Lawrence v. Ace American Insurance Company

Filing 82

ORDER granting in part and denying in part 73 motion to dismiss; granting in part and denying in part 74 motion to dismiss. Signed by Judge Susan C. Bucklew on 11/28/2018. (JD)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
WILLIAM LAWRENCE,
Plaintiff,
v.

Case No. 8:18-cv-738-T-24 TGW

ACE AMERICAN INSURANCE
COMPANY,
Defendant.
______________________________
USAA CASUALTY INSURANCE
COMPANY, individually and as equitable
and contractual subrogee of Benjamin
Wintersteen,
Intervenor,
v.
ACE AMERICAN INSURANCE
COMPANY,
Intervenor-Defendant.
________________________________/
ORDER
This cause comes before the Court on two motions: (1) ACE American Insurance
Company’s (“ACE”) Motion to Dismiss Lawrence’s Second Amended Complaint (Doc. No. 74);
which Lawrence opposes (Doc. No. 77); and (2) ACE’s Motion to Dismiss USAA Casualty
Insurance Company’s (“USAA”) Second Amended Complaint in Intervention (Doc. No. 73),
which USAA opposes (Doc. No. 76). As explained below, the motions are granted in part and
denied in part.

I. Standard of Review
In deciding a motion to dismiss, the district court is required to view the complaint in the
light most favorable to the plaintiff. See Murphy v. Federal Deposit Ins. Corp., 208 F.3d 959,
962 (11th Cir. 2000)(citing Kirby v. Siegelman, 195 F.3d 1285, 1289 (11th Cir. 1999)). The
Federal Rules of Civil Procedure do not require a claimant to set out in detail the facts upon
which he bases his claim. Instead, Rule 8(a)(2) requires a short and plain statement of the claim
showing that the pleader is entitled to relief in order to give the defendant fair notice of what the
claim is and the grounds upon which it rests. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007)(citation omitted). As such, a plaintiff is required to allege “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id.
(citation omitted). While the Court must assume that all of the allegations in the complaint are
true, dismissal is appropriate if the allegations do not “raise [the plaintiff’s] right to relief above
the speculative level.” Id. (citation omitted). The standard on a 12(b)(6) motion is not whether
the plaintiff will ultimately prevail in his or her theories, but whether the allegations are
sufficient to allow the plaintiff to conduct discovery in an attempt to prove the allegations. See
Jackam v. Hospital Corp. of Am. Mideast, Ltd., 800 F.2d 1577, 1579 (11th Cir. 1986).
II. Background1
Plaintiff William Lawrence and USAA allege the following in their second amended
complaints (Doc. No. 71, 72): ACE issued a business auto policy to Jacobs Engineering Group,
Inc./Jacobs Technology (“Jacobs”). (Doc. No. 63). On August 18, 2014, Jacobs’ employee,

1

The parties have agreed that the operative insurance policy in this case is located at
Document Number 63. (Doc. No. 62, 63, 64, 65, 66, 68, 69).
2

Benjamin Wintersteen, caused a car accident that injured Lawrence.
At the time of the accident, Wintersteen was driving a car leased by Hertz, because
Jacobs was in the process of transferring Wintersteen to work in Germany for Jacobs. Jacobs had
taken possession of Wintersteen’s personal car in order to transport it to Germany. Because
Wintersteen still needed a vehicle for personal errands and to travel to and from work for Jacobs
prior to his move to Germany, Jacobs paid for the car leased from Hertz that Wintersteen had
been driving at the time of the accident. The Hertz receipt lists Wintersteen’s name along with
“Jacobs Technology” and states that Wintersteen represents that he is authorized to receive the
CDP benefits offered to employees of Jacobs Technology.2 (Doc. No. 72-1).
Prior to the lease of the car at issue, Jacobs and Hertz had entered into a Corporate
Customer Agreement (“CCA”), in which Jacobs agreed to use Hertz as its rental car supplier.
(Doc. No. 71-4, p. 2, 8). The CCA provides that Hertz will provide $100,000 in bodily injury
coverage for Jacobs’ employee-renters. (Doc. No. 71-4, p. 7). However, the CCA also provides
that Jacobs, on behalf of itself and its employee-renters, rejects the inclusion of any
supplementary insurance coverage in Hertz’s rental agreements. (Doc. No. 71-4, p. 7).
Wintersteen did not get additional insurance coverage through Hertz for the leased car,
because Jacobs instructed him not to get such coverage because Jacobs believed that the leased
car had insurance coverage under the ACE insurance policy. According to Lawrence,
“[r]epresentatives of Jacobs had been advised by representatives of [ACE] that the [ACE] policy
would afford coverage for employees of Jacobs who were in a position like Wintersteen. Thus,
Wintersteen and Jacobs both detrimentally relied on representations made by [ACE] that the
2

