TUDOR INSURANCE COMPANY v. AMERICAN CASUALTY COMPANY OF READING PENNSYLVANIA

Filing 52

ORDER granting 44 Motion for Summary Judgment by American Casualty and denying 45 Motion for Summary Judgment by Tudor. Signed by CHIEF JUDGE M CASEY RODGERS on 3/31/2017. (aow)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION
TUDOR INSURANCE COMPANY,
Plaintiff,
v.

CASE NO. 3:15cv166-MCR/CJK

AMERICAN CASUALTY COMPANY
OF READING PENNSYLVANIA
Defendant.
__________________________________/
ORDER
Plaintiff Tudor Insurance Company (“Tudor”) brought suit against American
Casualty Company of Reading, Pennsylvania (“American Casualty”), seeking
contribution for a claim that Tudor paid to settle a state court lawsuit on behalf of a
mutual insured, Strategic Management Partners, LLC (“SMP”). See 28 U.S.C.
§ 1332(a). 1 Pending are cross motions for summary judgment, disputing whether
American Casualty’s policy is primary insurance or excess coverage in this instance.
Having fully reviewed the matter, the Court finds that Tudor’s Motion for Summary

1

The Court has diversity jurisdiction. Tudor is a New Hampshire corporation with its
principal place of business in New Jersey and authorized to do business in Florida, and American
Casualty is a Pennsylvania corporation with its principal place of business in Chicago, Illinois.
The underlying dispute exceeds $75,000.

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Judgment is due to be denied, and American Casualty’s Motion for Summary
Judgment is due to be granted.
I.

Factual Background
The parties agree that there is no outstanding dispute of material fact.

Beginning September 3, 2011, and continuing through all relevant times, SMP
served as the property manager for the Royal Crest Apartments located in Pensacola,
Florida, under an agreement between Woods Hill Pensacola, LLC (“Woods Hill”)
and SMP. 2 On September 9, 2011, an individual named Deiante Elijah H.L. Graham
was shot and killed in the parking lot of the Royal Crest Apartments. At the time of
the injury, SMP was performing functions under the Management Agreement, which
lists SMP as the manager of the Royal Crest Apartments and Woods Hill as the
owner. The representative of Mr. Graham’s estate filed a wrongful death lawsuit
against SMP, as well as the alleged owners of the Royal Crest Apartments,3 for
premises liability and negligent security, alleging that his death was caused, in whole

2

The Management Agreement uses only the address of the property, as opposed to the
name, but the parties do not dispute that the property is the Royal Crest Apartments. Under the
Agreement, SMP was obligated to “diligently and in good faith” “manage, operate and maintain”
the property.
3

It was alleged in the state court suit that SMP operated and managed the Royal Crest
Apartments premises and that Parkstone Capital, LLC; Parkstone Capital II, LLC; Parkstone
Capital II, L.P.; and AHF Royal Crest, LLC, owned or leased the Royal Crest Apartments
premises. Parkstone Capital II, LLC, is the managing member of Woods Hill.
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or in part, by SMP. See Chamika Moultrie, as Personal Representative of the Estate
of Deiante Elijah H.L. Graham, Deceased v. Strategic Management Partners,
L.L.C., et al., Case No. 2013-CA-001620 (Fla. Cir. Ct.) (hereinafter “Moultrie
lawsuit”), Compl., ECF No. 1-3. Tudor settled the case on behalf of SMP for the
sum of $637,500, and paid the settlement in full.
It is also undisputed that at the time of the incident that gave rise to the
Moultrie lawsuit, SMP was insured by both Tudor and American Casualty, under
separate policies. Tudor issued a general commercial liability policy, number
BRP0000450 (“Tudor policy”), effective April 16, 2011 through April 16, 2012.4 It
named Progressive Management of America as the original named insured; Royal
Crest Apartments was added by endorsement as an additional location; and Woods
Hill and others were added by endorsement as additional named insureds. Although
SMP’s name does not appear in the policy, it is undisputed that the policy covered

