Covington Specialty Insurance Company v. Hillsborough, LLC et al

Filing 50

ORDER granting in part and denying in part 45 Motion for Summary Judgment and directing Clerk to enter judgment, terminate any pending motions/deadlines, and close the case in accord with the attached order. Signed by Judge William F. Jung on 2/20/2019. (CCB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION

COVINGTON SPECIALTY INSURANCE
COMPANY,
Plaintiff,
v.

CASE NO. 8:18-cv-1299-T-02SPF

HILLSBOROUGH, LLC d/b/a Riverside
Villa Apartments, DAVID DAVIDSON,
DEBORAH DENTON STEARNS, and
DANNY STEARNS,
Defendants.
/

ORDER
Plaintiff Covington Specialty Insurance Company seeks a declaration that it
owes no duty to defend or indemnify its insured in an underlying tort suit. Dkt. 9.
This matter comes before the Court upon Plaintiff Covington’s Motion for
Summary Judgment. Dkt. 45. The Defendants have responded. Dkts. 47, 48. The
motion is granted as to Covington’s duty to defend and indemnify. The motion is
denied as to Covington’s demand for a reimbursement of previously-expended
defense costs and fees.

In this case, the plaintiffs in the underlying tort suit (Mr. and Mrs. Stearns)
sued their apartment complex (Hillsborough LLC) and its owner (Mr. Davidson) for
personal injury. The cause of injury (mold/fungal infections) was not welldescribed in the underlying complaint, most likely for insurance coverage reasons.
Dkt. 1-2.
Covington, the apartment complex’s insurer, defended under a reservation of
rights. Dkt. 45-1. The Covington policy at issue (VBA296737 00) clearly excludes
coverage for mold/fungal liability.1 This exclusion is now fairly commonplace and
has been litigated elsewhere. Empire Indem. Ins. Co. v. Winsett, 325 F. App’x 849,

1

This insurance does not apply to . . . “[b]odily injury”,
“property damage” . . . which would not have occurred, in
whole or in part, but for the actual, alleged, or threatened
inhalation of, ingestion of, contact with, exposure to, existence
of, or presence of, any “fungi”, bacteria, or mold on or within
a building or structure, including its contents, regardless of
whether any other cause, event, material or product
contributed concurrently or in any sequence to such “bodily
injury”, “property damage”. . . .
[This insurance does not apply to] Any loss, cost or expense
arising out of the abating, testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying, neutralizing,
remediating or disposing of, or in any way responding to, or
assessing the effects of, “fungi”, bacteria or mold, by any
insured or by any other person or entity.
Dkt. 9 at 34, 38, 54.
-2-

850-52 (11th Cir. 2009); Rolyn Cos. v. R & J Sales of Tex., Inc., 671 F. Supp. 2d
1314, 1332-33 (S.D. Fla. 2009).
Discovery in the underlying suit revealed that the alleged damages sought
there are based on mold/fungal infections that caused damage to Mrs. Stearns’ lung
and kidneys. See Dkt. 45 at 2-3 (summarizing evidence); Dkt. 47 at 7 (noting that
mold injured Mrs. Stearns); Dkt. 48 at 4 (noting that Mrs. Stearns and her treating
physicians have testified that mold caused her lung infection and damages). The
site of the mold contamination that infected Mrs. Stearns is alleged to be the rental
apartment. Dkt. 1-2.
Although Florida law requires policy exclusions to be read narrowly, Gen.
Star Indem. Co. v. W. Fla. Village Inn, Inc., 874 So. 2d 26, 30 (Fla. 2d DCA 2004),
the facts here are uncontested. The Stearnses contend they were injured by
mold/fungi infection from their apartment. The policy simply does not cover
mold/fungi infection. Although Hillsborough LLC and Mr. Davidson contend that
Mrs. Stearns’ mold infection likely came from elsewhere and the Stearnses argue
that there is no evidence as to the “delivery device” of the mold, that is not relevant.
This case is about a mold infection alleged from a damp apartment: Covington
simply does not cover such mold/fungi liability in this policy. Covington has no
duty to indemnify the apartment complex and its owner for premises mold/fungi

-3-

claims. And the duty to defend has ended since the gravamen of the complaint is
now very clear: Mrs. Stearns claims Hillsborough LLC’s leaky apartment infected
her lungs with mold/fungus (a fact the Stearnses failed to mention in their vaguely
worded complaint and that clearly takes the Stearnses’ claims outside the coverage
of this policy). See, e.g., Underwriters at Lloyds London v. STD Enters., Inc., 395
F. Supp. 2d 1142, 1151 (M.D. Fla. 2005).
Covington’s prayer for reimbursement of its costs and fees incurred in the
underlying suit is denied. The matter is not sufficiently preserved under Florida
law. See Prime Ins. Syndicate, Inc. v. Soil Tech Distribs., Inc., No. 8:05-cv-280-T30, 2006 WL 1823562 at *9 (M.D. Fla. June 30, 2006); Underwriters, 395 F. Supp.
2d at 1150; Wendy’s of N.E. Fla. v. Vandergriff, 865 So. 2d 520, 522 (Fla. 1st DCA
2003); Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So. 2d 1034, 1038-39 (Fla.
1st DCA 2000). The duty to defend actually arose from the four corners of the
(rather vaguely drafted) complaint. Covington’s reservation of rights acknowledged
this, and did not expressly reserve future reimbursement of fees/costs, with the
option of the insureds to accept or reject this defense. Dkt. 45-1. Covington then
defended until the case discovery clearly showed the alleged cause of injury is
mold/fungal infection at the apartment. On these facts, Covington’s request to
recover costs and fees is due to be denied. See Wendy’s, supra.

-4-

Because no coverage or defense is due Hillsborough LLC or Mr. Davidson
under the Covington policy at issue, in light of this summary judgment, the Court
dismisses Hillsborough LLC’s counterclaim (Dkt. 33) which sought a declaration of
coverage. The Court finds that Covington has no duty to indemnify or defend
Hillsborough LLC or Mr. Davidson in the underlying suit brought by the Stearnses.
ACCORDINGLY, it is ORDERED AND ADJUDGED:
1)

Plaintiff Covington’s Motion for Summary Judgment (Dkt. 45) is
granted in part and denied in part.

2)

The Clerk is directed to enter a declaratory judgment in favor of
Plaintiff Covington providing that Covington has no duty to indemnify
or defend Hillsborough LLC or Mr. Davidson in the underlying suit
brought by the Stearnses.

3)

The Clerk is directed to terminate any pending motions/deadlines and
to close the case.

DONE AND ORDERED at Tampa, Florida, on February 20, 2019.

s/William F. Jung
WILLIAM F. JUNG
UNITED STATES DISTRICT JUDGE
COPIES FURNISHED TO:

Counsel of Record
-5-