Evanston Insurance Company v. Haven South Beach LLC et al
Filing
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ORDER granting 44 Motion for Summary Judgment. Closing Case. Motions Terminated: 44 MOTION for Summary Judgment and Incorporated Memorandum of Law, filed by Evanston Insurance Company. Signed by Judge Darrin P. Gayles on 12 /28/2015. (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. 15-20573-CIV-GAYLES/TURNOFF
EVANSTON INSURANCE COMPANY,
Petitioner,
v.
HAVEN SOUTH BEACH, LLC, et al.,
Respondents.
/
ORDER
THIS CAUSE comes before the Court upon Petitioner Evanston Insurance Company’s
Motion for Final Summary Judgment and Incorporated Memorandum of Law (the “Motion”) [ECF
No. 44]. The Court has considered the parties’ written submissions, the record, and the applicable
law. For the reasons set forth below, the Motion is GRANTED.
BACKGROUND
I.
The Facts as Alleged in the Underlying Complaint
On January 30, 2014, Barbara Kaufman (“Mrs. Kaufman”) and her husband, Donald
Kaufman, (“Mr. Kaufman”) (collectively the “Kaufmans”) attended the Ninth Annual Taste of the
Garden (the “Event”) at the Miami Beach Botanical Garden. Haven South Beach, LLC (“Haven”)
was a food and beverage vendor at the Event. Haven served Mrs. Kaufman an alcoholic beverage
containing liquid nitrogen. 1 Haven used the liquid nitrogen to create a smoky effect. Upon drinking
the liquid nitrogen infused beverage, Mrs. Kaufman suffered injuries. The Kaufmans filed an action
against Kryogenifex, Inc.; Miami Beach Garden Conservancy, Inc.; and Haven (collectively the
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Respondent Kryogenifex, Inc. supplied Haven with the liquid nitrogen.
“Respondents”), asserting claims for strict liability and negligence and a derivative claim by Mr.
Kaufman (the “Underlying Complaint).
II.
The Policy
At the time of the Mrs. Kaufman’s injuries, Haven had an insurance policy (the “Policy”)
with Evanston Insurance Company (“Evanston”). The Policy contains both a Commercial General
Liability Part (the “CGL Part”) and a Liquor Liability Coverage Part (the “LLC Part”). The relevant
provisions provide:
TOTAL POLLUTION EXCLUSION ENDORSEMENT
This insurance does not apply to:
f.
Pollution
(1)
“Bodily injury” or “property damage” which would not have occurred in whole or
part but for the actual, alleged or threatened discharge, dispersal, seepage, migration,
release or escape of “pollutants” at any time.
[ECF No. 44-2 at pg. 45].
CGL Section V – Definitions
15.
“Pollutants” mean any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste
includes materials to be recycled, reconditioned or reclaimed.
[ECF No. 44-2 at pg. 20].
SPECIFIED /DESIGNATED PREMISES/PROJECT LIMITATION
This insurance applies only to “bodily injury”, “property damage”, “personal and advertising
injury” and medical expenses arising out of:
1.
2.
The ownership, maintenance or use of the premises shown in the Schedule (or
Declarations); or
The project shown in the Schedule (or Declarations).
[ECF No. 44-2 at pg. 34].
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LIQUOR LIABILITY COVERAGE FORM
2.
Exclusions
This insurance does not apply to:
...
e.
Your Product
“Injury” arising out of “your product.” This exclusion does not apply to “injury” for
which the insured or the insured’s indemnitees may be held liable by reason of:
(1)
(2)
(3)
Causing or contributing to the intoxication of any person;
The furnishing of alcoholic beverages to a person under the legal drinking age
or under the influence of alcohol; or
Any statute, ordinance or regulation relating to the sale, gift, distribution or
use of alcoholic beverages.
[ECF No. 44-2 at pg. 23].
Section V – DEFINITIONS
10.
“Your product”
a.
Means:
(1)
Any goods or products, other than real property, manufactured, sold, handled,
distributed or disposed of by:
(a)
(b)
(c)
You;
Others trading under your name; or
A person or organization whose business or assets you have acquired .
..
[ECF No. 44-2 at pg. 27].
III.
The Current Action
On February 12, 2015, Evanston filed this action against the Respondents, seeking a
declaration that it had no duty to defend or indemnify Haven in the Underlying Action. Evanston
now moves for summary judgment, arguing that the (1) Pollution Exclusion; (2) Designated
Premises Endorsement; and (3) “Your Product” Exclusion each bar coverage for the Kaufmans’
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claims. The Kaufmans filed a response to the Motion. Evanston and the Kaufmans, at the Court’s
direction, also submitted supplemental briefs regarding the Pollution Exclusion.
LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 56(a) “[t]he court shall grant summary judgment
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). “[T]he plain language of Rule 56[a] mandates
the entry of summary judgment, after adequate time for discovery and upon motion, 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, 106 S.Ct. 2548, 91 L.Ed.2d 265 (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.