4

Tudor appears to be a subset of an organization named Western World Validus Group or
Western World Insurance Group, which is listed on the policy. ECF No. 44-2, at 1–3. At least
once in Tudor’s Response in Opposition to American Casualty’s motion for summary judgment,
the Tudor policy is referred to as the “Western World Policy.” ECF No. 51, at 6. Nevertheless, it
is undisputed that Tudor is the insurer for purposes of this policy.
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SMP by virtue of its property management agreement with Woods Hill. 5 The Tudor
policy has a $1,000,000 per occurrence limit.
American Casualty issued policy number CNP 4018358222 (“American
Casualty policy”) directly to SMP, effective July 6, 2011 through July 6, 2012. The
American Casualty policy has a $2,000,000 per occurrence limit.

Its

Businessowners Common Policy conditions include an “other insurance” provision,
which provides the coverage is “excess” over any other “primary insurance” that is
available in certain instances, and also an endorsement stating that the coverage is
“excess” over valid collectible insurance when the liability arises out of “your
management of property for which you are acting as real estate manager.”
Tudor filed this federal declaratory judgment suit, seeking “reimbursement,
equitable or ratable contribution[,] and equitable subrogation” from American
Casualty. ECF No. 1, at 1. Both parties have moved for summary judgment,
asserting that the facts are undisputed and only questions of contract interpretation
are at issue. In brief, Tudor argues that it is entitled to pro-rata contribution from

5

The policy provides that a person or organization acting as a real estate manager is an
insured. Also, a separate endorsement entitled “Additional Insured-Designated Person or
Organization” states that additional insureds are those “required [to be insured] by written contract
or agreement with the insured.” ECF No. 44-2, at 42. The parties differ over the meaning and
applicability of these two provisions of Tudor’s policy and over how they impact the responsibility
of American Casualty under its policy.
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American Casualty on grounds that both policies provide primary coverage.
American Casualty maintains that its policy provides only excess coverage in this
situation, and, because the Moultrie settlement amount did not exceed the limits of
Tudor’s primary coverage policy, the excess coverage is not triggered in this case.
II.

Legal Standards
Summary judgment is appropriate if there is “no genuine dispute as to any

issue of material fact” and the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
In making these determinations, the Court considers the non-movant’s evidence as
true and draws all justifiable inferences in its favor. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 255 (1986). When considering cross motions for summary
judgment, the Court applies the same standards; each motion must be considered on
its own with the facts viewed in the light most favorable to the nonmoving party,
and to prevail, the moving parties must establish that there is no genuine dispute of
fact and that they are entitled to judgment as a matter of law. See, e.g., Am. Bankers
Ins. Grp. v. United States, 408 F.3d 1328, 1331 (11th Cir. 2005); United States v.
Oakley, 744 F.2d 1553, 1555–56 (11th Cir. 1984).

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A federal court sitting in diversity applies federal procedural law and state
substantive law. See Erie R. Co. v. Tompkins, 304 U.S. 64 (1938); Trailer Bridge,
Inc. v. Illinois Nat. Ins. Co., 657 F.3d 1135, 1141 (11th Cir. 2011). Thus, the Court
applies federal procedural law and Florida substantive law; therefore, Florida law
governs the choice of law rules that will apply. See Rando v. Gov’t. Employees Ins.
Co., 556 F.3d 1173, 1176 (11th Cir. 2009). “With regard to insurance contracts,
Florida follows the ‘lex loci contractus’ choice-of-law rule, which ‘provides that the
law of the jurisdiction where the contract was executed governs the rights and
liabilities of the parties in determining an issue of insurance coverage.’” Rando v.
Govt. Emps. Ins. Co., 556 F.3d 1173, 1176 (11th Cir. 2009) (quoting State Farm
Mut. Auto. Ins. Co v. Roach, 945 So.2d 1160, 1163 (Fla. 2006)). The parties agree
that, based on where each contract was executed, the Tudor policy is governed by
Florida law and the American Casualty policy is governed by Georgia law.
Under either state’s law, the interpretation of an insurance contract is a matter
of law. See Wash. Nat’l Ins. Corp. v. Ruderman, 117 So. 3d 943, 948 (Fla. 2013);
see also Claussen v. Aetna Cas. & Sur. Co., 380 S.E.2d 686, 687 (Ga. 1989); see
also Giddens v. Equitable Life Assurance Soc'y of the U.S., 445 F.3d 1286, 1297
(11th Cir. 2006) (stating this includes “the determination and resolution of

