Atlantic Casualty Insurance Company v. Scaltec USA Corp. et al
Filing
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ORDER granting 46 Motion for Summary Judgment; denying as moot 76 Motion for Summary Judgment. Closing Case. Motions Terminated: 46 MOTION for Summary Judgment filed by Atlantic Casualty Insurance Company, 76 Second MOT ION for Summary Judgment filed by Atlantic Casualty Insurance Company. Signed by Judge Darrin P. Gayles on 4/30/2015. (hs01) NOTICE: If there are sealed documents in this case, they may be unsealed after 1 year or as directed by Court Order, unless they have been designated to be permanently sealed. See Local Rule 5.4 and Administrative Order 2014-69.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-24473-Civ-GAYLES/TURNOFF
ATLANTIC CASUALTY INSURANCE
COMPANY,
Plaintiff,
vs.
SCALTEC USA CORP., and
LEE ELLIS BLUE,
Defendants.
_______________________________________/
ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
This cause came before the Court on Plaintiff’s Motion for Summary Judgment [ECF 46]
and Plaintiff’s Second Motion for Summary Judgment [ECF 76]. The Court has reviewed the
motions, the record, and is otherwise fully advised. For the reasons stated below, the Court
GRANTS Plaintiff’s Motion for Summary Judgment and DENIES Plaintiff’s Second Motion for
Summary Judgment without prejudice.
BACKGROUND
Plaintiff Atlantic Casualty Insurance Company (“Atlantic”) has filed this action against
Defendants Scaltec USA Corporation (“Scaltec”) and Lee Ellis Blue (“Blue”) (collectively
“Defendants”) seeking a declaration of its rights and obligations under Policy of Commercial
General Liability Insurance (the “Policy”).
A.
The Accident
In 2009, Faith Deliverance Center, Inc. (“Faith Deliverance”) began construction on a
senior citizens center. Faith Deliverance employed Blue as its representative on the project and
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contracted with Scaltec to install a complete electrical system. On July 26, 2010, Blue was on the
construction site when an electrified bucket, attached to a crane, swung towards Blue and two
other construction workers. Blue reached out with a hammer, in an attempt to prevent the bucket
from hitting the other workers. Upon contact, the electricity in the bucket threw Blue in the air.
He eventually fell fifteen feet to the ground. The electrical charge melted and severed Blue’s
right hand and forearm from the rest of his arm and burned holes through is left hand and
forearm. Blue sued Scaltec and other entities involved in the project in the Eleventh Judicial
Circuit, in and for Miami-Dade County, Florida (the “Underlying Litigation”).
B.
The Policy
Prior to the accident, Atlantic issued the Policy to Scaltec. The policy includes an
exclusion for injuries to employees and contractors (the “Employee Exclusion”) which reads as
follows:
EXCLUSION OF INJURY TO EMPLOYEES
CONTRACTORS AND EMPLOYEES OF CONTRACTORS
Exclusion e. Employer’s Liability of Coverage A. Bodily Injury and
Property Damage Liability (Section I – Coverage) is replaced by the following:
This insurance does not apply to:
(i)
“bodily injury” to any “employee” of any insured arising out of or in the course
of:
(a) Employment by any insured; or
(b) Performing duties related to the conduct of any insured’s business;
(ii)
“bodily injury” to any “contractor” for which any insured may become liable in
any capacity; or
(iii)
“bodily injury” sustained by the spouse, child, parent, brother or sister of any
“employee” of any insured, or of a “contractor”, as a consequence of any injury to
any person as set forth in paragraphs (i) and (ii) of this endorsement.
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This exclusion applies to all claims and “suits” by any person or organization for
damages because of “bodily injury” to which this exclusion applies including
damages for care and loss of services.
This exclusion applies to any obligation of any insured to indemnify or contribute
with another because of damages arising out of “bodily injury” to which this
exclusion applies, including any obligation assumed by an insured under any
contract.
With respect to this endorsement only, the definition of “Employee” in the
DEFINTIONS (Section V) of CG001 is replaced by the following:
“Employee” shall include, but is not limited to, any person or persons hired,
loaned, leased, contracted, or volunteering for the purpose of providing services to
or on behalf of any insured, whether or not paid for such services and whether or
not an independent contractor.
As used in this endorsement, “contractor” shall include but is not limited to any
independent contractor or subcontractor of any insured, any general contractor,
any developer, any property owner, any independent contractor or subcontractor
of any general contractor, any independent contractor or subcontractor of any
developer, any independent contractor or subcontractor of any property owner,
and any and all persons working for and or providing services and or materials of
any kind for these persons or entities mentioned herein.
All other terms and conditions remain unchanged.
[ECF 1-2 at pg. 34]. In addition, the Policy declarations describe Scaltec as a “Remodeling
Contractor,” and the Policy Classifications are for “Remodeling – including only those classes
shown on required form AGL-REM, Code No. 91300” and for “Contractors-Subcntrct work w/
Contsr., Reconst., Repair or Erection of Buildings – NOC.” [ECF 1-2 at pgs. 2, 10-11].