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.” Clark v. Coats &
Clarks, Inc., 929 F.3d 604, 608 (11th Cir. 1991). Rule 56(e) “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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
The inferences drawn from the underlying facts must be viewed in the light most favorable to the
nonmoving party. Scott v. Harris, 550 U.S. 372, 378, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007).
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ANALYSIS
I. Insurance Policy Construction
A. General Principles
The parties agree that Florida law applies to the Policy and this dispute. Under Florida law,
“[i]nsurance contracts are construed according to their plain meaning, with any ambiguities
construed against the insurer and in favor of coverage.” U.S. Fire Ins. Co. v. J.S.U.B., Inc., 979
So.2d 871, 877 (Fla. 2007). If there is a dispute over coverage and exclusions, the Court employs a
burden-shifting framework. See E.S.Y., Inc. v. Scottsdale Ins. Co., No. 15-21349-CIV, 2015 WL
6164666 (S.D. Fla. October 14, 2015). “A person seeking to recover on an insurance policy has the
burden of proving a loss from causes within the terms of the policy[,] and if such proof of loss is
made within the contract of insurance, the burden is on the insurer to establish that the loss arose
from a cause that is excepted from the policy . . . .” Id. (quoting U.S. Liab. Ins. Co. v. Bove, 347
So.2d 678, 680 (Fla. 3d DCA 1977). If the insurer is able to establish that an exclusion applies, the
burden shifts to the insured to prove an exception to the exclusion. Id.
B. Duty to Defend and Indemnify
To determine whether Evanston had a duty to defend Haven, the Court looks only to the
allegations in the Underlying Complaint and the terms of the Policy. See Jones v. Florida Ins. Guar.
Ass'n, Inc., 908 So.2d 435, 442–43 (Fla. 2005). If the allegations in the Underlying Complaint do
not establish coverage, there is no duty to defend. James River Ins. Co. v. Bodywell Nutrition, LLC,
842 F. Supp. 2d 1351, 1354 (S.D. Fla. 2012) (citing Posigian v. American Reliance Ins. Co. of New
Jersey, 549 So. 2d 751, 753 (Fla. 3d DCA 1989)). Unsupported and conclusory “buzz words” are
insufficient to trigger coverage. State Farm Fire and Cas. Co. v. Steinberg, 393 F.3d 1226, 1230
(11th Cir. 2004). In addition, inferences are insufficient to trigger coverage. Fun Spree Vacations,
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Inc. v. Orion Ins. Co., 659 So. 2d 419, 421-22 (Fla. 3d DCA 1995) (“[T]he allegations in the
complaint control in determining the insurer’s duty to defend . . . inferences are not sufficient.”)
(citations omitted). Where there is no duty to defend, there is no duty to indemnify. See E.S.Y., 2015
WL 6164666 at * 6 (citing Farrer v. U.S. Fid. & Guar. Co., 809 So.2d 85, 88 (Fla. 4th DCA 2002)).
II. Evanston Has No Duty to Defend
A.
Pollution Exclusion
Evanston argues that the Policy’s Pollution Exclusion bars coverage for the Kaufmans’
claims because Haven discharged, dispensed and/or released liquid nitrogen, a “pollutant,” into Mrs.
Kaufman’s beverage. The Kaufmans argue that the Pollution Exclusion is ambiguous. The
Kaufmans argue, in the alternative, that even if the exclusion is unambiguous, it does not bar their
claims because liquid nitrogen is not a “pollutant” and Haven’s intentional placement of the liquid
nitrogen in Mrs. Kaufman’s beverage does not constitute discharging, dispensing, and/or releasing a
pollutant.
If the language of a policy is not ambiguous, the Court applies the plain language of the
policy to the allegations in the Underlying Complaint. See Chestnut Assoc., Inc. v. Assurance Co. of
America, 17 F.Supp.3d 1203, 1209 (M.D. Fla. 2014). Although courts generally resolve ambiguities
in favor of the insured, “[o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning
remains after resort to the ordinary rules of construction is the rule apposite. It does not allow courts
to rewrite contracts, add meaning that is not present, or otherwise reach results contrary to the intent
of the parties.” Excelsion Ins Co. v. Pomona Park Bar & Package Store, 369 So. 2d 938, 942 (Fla.