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ambiguities”). Where the language is plain and unambiguous, courts give effect to
the language of the policy as written. See Ruderman, 117 So. 3d at 948; Claussen,
380 S.E.2d at 687–88 (“Under Georgia rules of contract interpretation, words in a
contract generally bear their usual and common meaning.”). Also, the policy must
be construed as a whole, giving each provision its full meaning and effect. See AutoOwners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000); Boardman Petroleum,
Inc. v. Federated Mut. Ins. Co., 498 S.E.2d 492, 494 (Ga. 1998) see also Fla. Stat.
§ 627.419(1); O.C.G.A. § 13–2–2(4).
III.

Discussion
Tudor moves for summary judgment conceding that its insurance is primary

but arguing that the American Casualty policy was also primary insurance, and
consequently, American Casualty is liable for contribution in the amount of its prorata share of the Moultrie settlement. Anticipating American Casualty’s excess
coverage argument, Tudor argues that the excess clauses are either inapplicable or
not enforceable due to ambiguity. In response and in its own motion for summary
judgment, American Casualty maintains that its coverage is excess under either of
two separate excess clauses in its policy. American Casualty further maintains that
Tudor’s “tortured construction” of the American Casualty policy fails to read all

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provisions as a whole. ECF No. 49, at 12. For the following reasons, the Court
agrees with American Casualty that a plain reading of the policy language requires
a conclusion that its coverage is excess in this situation.
“Excess or secondary coverage is coverage whereby, under the terms of the
policy, liability attaches only after a predetermined amount of primary coverage has
been exhausted.” Coker v. Am. Guar. & Liab. Ins. Co., 825 F.3d 1287, 1294 (11th
Cir. 2016) (quoting U.S. Fire Ins. Co. v. Capital Ford Truck Sales, Inc., 257 Ga. 77,
355 S.E.2d 428, 431 (1987)). When the excess provision applies, “excess” insurance
is not available until the limits of the primary policy have been exhausted. See
Coker, 825 F.3d at 1294. Even if both policies have unambiguous “other insurance”
clauses, if one excess clause plainly applies, the Court will give it effect and relieve
the excess insurer “from any duty to indemnify [the insured] for a covered loss until
all primary insurance coverage is exhausted.” 6 Keenan Hopkins Schmidt and Stowell
Contractors, Inc. v. Cont’l. Cas. Co., 653 F. Supp. 2d 1255, 1265 (M.D. Fla. 2009);
see also Phoenix Ins. Co. v. Nationwide Prop. and Cas. Ins. Co., 1:12-CV-00660JOF, 2013 WL 11975142, at *3 (N.D. Ga. Apr. 22, 2013) (noting, “the mere fact

6

In this case, although each policy contains an “other insurance” clause with an excess
insurance provision, there is no argument that the “other insurance” clauses are mutually
repugnant, and Tudor has not argued that its excess clause applies.
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that two policies contain “excess” clauses – even if the clauses are identical – does
not necessarily mean that the clauses are irreconcilable” (quoting American
Casualty, 185 F. App’x 921, 925 (11th Cir. 2006)).
The analysis in this case begins and ends with the plain language of the
policies. The Tudor policy, in relevant part, defines the “insured” as including
persons named in the declarations and those who are covered by reason of their role
or position with respect to the named insureds. Also, “insured” includes those
“acting as your real estate manager.” ECF No. 44-2, at 32–33 (Section II – Who Is
An Insured).