CDP refers to Hertz’s Customer Discount Program.
3

[ACE] policy would afford coverage for Mr. Wintersteen's use of the Hertz vehicle.” (Doc. No.
72, ¶ 17).
As a result of the car accident, Lawrence sued Wintersteen in state court. Wintersteen
had insurance coverage through his own insurance policy with USAA, and he also made a claim
for coverage under ACE’s insurance policy that was issued to Jacobs. Wintersteen contended
that he was an insured under the ACE policy because: (1) Jacobs provided Wintersteen with use
of the leased car in conjunction with Wintersteen’s employment activities for Jacobs; (2) the
lease of the car was for the benefit of Jacobs and was part of its employment arrangement with
Wintersteen; and (3) Wintersteen was entitled to insurance coverage based on promissory
estoppel. ACE denied Wintersteen a defense and coverage under the policy.
Thereafter, Lawrence, Wintersteen, and USAA (collectively referred to as “the Settling
Parties”) stipulated to an entry of a consent judgment to resolve Lawrence’s claims from the car
accident and to provide a vehicle under which part of the consent judgment could be collected
from ACE. Specifically, the Settling Parties intended that ACE would be required to pay the
amount of the consent judgment that it was legally required to pay had it honored its coverage
obligations under Jacobs’ insurance policy.
The Settling Parties stipulated that Lawrence’s damages from the car accident were
$750,000, and they agreed to the entry of a $750,000 consent judgment in favor of Lawrence and
against Wintersteen. In partial satisfaction of the consent judgment, Hertz paid Lawrence
$100,000, and USAA paid Lawrence $250,000. Thus, $350,000 was paid by Hertz and USAA
on Wintersteen’s behalf. In exchange for the $350,000 and an agreement not to execute against
Wintersteen on the unpaid $400,000 remaining, Wintersteen assigned to Lawrence all of his
4

rights against ACE, including but not limited to, any and all of Wintersteen’s insurance rights
and benefits, as well as claims for attorney's fees, costs, and expenses. The Settling Parties also
noted in their Settlement Agreement that they agreed that if ACE’s policy did provide coverage
for the accident, then ACE should have paid 97.09% of the $250,000 that USAA paid and that
USAA should have only paid 2.91% of that amount.3 (Doc. No. 71-3, p. 3).
As a result of the above, Lawrence has asserted two claims against ACE: (1) declaratory
judgment of insurance coverage and payment of the remaining $400,000 in damages due under
the consent judgment; and (2) insurance coverage based on promissory estoppel. Similarly,
USAA has asserted four claims against ACE: (1) equitable contribution; (2) unjust enrichment;
(3) declaratory judgment of insurance coverage and payment of $242,725 in damages; and (4)
insurance coverage based on promissory estoppel. In response, ACE has filed the instant
motions to dismiss.
III. ACE’s Motion to Dismiss Lawrence’s Second Amended Complaint
ACE moves to dismiss Lawrence’s second amended complaint, arguing that: (1)
Wintersteen was not an insured under the insurance policy at the time of the accident; and (2)
Lawrence’s promissory estoppel claim is not sufficiently pled. Accordingly, the Court will
address each argument.
A. Insured Under the Insurance Policy
ACE argues that Lawrence has not made sufficient allegations in the second amended
3

USAA contends that ACE should have paid 97.09% of the $250,000 paid by USAA due
to their pro rata shares of insurance coverages: ACE provided $10,000,000 of the total
$10,000,000 (ACE) and $300,000 (USAA) combined coverages, which equals 97.09% of the
combined coverages. Thus, USAA contends that ACE owes it $242,725. The Settlement
Agreement contains a typographical error and states that 97.09% of $250,000 equals $242,275.
5

complaint to show that Wintersteen was an insured under the ACE insurance policy, and as such,
his claim for declaratory judgment of insurance coverage and payment of $400,000 in damages
fails. Lawrence responds that Wintersteen is an omnibus insured under any of the following
three policy provisions: (1) Jacobs’ Hired Autos; (2) Employees as Insureds; and/or (3)
Employee Hired Autos. Accordingly, the Court will analyze each of these policy provisions.
1. Principles Governing Interpretation of Insurance Policies
The parties agree that California law applies in construing the parties’ obligations under
the ACE policy. (Doc. No. 74, p. 7; Doc. No. 76, p. 5; Doc. No. 77, p. 7). The California
Supreme Court has explained the principles governing the interpretation of insurance policies:
[The] goal in construing insurance contracts . . . is to give effect to the
parties' mutual intentions. If contractual language is clear and
explicit, it governs. If the terms are ambiguous [i.e., susceptible of
more than one reasonable interpretation], [courts] interpret them to
protect the objectively reasonable expectations of the insured. Only
if these rules do not resolve a claimed ambiguity do [courts] resort to
the rule that ambiguities are to be resolved against the insurer. . . . To
further ensure that coverage conforms fully to the objectively
reasonable expectations of the insured, the corollary rule of
interpretation has developed that, in cases of ambiguity, basic
coverage provisions are construed broadly in favor of affording
protection . . . . The existence of a material ambiguity in the terms of
an insurance policy may not, of course, be determined in the abstract,
or in isolation. The policy must be examined as a whole, and in
context, to determine whether an ambiguity exists.
Minkler v. Safeco Ins. Co. of America, 232 P.3d 612, 616 (Cal. 2010)(quotation marks and
internal citations omitted).
2. Jacobs’ Hired Autos
First, Lawrence contends that the leased car at issue is a covered auto under the “Hired
Autos” provision, which defines covered “Hired ‘Autos’” as including only those autos leased,
6