C.
The Litigation
On December 11, 2013, Atlantic filed this action, seeking a declaration that the Policy
does not cover Blue’s claims and that Atlantic has no duty to defend Scaltec in the Underlying
Litigation. In its Motion for Summary Judgment, Atlantic contends that Blue was a “contractor”
as set forth in the Employee Exclusion and, therefore, the Policy does not cover any claims
relating to his injuries. In its Second Motion for Summary Judgment, Atlantic contends that the
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senior center was new construction, not a remodeling job, such that Scaltec’s work on the project
fell outside of the Policy’s Classification Limits.
LEGAL STANDARD
Summary judgment “shall be granted if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a judgment as a
matter of law.” Allen v. Tyson Foods, Inc., 121 F.3d 642 (11th Cir. 1997) (quoting Fed. R. Civ. P.
56(c)) (internal quotations omitted); Damon v. Fleming Supermarkets of Florida, Inc., 196 F.3d
1354, 1358 (11th Cir. 1999). Thus, the entry of summary judgment is appropriate “against a
party who fails to make a showing sufficient to establish the existence of an element essential to
that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986).
“The moving party bears the initial burden to show the district court, by reference to
materials on file, that there are no genuine issues of material fact that should be decided at trial.”
Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). “Only when that burden has
been met does the burden shift to the non-moving party to demonstrate that there is indeed a
material issue of fact that precludes summary judgment.” Id. Rule 56 “requires the nonmoving
party to go beyond the pleadings and by her own affidavits, or by the ‘depositions, answers to
interrogatories, and admissions on file,’ designate ‘specific facts showing that there is a genuine
issue for trial.” Celotex, 477 U.S. at 324. Thus, the nonmoving party “may not rest upon the mere
allegations or denials of his pleadings, but must set forth specific facts showing that there is a
genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (internal
quotation marks omitted).
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“A factual dispute is genuine if the evidence is such that a reasonable jury could return a
verdict for the non-moving party.” Damon, 196 F.3d at 1358. When deciding whether summary
judgment is appropriate, “the evidence, and all inferences drawn from the facts, must be viewed
in the light most favorable to the non-moving party.” Bush v. Houston County Commission, 414
F. App’x 264, 266 (11th Cir. 2011).
DISCUSSION
A.
Interpreting Insurance Policies
The interpretation of an insurance policy is a matter of law for the Court. See Sparta Ins.
Co. v. Colareta, 990 F.Supp.2d 1357, 1362-63 (S.D. Fla. 2014) (citing Great Am. Fid. Ins. Cop.
V. JWR Constr. Servs. , Inc., 882 F.Supp.2d 1340, 1350 (S.D. Fla. 2012)). Because the Court has
diversity jurisdiction over this matter and Atlantic and Scaltec executed the policy in Florida,
Florida law governs the Court’s decision. See Id. (holding that Florida law governs the
interpretation of an insurance policy issued in Florida).
The Court must construe the Policy in accordance with its plain language and interprets
the policy the way a “man on the street” would understand the language. Sparta, 990 F.Supp.2d
at 1363 (quoting Harrington v. Citizens Prop. Ins. Corp., 54 So.3d 999, 1001-02 (Fla. 4th DCA
2010). “[I]f the salient policy language is susceptible to two reasonable interpretations, one
providing coverage and the other excluding coverage, the policy is considered ambiguous.”
Cheetham v. Southern Oak Ins. Co., 114 So.3d 257, 261-62 (Fla. 3d DCA 2013). The Court
construes ambiguous provisions “liberally in favor of the insured and strictly against the insurer
who prepared the policy.” Sparta, 990 F.Supp.2d at 1363 (quoting Westmoreland v. Lumbermens
Mut. Cas. Co., 704 So.2d 176, 179 (Fla. 4th DCA 1997). However, “[i]n the absence of
ambiguity. . . it is the function of the court to give effect to and enforce the contract as it is
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written.” Id. (internal citations omitted).
B.
The Employee Exclusion
Atlantic contends that Blue’s injuries occurred while he was a “contractor,” as defined by
the Employee Exclusion, and that, therefore, the Policy does not cover his claims. The Court
agrees.
It is undisputed that Blue was “working for and or providing services” for Faith
Deliverance. It is also undisputed that Faith Deliverance owned the construction site. The
Employee Exclusion expressly defines “contractor” as including “any property owner . . and
any and all persons working for and or providing services and or materials of any kind for these
persons or entities mentioned herein.” [ECF 1-2 at 34](emphasis added). The plain language of
the Policy excludes coverage for bodily injury to any “contractor.” Because Blue, as an employee
of property owner Faith Deliverance, falls within the policy’s broad definition of contractor, the
policy does not cover his claims.