Several special endorsements add additional covered locations,

additional “Named Insureds,” and “Additional Insureds.” Among other things, these
endorsements define the Royal Crest Apartments as an additional covered location,
ECF No. 44-2, at 59; define Woods Hill as a “Named Insured,” ECF No. 44-2, at
68; and define as “Additional Insureds” all persons or organizations required to be
insured “by written contract or agreement with the insured,” ECF No. 44-2, at 42
(Additional Insured–Designated Person or Organization endorsement). The
Additional Insured endorsement, which covers those “required by written contract
or agreement with the insured,” further explains:
Section II – Who Is An Insured is amended to include as an additional
insured the person(s) or organization(s) shown in the Schedule, but only
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with respect to liability for “bodily injury” . . . caused, in whole or in
part, by your acts or omissions or the acts or omissions of those acting
on your behalf:
A.
B.

In the performance of your ongoing operations; or
In connection with your premises owned by or
rented to you.

ECF No. 44-2, at 42.7 The Tudor policy also includes an “other insurance” clause,
providing, in pertinent part, that when “other primary insurance” is available to the
insured, Tudor will contribute only a pro-rata share, as determined by the ratio of its
applicable limit to the total liability and all insurers’ limits.
The Businessowners Common Policy Conditions of the American Casualty
policy, contain an “other insurance” clause, which provides that the coverage is
“excess” coverage over “any other primary insurance available to you covering
liability for damages arising out of the premises for which you have been added as
an additional insured by attachment of an endorsement.” ECF No. 44-3, at 81
(Section H. Other Insurance). The “Businessowners Liability Coverage Form”

7

Multiple times, Tudor purports to quote this provision, substituting party names. Tudor
quotes the endorsement, without citation, as requiring that the acts occur “in the performance of
[Woods Hill’s] ongoing operations for [SMP] at the location(s) designated above.” ECF No. 48,
at 8. Tudor quotes a similar, abbreviated version in a footnote, with a citation to this Additional
Insured Endorsement. However, as reflected above, this clause of the endorsement ends at the
word “operations.” Tudor does not explain the addition of the remainder of the language, nor can
the Court find similar language elsewhere in the Tudor policy. Additionally, the Court finds that
Tudor’s insertion of names is confusing and materially inaccurate.
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contains the insuring agreement for “bodily injury” claims under the policy, which
were the subject of the Moultrie lawsuit. Additionally, a second excess provision is
found in an endorsement attached to the policy, titled “Limitation of Coverage—
Real Estate Services with Property Management,” ECF No. 44-3, at 113, which
provides that the coverage is excess when applied to liability arising out of property
management. Specifically, this endorsement “modifies insurance provided under
the following: Businessowners Liability Coverage Form,” and states in relevant
part:
B.

With respect to your liability arising out of your
management of property for which you are acting as real
estate manager this insurance is excess over any other
valid and collectible insurance available to you.

ECF No. 44-3, at 113.
There is no dispute that SMP is covered under the Tudor policy as an insured
by virtue of its Management Agreement with respect to the Royal Crest Apartments,
where the incident occurred. There is also no dispute that the Moultrie settlement
did not exceed the limits of Tudor’s insurance. Tudor argues that its “other
insurance” clause limits Tudor’s liability to payment of its own pro-rata share
because American Casualty’s insurance is also primary insurance.