hired, rented, or borrowed by Jacobs. (Doc. No. 63-8, p. 14). The policy goes on to state that an
“insured” includes anyone “while using with [Jacobs’] permission a covered ‘auto’ [Jacobs] . . .
hire[s] or borrow[s].” (Doc. No. 63-8, p. 15).
ACE argues that Wintersteen, not Jacobs, rented the car involved in the accident, and as
such, Wintersteen is not an insured under the “Hired Autos” provision. Lawrence responds by
pointing out that he has specifically alleged in the second amended complaint that Jacobs leased,
hired, and/or rented the car involved in the accident.4 (Doc. No. 72, ¶ 27).
Furthermore, Lawrence alleges facts to support his contention that Jacobs leased, hired,
and/or rented the car at issue, including the following: Jacobs provided Wintersteen with the use
of the rented car in conjunction with his employment with Jacobs, because: (1) Jacobs took
possession of Wintersteen’s personal car to ship it to Germany where Wintersteen was being
relocated for work; and (2) Wintersteen needed a car to get to and from work for Jacobs until his
relocation to Germany. Jacobs had an agreement with Hertz (the CCA) that Hertz would provide
rental cars for Jacobs and its employees, and the car at issue was rented pursuant to the CCA.
Additionally, Jacobs paid for the rental car at issue, some of Jacobs’ information was on the
rental documentation, and Wintersteen used the car to travel to and from work.
ACE’s policy does not define “hire,” and case law exists that supports Lawrence’s
argument that the underlying facts support the conclusion that Jacobs hired the car at issue. For
example, in Abrams v. Trunzo, 129 F.3d 1174 (11th Cir. 1997), the Eleventh Circuit applied
California law to similar facts and found that the employer had hired the car at issue.
In Trunzo, an employee of the government was involved in a car accident while on a
4

USAA’s second amended complaint contains that same allegation. (Doc. No. 71, ¶ 11).
7

temporary work assignment and while driving a rental car. See id. at 1175. The issue before the
court was whether the government-employer hired the rental car the employee was driving at the
time of the accident. See id. at 1177. The court stated that the employer could be deemed to
have hired the car if the employee acted as the employer’s agent and with actual authority when
renting the car. See id. The court found that the employee exercised implied, actual authority to
rent the car and that the employer hired the car through the employee’s actions. See id. In
coming to that conclusion, the court stated:
[The employee’s] sole reason for requiring the use of a rental car is
a direct result of his military orders. His travel orders included
specific instructions to rent a car from Holiday Payless Rent-A-Car.
The car was reserved by the Scheduled Airline Traffic Office (SATO)
at McClellan Air Force Base in California. Holiday Payless had
negotiated an agreement with the United States to rent cars on special
terms to Government employees on official business. . . . Though the
Government reimbursed [the employee] for the cost of the rental car
and gas and no direct billing occurred here, the existence of the
[direct billing] option further illustrates the level of control that the
Government had over the transaction, and over [the employee].
Pursuant to that agreement, [the employee] indicated on the rental
form that he was renting the car for official military business,
relieving him of the responsibility of leaving a security deposit.
California agency law mandates that [the employee] had implied,
actual authority to hire the car, and that therefore the rental can be
imputed to the government.
Id. at 1177–78.
Like Trunzo, Wintersteen rented the car in connection with his work for Jacobs. Jacobs
had an agreement with Hertz to supply rental cars to Jacobs and its employees. Additionally,
Jacobs was listed on a part of the rental agreement, and Jacobs paid for the rental car. As such,
Trunzo supports Lawrence’s argument that Jacobs hired the rental car, and the “Hired Autos”
provision would make Wintersteen an insured because he was using the rental car with Jacobs’
8

