” because Ellis is not a party to this lawsuit,
he is not named on the judgment, and he has been discharged of
all financial responsibility for the relevant lawsuit through
bankruptcy proceedings. Furthermore, his company, European, is
no longer in business.

As explained by Zurich’s own expert:

“European Tile Inc. was subject to foreclosure and ceased
operations in 2010. It had no assets and was administratively
dissolved in 2013. That same year, Ellis filed for bankruptcy
and was discharged by U.S. Bankruptcy Court for the Middle
District of Florida.” (Samore Rpt. Doc. # 57-5 at 50).

From

the record before the Court, it does not appear Ellis has
17

anything to gain from his testimony.

If Ellis’s testimony

advances any entity’s purposes, it is Dalzell, Inc., the
company that brought about Ellis’s complete financial demise.
Thus, it is hard to follow Zurich’s argument that Ellis’s
testimony is “self-serving.”
And, even if Ellis’s testimony is somehow “self-serving,”
it is better to let a jury consider the disputed evidence and
make a finding of fact, rather than to simply discredit one
party’s side of the story because it is not sufficiently
“corroborated.”

Zurich contends: “no reasonable jury could

find in Dalzell’s favor that notice was provided by European
to Zurich prior to February 2016, when Dalzell sued Zurich
seeking to collect the underlying judgment.” (Doc. # 70 at
13).

The Court disagrees.

Instead of usurping the role of

the jury, the Court determines that the fact-finders should
resolve the factual conflict presented.

Although Zurich

contests

not

Ellis’s

testimony,

Zurich

has

shown

that

overwhelming direct evidence contradicts that testimony.

Nor

has Zurich demonstrated that Ellis’s testimony is fantastical,
speculative,

or

internally

inconsistent

such

that

it

is

totally lacking in probative value.
The Court “must view all the evidence and all factual
inferences reasonably drawn from the evidence in the light
18

most favorable to the nonmoving party, and must resolve all
reasonable doubts about the facts in favor of the non-movant.”
Rioux v. City of Atlanta, 520 F.3d 1269, 1274 (11th Cir.
2008). The Court denies motions for summary judgment when
there is a genuine issue as to a material fact. McCormick v.
City of Fort Lauderdale, 333 F.3d 1234, 1243 (11th Cir. 2003).
“[T]he

court

may

not

weigh

conflicting

evidence

to

resolve disputed factual issues; if a genuine dispute is
found, summary judgment must be denied.” Carlin Commc’n, Inc.
v. S. Bell Tel. & Tel. Co., 802 F.2d 1352, 1356 (11th Cir.
1986).

“Credibility

determinations

and

the

weighing

of

evidence are jury functions, and the jury should [be] allowed
to

decide

whether

it

believe[s]

[a

party’s]

version

of

events.” Jarmon v. Vinson Guard Servs., 488 Fed. Appx. 454,
457 (11th Cir. 2012).

Accordingly, the Motion for Summary

Judgment is denied to the extent that Motion is premised on
the failure to properly and timely notify Zurich of the
Dalzell lawsuit.
B.

Duty of Cooperation with Zurich

Zurich also asserts that Ellis had a duty to cooperate
with Zurich in an attempt to challenge the multimillion dollar
judgment years after entry of that judgment. And that Ellis’s
failure to cooperate prevents the provision of insurance
19

coverage. Zurich correctly explains that under governing
Florida law, an insurer may deny coverage based on the
insured's failure to cooperate.
Basdeo,

477

Fed.

Appx.

702,

Mid-Continent Cas. Co. v.
706-07

(11th

Cir.

2012).

Specifically, “coverage may be denied so long as (1) the lack
of

cooperation

was

material,

(2)

the

insurer

exercised

diligence and good faith in bringing about the cooperation of
its insured and itself complied in good faith with the terms
of the policy and (3) the lack of cooperation substantially
prejudiced the insurer." Id. (internal citation omitted).
There are multiple unresolved factual issues that a jury
must address before any analysis of these factors may begin.
For instance, if the jury credits Ellis’s testimony, how can
Zurich show that it acted in good faith with the terms of the
policy?

Likewise, if the jury determines that Ellis provided

timely oral notice of Dalzell’s suit, how can Zurich now claim
any prejudice? The Court cannot decide the cooperation issues
presented in the Motion for Summary Judgment because the
factual dispute regarding whether Ellis actually provided oral
notice of the suit to Zurich in a timely manner, as elaborated
upon above, is unresolved.

The Court accordingly denies the

Motion for Summary Judgment to the extent it is based on the
insureds’ alleged failure to cooperate.
20