CASE NO. 3:15cv166-MCR/CJK

Therefore,

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Tudor’s claim rises or falls on whether either of American Casualty’s excess clauses
applies.
The Court rejects out of hand Tudor’s initial argument that the American
Casualty policy’s excess clause is unenforceable as a matter of law as a “super
excess” clause. 8 The potential pitfalls of dueling excess clauses are not of concern
in this case because there is no argument that Tudor’s policy provides only excess
coverage, and the American Casualty excess clauses do not contain any language
indicating that either clause could operate as a super excess clause, if the situation
allowed it. Thus, the argument lacks merit.
Tudor argues that the American Casualty “other insurance” excess clause of
Section H does not apply because it requires SMP to have been added by name
through an endorsement to the Tudor policy, and according to Tudor, SMP’s name

8

Tudor cites Florida law rejecting “super excess” clauses. See Am. Cas. Co. of Reading
Pa. v. Health Care Indem., Inc., 613 F. Supp. 2d 1310, 1319 (M.D. Fla. 2009). Although under
Florida law, where one policy purports to have “a higher degree of excess-ness” over all other
excess coverage, i.e., the so-called “super excess” clause, Florida law rejects the provision, see
Certain Underwriters at Lloyds, London Subscribing to Policy No. SA 10092-11581 v. Waveblast
Watersports, Inc., 80 F. Supp. 3d 1311, 1321 (S.D. Fla. 2015), no such provision is at issue in this
case. Moreover, the American Casualty policy is governed by Georgia law. Also, when there are
two mutually repugnant “other insurance” excess clauses, they will both be cancelled out, and each
insurer will be required to pay its pro-rata share. See Allstate Ins. Co. v. Executive Car and Truck
Leasing, Inc., 494 So. 2d 487, 489 (Fla. 1986). But again, this circumstance is not at issue here.
Tudor does not claim that its coverage is excess in this instance; instead, its policy provides for
pro-rata payment whenever there is other available primary insurance.
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appears nowhere in the Tudor policy. Tudor contends that only Woods Hill is named
by endorsement and that SMP cannot be considered an insured solely by virtue of
the Management Agreement. Tudor goes so far as to say that the Management
Agreement “does not contain any paragraph, clause or section requiring Woods Hill
Pensacola, LLC to name [SMP] as an additional insured in its commercial general
liability policy or any other policy for that matter.” ECF No. 45, at 24. This
statement is demonstrably incorrect. First, the Management Agreement for the
Royal Crest Apartments between Woods Hill and SMP includes a provision stating
that the “Owner agrees to have Manager named as an additional insured on any
liability insurance policies maintained by Owner with respect to the Property.” ECF
No. 21-4, at 3 (Article II 2.01(g)). The Management Agreement expressly defines
Woods Hill as the “Owner” and SMP as the “Manager” of the property, ECF No.
21-4, at 1; thus, Woods Hill was contractually obligated to include SMP on its
liability policies.
Additionally, the Court finds that Tudor’s arguments ignore the plain
language of the Additional Insured endorsement to its policy, which expressly adds
as an “additional insured” all persons or organizations required to be insured “by
written contract or agreement with the insured.” ECF No. 44-2, at 42. Reading the

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Tudor policy as a whole together with the Management Agreement, the insured—
Woods Hill—was contractually obligated to add SMP to the policy, and the plain
language of the Tudor policy reflects that, by a special endorsement including those
required to be added by a written contract with the insured, SMP was effectively
added as an additional insured. The liability here for bodily injury to Mr. Graham,
allegedly caused by SMP acting on behalf of Woods Hill in the performance of
Woods Hill’s ongoing operations (as defined in the Management Agreement) and in
connection with Woods Hill’s premises, Royal Crest Apartments, satisfies the
liability requirements of the Additional Insured Endorsement under the Tudor
policy.
Tudor also argues that it is unreasonable to construe the Additional Insureds
endorsement as applying to SMP because SMP was already an insured under the
Tudor policy’s general definition of “Who is an Insured,” and thus the endorsement
had no effect and did not trigger American Casualty’s excess clause. The Court
disagrees. The fact that SMP may have been already considered an insured under
the Tudor policy does nothing to defeat the endorsement adding SMP for purposes
of American Casualty’s excess clause. Even if the provisions in the Tudor policy
could be considered inconsistent, when a policy attaches an endorsement that is