permission. Cases in other states applying non-California law have come to the same conclusion.
See Potomac Ins. Co. of Ill. v. Adams, 997 So. 2d 238, 240 (C.A. Miss. 2008)(“Although the
rental contract was filled out with [the employee’s] name listed, it was clear that [the employer]
was the true lessee of the vehicle. The car was rented solely for [the employer’s] business
purposes, and the rental was paid for entirely by [the employer]. As such, the vehicle was . . .
“leased” by [the employer].”); Pawtucket Mut. Ins. Co. v. Hartford Ins. Co., 787 A.2d 870, 873
(N.H. 2001)(“Under the common definition of ‘hire’ . . ., it is clear that [the employer], via [the
employee], contracted and paid for the temporary use of the rental vehicle. A corporate entity can
only operate through individuals. . . . The facts show that [the employer] had specifically
authorized [the employee] to use his company credit card to rent the vehicle for his [vacation] to
Florida.”); Royal Indem. Co. v. Metropolitan Cas. Ins. Co. of New York, 128 N.W.2d 111, 112
(S.Dak. 1964)(finding that the employee was the agent of the employer when renting the car at
issue, and thus the employer was the renter or lessee of the car, even though the employee’s name
was listed on the rental agreement as the renter, because the employer directed the employee to
rent the car for the purpose of traveling for work and the rental car was paid for using a companyissued credit card).
The Court notes that ACE cites to a California case in which the court did not find that
the employer hired the car at issue. In Continental Casualty Co. v. Hartford Accident &
Indemnity Co., 213 Cal. App.2d 78, 80 (1963), the employee rented a car and was driving it for
business purposes when he was involved in an accident. The car was rented in the employee’s
name and was invoiced to the employee at his home address. See id. at 89–90. The employer
reimbursed the employee for the rental car charges. See id. at 80.
9

One of the issues before the court was whether the rented car was “hired” by the
employer, because if it was, coverage was excluded under the insurance policy. See id. at 88.
The insurance policy defined “hired automobile” as “an automobile used under contract in behalf
of . . . the [employer].” See id. at 89. The court concluded that the rental car was not a car hired
by the employer, stating:
Thus it appears that [the employee] rented the automobile involved
in his own name. There is no basis in the facts that when he did so he
was acting for or with the consent of [the employer]. It would be
consistent with the facts here stipulated to that [the employee] was to
obtain transportation on his own account and personal responsibility
and that his employer would not be responsible therefor, even though
it might subsequently reimburse the employee for travel expenses.
[The defendant insurance company] has referred us to no authorities
holding that an automobile rented by the employee in his own name
is a “hired automobile” as that term is defined in the policy under
examination. In the light of the applicable principles of construction
stated above [that ambiguities are resolved against the insurer and
doubts about coverage will be construed in the most inclusive sense,
for the benefit of the insured] and under the above facts found by the
trial court, we therefore conclude that the automobile in question was
not a hired automobile . . . .
Id. at 90 (internal citation omitted).
The Continental Casualty case is distinguishable from the instant case in three important
respects. First, in the instant case, it is alleged that Wintersteen rented the car with Jacob’s
consent. Second, as explained above, the case law has grown and there are cases that conclude
that an employer can be found to have hired a rental car even though the employee rents the car
in his own name. Third, the Continental Casualty court stated that it came to its conclusion after
considering principles of construction, including that ambiguities are resolved against the insurer
and doubts about coverage will be construed in the most inclusive sense, for the benefit of the

10

insured. Accordingly, the Court denies ACE’s motion to dismiss to the extent that it contends
that Lawrence has not sufficiently alleged that the ACE policy provides coverage for the accident
under the “Hired Autos” provision.
3. Employees as Insureds
Second, Lawrence argues that if Jacobs is found not to have hired the rental car, then the
rental car is a covered auto under Endorsement Number 77, which is titled, “EMPLOYEES AS
INSUREDS.” (Doc. No. 63-1, p. 104). This Endorsement provides the following: “Any
‘employee’ of [Jacobs] is an ‘insured’ while using a covered ‘auto’ [Jacobs does not] own, hire,
or borrow in [Jacobs’] business or [Jacobs’] personal affairs.” (Doc. No. 63-1, p. 104). The
policy defines “Non-owned ‘Autos’” as “those ‘autos’ [Jacobs] do[es] not own, lease, hire, rent
or borrow that are used in connection with [Jacobs’] business.” (Doc. No. 63-8, p. 14).
ACE moves for dismissal, arguing that at the time of the accident, Wintersteen was not
using the rental car in connection with Jacobs’ business. ACE, however, bases this argument on
facts that are not alleged in the second amended complaint. Instead, ACE relies on facts that
came to light during the underlying car accident case.
Lawrence contends that at the time of the accident, Wintersteen was using the rental car
in Jacobs’ business or personal affairs, because Wintersteen had the rental car because Jacobs
had taken possession of Wintersteen’s personal car to transport it to Germany for his job, and
Wintersteen needed a car prior to his relocation to Germany. Thus, Wintersteen’s use of the
rental car benefitted Jacobs by: (1) allowing Jacobs to relocate Wintersteen and his car to
Germany; and (2) providing Wintersteen with transportation to and from work prior to the
relocation. Lawrence argues that even if Wintersteen was using the rental car for a personal
11