Courts in other jurisdictions have interpreted Atlantic’s Employee Exclusion. In Atlantic
Casualty Ins. Co. v. Alanis Dev. Corp., the Court held that Atlantic had no duty to defend the
insured against a building owner’s personal injury suit where the policy contained the Employee
Exclusion. No. 09 C 6657, 2001 WL 250320, at *3 (N.D. Ill, Jan. 25, 2011) (“In sum, the
exclusion makes it clear that the definition of “contractor” includes property owners regardless
of whether they were providing services or otherwise working on the property at the time of the
injury . . . Therefore, Atlantic Casualty does not have the duty to defend or the duty to indemnify
Alanis.”). In Atlantic Casualty Ins. Co. v. PV Roofing Corp., No. H-08-3583, 2010 WL 2035586,
at *3 (S.D. Tex., May 20, 2010), a subcontractor of the insured brought a man, Gonzalez, to a
construction site. Gonzalez was injured while moving a ladder and sued the insured. Focusing
on the provision of services, the Court held that Gonzalez, regardless of his employment status,
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was “providing services” on the construction site and, therefore, fell clearly within the “not
ambiguous” and “very broad” Employee Exclusion. Id. at *3
In Atlantic Casualty Ins. Co. v. Paszko Masonry, Inc., 718 F.3d 721 (7th Cir. 2013), the
Seventh Circuit, interpreting the Employee Exclusion, found that Atlantic had a duty to defend
its insured in an action brought by the employee of a potential subcontractor. The potential
subcontractor sent an employee to the construction site to demonstrate how he would caulk
windows.
The insured would only accept the potential subcontractor’s bid if the insured
approved the work.
After the demonstration, but before the insured accepted the potential
subcontractor’s bid, the employee was injured. Although the Court found the exclusion “poorly
drafted,” it ultimately focused on the language “providing services” on behalf of the insured.
Because the injured man was more akin to a passerby on a construction site, as opposed to
someone providing services to the insured, the Seventh Circuit found the “interpretation that
services are not provided until the contractor (with or without a signed contract, because a
provider of services is a “contractor” within the meaning of the exclusion regardless of whether
he has a contract) begins to do compensated work on the project.” Id. at 725.
These cases support this Court’s finding that Blue’s claims fall within the Employee
Exception.
Blue was providing services for Faith Deliverance – the property owner, and
therefore, a “Contractor” under the policy. Blue was an employee of Faith Deliverance and not
simply a bystander, customer, or potential service provider like the injured party in Paszko.
Accordingly, the Court finds that the Employee Exclusion applies.1
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It appears that Atlantic’s rationale for the Employee Exclusion is to limit coverage for
injuries that workman’s compensation covers – injuries to individuals who are working on a
construction site. The policy would still cover injuries to individuals on the premises for reasons
other than working on a construction project.
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The Court finds Defendants’ reliance on Turano v. Pellaton, No. FSTCV 106005723S,
2014 WL 660513, at *4 (Conn.Super. Jan. 22, 2014) misplaced. In Turano, a property owner
hired Quality Dry to waterproof his basement.
Quality Dry entered into a contract with
Atlantic’s insured – the subcontractor – to do the work. The property owner slipped at the
construction site. The Connecticut Court held that the property owner was not included in the
Employee Exclusion because he was not in an employment setting. “The language employed in
the heading is not broad enough to encompass the situation of a customer/property owner.” Id. at
*4. This case, however, is distinguishable from Turano, because Blue was in an employment
setting. Indeed, Blue was working on the construction site at issue in the Underlying Litigation.
As a result, he falls within the exclusion as a “person[] working for and providing services and/or
materials of any kind” to a “contractor.”
Accordingly, the Court finds that the Employee Exclusion applies to Blue’s claims.
There is no coverage under the policy and Atlantic has no duty to defend Scaltec in the
Underlying Litigation. Further, because the Court holds there is no coverage, it does not need to
address Atlantic’s argument that Blue’s claims fall outside of the remodeling classification of the
Policy.
CONCLUSION
Based on the foregoing, it is
ORDERED AND ADJUDGED that Plaintiff’s Motion for Summary Judgment [ECF 46]
is GRANTED as:
1. There is no coverage under the policy for Lee Ellis Blue’s claims against Scaltec.
2. Accordingly, Atlantic has no duty to defend Scaltec in Case No. 13-CA-034090
pending in the Eleventh Judicial Circuit, in and for Miami-Dade County, Florida. It is
further
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ORDERED AND ADJUDGED that Judgment is entered in favor of Plaintiff Atlantic
Casualty Insurance Company. It is further
ORDERED AND ADJUDGED that Plaintiff’s Second Motion for Summary Judgment
[ECF 76] is DENIED as moot. It is further
ORDERED AND ADJUDGED that this case is CLOSED and all other pending motions
are DENIED as MOOT.
DONE AND ORDERED in Chambers at Miami, Florida this 30th day of April, 2015.
___________________________
Honorable Darrin P. Gayles
United States District Judge
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