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inconsistent with the general policy, the endorsement generally controls. See Steuart
Petroleum Co. v. Certain Underwriters at Lloyd's London, 696 So. 2d 376, 379 (Fla.
1st DCA 1997); see also B.L. Ivey Const. Co. v. Pilot Fire & Cas. Co., 295 F. Supp.
840, 848 (N.D. Ga. 1968).
Tudor argues alternatively that the excess clause of American Casualty’s Real
Estate Services with Property Management endorsement does not apply in this
instance and, moreover, that it creates an ambiguity rendering both excess clauses
unenforceable. The Real Estate Services with Property Management endorsement
provides that the coverage is excess “[w]ith respect to your liability arising out of
your management of property for which you are acting as real estate manager.” ECF
No. 44-3, at 113 (Section B). The endorsement also excludes “real estate services”
from the Business Liability Coverage and includes a definition of “real estate
services,” which references the special skills, training, or knowledge of a real estate
agent or broker.9 Id. (Sections C and D). Tudor asserts that when reading the

9

C.

The following is added to Paragraph J. of Section B. 1. Exclusions Applicable to
Business Liability Coverage of the Businessowners Liability Coverage Form:
13. “Real estate services.”

D.

The following definitions are added to Section F. Liability and Medical
Expenses Definitions:

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paragraphs of this endorsement in pari materia, the excess clause of Section B
applies, if at all, only to claims where SMP provided professional services, not when
acting as a property manager on the allegations of the Moultrie lawsuit. Tudor
further maintains that the endorsement creates an irreconcilable ambiguity because
the index of forms lists the endorsement under the “Commercial Property” heading
whereas the Business Liability Coverage Form is listed under the “Commercial
General Liability” heading. American Casualty responds that the endorsement
plainly modifies the Business Liability Coverage Form, does not apply only to
professional real estate services, and creates no ambiguity.
The Court finds it unnecessary to determine whether the Real Estate Services
with Property Management endorsement applies only to “real estate services” and
not to SMP’s activities because, regardless of whether it applies to this case, the
determination has no effect on the Court’s analysis that the coverage is excess under
the “other insurance” provision of section H. Tudor’s attempt to isolate the forms
index to create an ambiguity lacks merit because insurance policies must be

“Real Estate Services” means services that require special skill, special
knowledge, special training, or special judgment, of a real estate agent, real
estate broker, real estate personal assistant, or real estate consultant.

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construed as a whole, giving each provision its full meaning and effect. See AutoOwners Ins. Co., 756 So. 2d at 34; Boardman Petroleum, 498 S.E. 2d at 494. Tudor
has not explained why the endorsement and the “other insurance” clause of Section
H must be considered mutually exclusive, as opposed to separate and independently
operable means of limiting the coverage to excess, and nothing in the contract
requires such a construction or makes either provision ambiguous. Construing the
policy as a whole, the Court finds that the “other insurance” provision of section H
of American Casualty’s Businessowners Common Policy Conditions, limiting
American Casualty’s obligation to excess coverage, is fully applicable to this case
and that no internal conflict is present rendering it ambiguous or requiring its
cancellation.
Accordingly:
1.

Tudor Insurance Company’s Motion for Summary Judgment, ECF No.
45, is DENIED.

2.

American Casualty Company of Reading Pennsylvania’s Motion for
Summary Judgment, ECF No. 44, is GRANTED.

3.

The Clerk is instructed to enter summary final judgment in favor of
Defendant American Casualty Company of Reading Pennsylvania and

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against Plaintiff Tudor Insurance Company, and close the case.
DONE AND ORDERED on this 31st day of March, 2017.

M. Casey Rodgers
M. CASEY RODGERS
CHIEF UNITED STATES DISTRICT JUDGE

CASE NO. 3:15cv166-MCR/CJK