errand at the time of the accident, Wintersteen’s use of the rental car at all times was tied to and
related to his business relationship with Jacobs, thus bringing the accident within this coverage
provision.
At this stage in the litigation, based on the facts alleged in the second amended complaint,
the Court finds that Lawrence states a plausible claim for coverage under the “Employees as
Insureds” provision (although ACE also makes a plausible argument that coverage does not
exist). The Court notes that coverage under this provision exists if: (1) Jacobs did not rent the
rental car, and (2) Wintersteen was using the rental car (a) in Jacobs’ business affairs, or (b) in
Jacobs’ personal affairs. It is unclear to this Court what Jacobs’ “personal affairs” can consist of,
and that phrase is not defined in the insurance policy. Some courts have found that phrase to be
ambiguous at the pretrial stage of proceedings. See Lincoln General Ins. Co. v. Gateway Security
Services, 2007 WL 3203020, at *14 (E.D. Cal. Oct. 29, 2007)(“The concept of ‘personal affairs’
of an entity is anomalous because an entity, although a ‘person’ in the eyes of the law, does not
engage in ‘personal activities.’ This creates ambiguity.”); Blais v. Hartford Fire Ins. Co.. 2011
WL 1303135, at *11 (D. Mass. Mar. 30, 2011)(evaluating the phrase “your business or personal
affairs” and commenting that “a corporation cannot have ‘personal affairs.’”); Robart v. Horvath,
2002 WL 185179, at *3–4 (C.A. Ohio 2002). Given the ambiguity and both parties’ plausible
interpretations, the Court denies ACE’s motion to dismiss to the extent that it contends that
Lawrence has not sufficiently alleged that the ACE policy provides coverage for the accident
under the “Employees as Insureds” provision.
4. Employee Hired Autos
Third, Lawrence alleges in his second amended complaint that the leased car at issue is a
12

covered auto under Endorsement Number 283, which is titled, “EMPLOYEE HIRED AUTOS.”
(Doc. No. 63-7, p. 1). This Endorsement provides the following: “An ‘employee’ of [Jacobs] is
an ‘insured’ while operating an ‘auto’ hired or rented under a contract or agreement in an
‘employee’s’ name, with [Jacobs’] permission, while performing duties related to the conduct of
[Jacobs’] business.” (Doc. No. 63-7, p. 1).
ACE argues that Endorsement Number 283 does not provide coverage for the August 18,
2014 accident, because Endorsement Number 283, according to the policy documents, did not
become effective until September 10, 2014—after the date of the accident. (Doc. No. 63-6, p.
23). Lawrence fails to respond to this argument, and as such, the Court deems his failure to
respond as an acknowledgment that Endorsement Number 283 does not provide coverage for the
accident. Accordingly, the Court grants ACE’s motion to dismiss to the extent that it contends
that its policy does not provide coverage for the accident under Endorsement Number 283.
B. Promissory Estoppel
In Count II, Lawrence alleges insurance coverage for the accident based on promissory
estoppel. Specifically, Lawrence alleges “[r]epresentatives of Jacobs had been advised by
representatives of [ACE] that the [ACE] policy would afford coverage for employees of Jacobs
who were in a position like Wintersteen. Thus, Wintersteen and Jacobs both detrimentally relied
on representations made by [ACE] that the [ACE] policy would afford coverage for Mr.
Wintersteen's use of the Hertz vehicle.” (Doc. No. 72, ¶ 17).
Using promissory estoppel to create insurance coverage is available in a very narrow set
of circumstances where to refuse to do so would sanction fraud or other injustice. See Ohio Cas,
Ins. Co. v. Garden of Eat’N of Tampa, 2011 WL 3879512, at *7 (M.D. Fla. Sept. 2, 2011). In
13

order to do so, the plaintiff must allege the following: “an insurer or its agent misrepresents, even
though innocently, the coverage of the insurance contract, or the exclusions therefrom, to an
insured before or at the inception of the contract; and the insured reasonably relies thereupon to
his ultimate detriment.” Southtrust Bank and Right Equipment Co. of Pinellas County, Inc. v.
Export Ins. Services, Inc., 190 F. Supp.2d 1304, 1311 (M.D. Fla. Feb. 19, 2002)(citations
omitted).
ACE moves to dismiss Lawrence’s promissory estoppel claim, arguing that it is not
sufficiently pled.5 Specifically, ACE contends that there are not sufficient factual allegations
regarding: (1) who at ACE spoke to whom at Jacobs, (2) when this conversation occurred, and
(3) the specific details of the conversation.
The Court agrees that specific factual detail is lacking, but Lawrence should be permitted
to conduct discovery before more specific factual information is required. At this stage of the
litigation, Lawrence has asserted sufficient allegations to put ACE on notice of his promissory
estoppel claim. Accordingly, the Court denies ACE’s motion to dismiss Lawrence’s promissory
estoppel claim.
IV. ACE’s Motion to Dismiss USAA’s Second Amended Complaint
USAA has asserted four claims against ACE: (1) equitable contribution; (2) unjust
enrichment; (3) declaratory judgment of insurance coverage and payment of $242,725 in
damages; and (4) insurance coverage based on promissory estoppel. ACE moves to dismiss all
four claims asserted by USAA. Accordingly, the Court will analyze each claim.
5

Alternatively, ACE asks the Court to convert its motion to a motion for summary
judgment as to the promissory estoppel claim. Lawrence objects to converting the motion,
arguing that more discovery is required. The Court agrees with Lawrence that it is premature at
this time to convert this portion into a motion for summary judgment, as Lawrence should be
allowed to conduct additional discovery first.
14

A. Declaratory Judgment and Damages
USAA asserts a claim for declaratory judgment of insurance coverage and payment of
$242,725 in damages. This claim is based on the contention that Wintersteen was an insured
under ACE’s policy at the time of the accident, and USAA makes the same coverage arguments
as made by Lawrence. Specifically, USAA contends that Wintersteen was an omnibus insured
under any of the following three policy provisions: (1) Jacobs’ Hired Autos; (2) Employees as
Insureds; and/or (3) Employee Hired Autos.
1. Jacobs’ Hired Autos and Employees as Insured Provisions
ACE moves to dismiss this claim, making the same arguments as it did in response to
Lawrence’s claim for declaratory judgment and damages. ACE’s motion and USAA’s response
as to two provisions—(1) Jacobs’ Hired Autos and (2) Employees as Insureds—are nearly
identical to the motion and response directed to Lawrence’s claim. As such, and for the same
reasons, the Court denies ACE’s motion to dismiss to the extent that it contends that USAA has
not sufficiently alleged that the ACE policy provides coverage for the accident under those two
provisions.
2. Employee Hired Autos Provision
ACE’s argument as to USAA’s contention that the Employee Hired Autos provision
applies is the same as was directed to Lawrence’s contention that the Employee Hired Autos
provision applies. While Lawrence failed to respond to ACE’s argument, USAA does respond,
and therefore, the Court must analyze the Employee Hired Autos provision.
USAA contends that the leased car at issue is a covered auto under Endorsement Number
283, which is titled, “EMPLOYEE HIRED AUTOS.” (Doc. No. 63-7, p. 1). This Endorsement
15

provides the following: “An ‘employee’ of [Jacobs] is an ‘insured’ while operating an ‘auto’
hired or rented under a contract or agreement in an ‘employee’s’ name, with [Jacobs’]
permission, while performing duties related to the conduct of [Jacobs’] business.” (Doc. No. 637, p. 1).
ACE argues that Endorsement Number 283 does not provide coverage for the August 18,
2014 accident, because Endorsement Number 283, according to the policy documents, did not
become effective until September 10, 2014—after the date of the accident. (Doc. No. 63-6, p.
23). In response, USAA argues that ACE has previously stated that whether Endorsement
Number 283 was in effect at the time of the accident was “a factual issued that need[ed] to be
resolved during discovery.” (Doc. No. 60, ¶ 4). However, USAA takes ACE’s statement out of
context; the statement was made when the parties could not agree on the operative version of the
ACE insurance policy. Since that time, the parties have agreed that the operative insurance
policy has been filed on the docket at Document Number 63, and that document clearly states
that Endorsement Number 283 did not become effective until September 10, 2014—after the date
of the accident.6 (Doc. No. 63-6, p. 23). Accordingly, the Court grants ACE’s motion to dismiss
to the extent that it contends that its policy does not provide coverage for the accident under

6

The Court may consider the statements contained in Endorsement Number 283 even
though the full insurance policy is not attached to USAA’s second amended complaint, because
the Court directed USAA not to attach the entire policy again due to it already being filed at
Document Number 63. (Doc. No. 69). The parties agreed that the insurance policy filed at
Document Number 63 was the operative insurance policy, they referred to it in their second
amended complaints, and the insurance policy is clearly central to Lawrence and USAA’s claims.
See Patel v. Sepcialized Loan Servicing, LLC, 904 F.3d 1314, 1318 n.3 (11th Cir. 2018)(stating
that a court can consider a document not attached to the complaint when the plaintiff refers to the
document in the complaint, the document is central to the plaintiff’s claims, and its contents are
not in dispute).
16

Endorsement Number 283.
B. Equitable Contribution7
USAA asserts a claim for equitable contribution against ACE. Specifically, USAA
alleges that ACE’s policy provides coverage for the accident, and as such, ACE should have paid
97.09% of the $250,000 that USAA paid to settle Lawrence’s claim against Wintersteen. As a
result, USAA seeks payment from ACE of $242,725 of the $250,000 that USAA paid towards
Lawrence’s damages in the underlying state court lawsuit.
ACE moves to dismiss this claim, arguing that Florida does not recognize a cause of
action for equitable contribution between co-insurers. The flaw in this argument, however, is
that Florida does not recognize a cause of action for equitable contribution by co-insurers in
order to recover defense costs. Liberty Mutual Fire Ins. Co. v. Wal-Mart Stores East, LP, 269 F.
Supp.3d 1254, 1264 (M.D. Fla. 2017). USAA is not seeking to recover its defense costs in the
underlying litigation, and as such, this argument for dismissal has no merit.
Florida does recognize a cause of action for equitable contribution by co-insurers for the
amounts the insurer paid to indemnify the insured. See id. As explained by one court:
The doctrine of equitable contribution attempts to ensure that the
burden of performing a common obligation is equally distributed
between those who have the obligation. When a party has paid in
excess of its pro rata share of the obligation, it is entitled by law to
contribution from the other parties for their share.
Id. (internal citations omitted).
In order to state a claim for equitable contribution, USAA must allege that it paid in

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The parties both agree that Florida law applies to this claim. (Doc. No. 73, p. 14; Doc.
No. 76, p. 4–5).
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excess of its pro rata share of a common liability shared by USAA and ACE. See id.; Zurich
Am. Ins. Co. v. Southern-Owners Ins. Co., 248 F. Supp.3d 1268, 1291 (M.D. Fla. 2017). In its
second amended complaint, USAA alleges that it is seeking equitable contribution for the
amount it paid in excess of its pro rata share to settle Lawrence’s claim, because ACE was also
obligated to provide coverage for Lawrence’s claim. As such, USAA has sufficiently alleged a
claim for equitable contribution, and ACE’s motion to dismiss this claim is denied.
C. Unjust Enrichment8
USAA asserts a claim for unjust enrichment against ACE. Specifically, USAA alleges
that by paying the $250,000 towards the settlement of Lawrence’s claim against Wintersteen,
USAA conferred a benefit upon ACE. USAA further alleges that ACE accepted that benefit by
not contributing any money towards the settlement of Lawrence’s claim despite the fact ACE’s
insurance policy covered Lawrence’s claim. Therefore, USAA contends that it is inequitable and
unfair for USAA to pay the entire $250,000, since both ACE and USAA insured Wintersteen on
an equal basis.
ACE moves to dismiss this claim, arguing that USAA cannot assert an unjust enrichment
claim because an express contract exists—namely, the ACE insurance policy sets forth ACE’s
obligations. The flaw in ACE’s argument, however, is that USAA is not a party to the ACE
insurance policy, and as such, the existence of the ACE insurance policy does not bar USAA’s
unjust enrichment claim. See Commercial Repairs & Sales, LLC v. Signet Jewelers Ltd., 2018
WL 3068067, at *2 (M.D. Fla. Feb. 20, 2018)(stating that “Florida law bars unjust enrichment

8

It appears that USAA and ACE agree that Florida law applies to this claim. (Doc. No.
73, p. 15; Doc. No. 76, p. 4–5).
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claims only when both parties to the lawsuit are also parties to a written agreement that covers
the same subject matter”). Furthermore, another court has allowed an unjust enrichment claim to
proceed by one insurer against a co-insurer for amounts the plaintiff-insurer paid towards
settlement of a claim allegedly covered by both insurers’ insurance policies. See National Fire
Ins. Co. of Hartford v. FCCI Commercial Ins. Co., 2016 WL 501943, at *2 (M.D. Fla. Feb. 9,
2016). Accordingly, the Court denies ACE’s motion to dismiss USAA’s unjust enrichment
claim.
D. Promissory Estoppel9
USAA asserts a claim for promissory estoppel against ACE. Specifically, USAA alleges
that Jennifer Petr, the person at Jacobs responsible for travel logistics, told Wintersteen not to
purchase additional insurance coverage for the rental car because ACE confirmed that insurance
coverage for the rental car was provided by the ACE policy. USAA further alleges that
Wintersteen detrimentally relied on the alleged representations made by ACE.
USAA contends that its insurance policy that covered Wintersteen in the accident has a
subrogation provision that allows USAA to assert this promissory estoppel claim against ACE.
Specifically, USAA points to the following provision in its policy: “If [USAA] make[s] a
payment under this policy and the person . . . for whom payment was made has a right to recover
damages from another, [USAA] will be subrogated to that right.” (Doc. No. 71-1, p. 20 of 33).
Thus, USAA contends that because it made a settlement payment to Lawrence on Wintersteen’s
behalf, and because Wintersteen has a right to recover payment from ACE under a promissory

9

It appears that USAA and ACE agree that Florida law applies to this claim. (Doc. No.
73, p. 16–17; Doc. No. 76, p. 15–19).
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estoppel theory, USAA stands in the shoes of Wintersteen to assert a claim for promissory
estoppel for the amount that USAA paid that should have been paid by ACE.
Additionally, USAA alleges that principles of equitable subrogation apply, which allows
USAA to stand in the shoes of Wintersteen to assert a claim for promissory estoppel for the
amount that USAA paid that should have been paid by ACE. In response, ACE moves to
dismiss this claim, arguing that principles of equitable subrogation do not apply; ACE does not
address contractual subrogation based on the USAA insurance policy.
There are two types of subrogation in Florida: (1) conventional or contractual
subrogation, and (2) equitable subrogation. See Peninsula II Developers, Inc. v. Gryphon
Construction, LLC, 208 So. 3d 1239, 1240 (Fla. 3d DCA 2017); Columbia Cas. o. v. Ker, Inc.,
2008 WL 11338289, at *4 (M.D. Fla. Oct. 29, 2008). Both types of subrogation can be
explained as follows:
[S]ubrogation provides relief when one [party] satisfies the legal
obligations of another. The party paying the debt of another, the
subrogee, stands in the shoes of the subrogor and is entitled to all of
the rights of its subrogor. The purpose of subrogation is to do justice
without regard to form. The policy rationale behind subrogation is to
prevent one person from being unjustly enriched by another person’s
loss.
Columbia Cas., 2008 WL 11338289, at *4 (quotation marks and citations omitted).
USAA has grounded its promissory estoppel claim on both types of subrogation, but
differences exist between them. Conventional or contractual subrogation arises when the parties
contractually agree that the party paying the debt will have the rights and remedies of the original
creditor. See id. (citation omitted). An example of contractual subrogation is when an insurer
expressly provides for the right of subrogation in its insurance policy. See Peninsula II , 208 So.
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3d at 1240. Contractual subrogation exists in this case, as USAA explicitly reserved such a right
in its insurance policy issued to Wintersteen. In this context, subrogation is not a separate cause
of action; instead, contractual subrogation simply substitutes one party (the subrogee/USAA) for
another party (the subrogor/Wintersteen) with respect to an existing lawful claim that the
subrogor (Wintersteen) could have pursued. See id.
Equitable subrogation, on the other hand, arises by operation of law after one party pays
the debt of another. See id.; Columbia Cas., 2008 WL 11338289, at *4. Specifically, it arises
from “the legal consequences of the acts and relationships of the parties.” Dade County School
Board v. Radio Station WQBA, 731 So. 2d 638, 646 (Fla. 1999). Like contractual subrogation,
“the party discharging the debt stands in the shoes of the person whose claims have been
discharged and thus succeeds to the rights and priorities of the original creditor.” Id. However, in
order to establish a right to equitable subrogation, the following must be shown: “(1) the
subrogee [USAA] made the payment [to Lawrence] to protect [its] own interest, (2) the subrogee
[USAA] did not act as a volunteer, (3) the subrogee [USAA] was not primarily liable for the debt
[to Lawrence], (4) the subrogee [USAA] paid off the entire debt [owed to Lawrence], and (5)
subrogation would not work any injustice to the rights of a third party.” Id.
ACE argues that equitable subrogation is not appropriate in this case, because USAA did
not pay the entire amount owed to Lawrence, given that $400,000 of Lawrence’s damages remain
unpaid. The Court agrees that, because ACE remains potentially liable for the remaining
$400,000 of Lawrence’s damages, equitable contribution is not the appropriate vehicle for USAA
to use. Accordingly, the Court grants ACE’s motion to dismiss to the extent that it argues that
equitable subrogation is not available in this case. However, USAA’s promissory estoppel claim
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remains due to contractual subrogation.
Next, ACE argues that USAA cannot stand in Wintersteen’s shoes to pursue a promissory
estoppel claim, because Wintersteen assigned all of his rights to bring suit against ACE to
Lawrence via the Settlement Agreement. USAA responds that the Settling Parties specifically
stated in the Settlement Agreement that the Settlement Agreement “is not intended to, and should
not be construed as, a release or limitation in any manner of the rights of . . . [USAA] to pursue
claims against [ACE].” (Doc. No. 71-3, p. 5, ¶ 7). The Settlement Agreement further provides
that USAA expressly reserved all of its rights to recovery against ACE. (Doc. No. 71-3, p. 5, ¶
7). The Court agrees with USAA that the Settlement Agreement did not extinguish USAA’s
contractual subrogation rights. Therefore, the Court denies ACE’s motion to dismiss USAA’s
promissory estoppel claim brought pursuant to contractual subrogation.
V. Conclusion
Accordingly, it is ORDERED AND ADJUDGED that:
(1)

ACE’s Motion to Dismiss Lawrence’s Second Amended Complaint (Doc. No. 74)
is GRANTED IN PART AND DENIED IN PART: The motion is granted to
extent that ACE’s policy does not provide coverage for the accident under
Endorsement Number 283; otherwise, the motion is denied.

(2)

ACE’s Motion to Dismiss USAA’s Second Amended Complaint in Intervention
(Doc. No. 73) is GRANTED IN PART AND DENIED IN PART: The motion is
granted to extent that: (a) ACE’s policy does not provide coverage for the accident
under Endorsement Number 283; and (b) USAA’s promissory estoppel claim

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cannot be brought pursuant to equitable subrogation. Otherwise, the motion is
denied.
DONE AND ORDERED at Tampa, Florida, this 28th day of November, 2018.

Copies to:
Counsel of Record

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