1979. “[W]here the language in a policy is plain and unambiguous, there is no special construction
or interpretation required, and the plain language of the policy will be given the meaning it clearly
expresses.” Fla. Farm Bureau Ins. v. Birge, 659 So.2d 310, 312 (Fla. 2d DCA 1994). See also
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Nova Cas. Co. v. Waserstein, 424 F.Supp.2d 1325, 1334 (S.D. Fla. 2006) (noting that a principle of
Florida insurance law is that “plain meaning governs first and foremost”). Indeed, Florida courts
have routinely held that pollution exclusions, nearly identical to the Pollution Exclusion in the
Policy, are unambiguous and do not need special construction or interpretation. See Deni Associates
of Florida, Inc. v. State Farm Fire & Cas. Ins. Co., 711 So.2d 1135, 1138 (Fla. 1998) (holding that
pollution exclusion language was unambiguous and not limited to environmental pollutants);
Philadelphia Ind. Ins. v. Yachtsman’s Inn Condo Assoc., 595 F.Supp.2d 1319, 1324 (S.D. Fla. 2009).
The Court finds that the Policy’s Pollution Exclusion, like the exclusion in Deni, is unambiguous.
Accordingly, the Court must apply the plain meaning of the Pollution Exclusion to the allegations in
the Underlying Complaint and determine whether Haven’s act of pouring liquid nitrogen into Mrs.
Kaufman’s beverage constitutes the discharge, dispersal, or release of an “irritant or contaminant.”
The Policy defines “pollutant” as any solid, liquid, gaseous or thermal irritant or contaminant,
including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. The Policy does not define
“irritant” or “contaminant.” When faced with the same language in Deni, the Florida Supreme Court
relied on Webster’s Dictionary, which defined irritant as “an agent by which irritation is produced (a
chemical).” Deni, 711 So. 2d at 1139 (quoting WEBSTER’S THIRD NEW INTERNATIONAL
DICTIONARY UNABRIDGED 1197 (1981)). The court went on to hold that “[a]n irritant is a
substance that produces a particular effect, not one that generally or probably causes such effects.”
Id. (finding ammonia was an irritant based on the facts of the case). A substance does not always
have to cause irritation to be an irritant. Rather, the relevant inquiry should be whether the
substance, as alleged in the underlying complaint, caused irritation. See Nova Casualty Co. v.
Waserstein, 424 F.Supp.2d 1325, 1334 (S.D. Fla. 2006) (finding bacteria to be a contaminant).
Using this guidance, courts applying Florida law have found many different substances to be irritants
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or contaminants. See e.g. Deni, 711 So. 2d at 1139 (ammonia fumes an irritant); Philadelphia
Indemnity Ins. Co., 595 F.Supp.2d at 1324 (raw sewage, feces, and battery acid were irritants);
Chestnut Assoc., Inc., 17 F.Supp. 3d at 1209 (bodily fluid a pollutant under facts of case).
The Court finds that liquid nitrogen is an “irritant.” The Underlying Complaint alleges that
Mrs. Kaufman’s injuries are the direct result of her ingesting liquid nitrogen and that liquid nitrogen
is “unreasonably dangerous by virtue of the product itself” and which has “dangerous propensities.”
See Underlying Complaint at ¶¶ 28a, 33. Liquid nitrogen is considered hazardous by OSHA’s hazard
communication standard. See ECF No. 59-2. Based on its dangerous and hazardous properties and
its particular effect on Mrs. Kaufman, liquid nitrogen is, at the very least, an irritant. Accordingly,
liquid nitrogen falls within the Policy’s definition of a pollutant.
The Kaufmans argue that even if liquid nitrogen is a pollutant, Haven did not discharge,
disperse, or release the liquid nitrogen. Like irritant, the Policy does not define discharge, dispersal,
or release. This does not, however, render the Policy ambiguous. See Deni, 711 So.2d at 1139 (“The
mere failure to provide a definition for a term involving coverage does not necessarily render the
term ambiguous.”) (quoting Jefferson Ins. Co. v. Sea World, 586 So.2d 95, 97 (Fla. 5th DCA 1991)).
Rather, such “terms must be given their everyday meaning and should be read with regards to
ordinary people's skill and experience.” Migliano v. Universal Property & Cas. Ins. Co., 174 So.3d
479, 481 (Fla. 4th DCA 2015) (quoting Harrington v. Citizens Prop. Ins. Corp., 54 So.3d 999, 1003
(Fla. 4th DCA 2010). “Florida courts will often use legal and non-legal dictionaries to ascertain the
plain meaning of words that appear in insurance policies.” Id. (citation omitted).
Merriam-Webster Dictionary defines the intransitive verb “discharge” as “to pour forth fluid
or other contents.”
“discharge, v.,” Merriam-Webster.com, (Dec. 19, 2015), from
http://www.meriam-webster.com/dictionary/discharge. The allegations in the Underlying Complaint
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clearly support a finding that Haven poured forth the liquid nitrogen, a “pollutant”, into Mrs.
Kaufman’s beverage. Accordingly, the Pollution Exclusion applies and bars coverage for the
Kaufman’s claims.
B.
Other Provisions
Because the Court has found that Evanston has no duty to defend based on the Pollution
Exclusion, it will not fully address the other alleged bars to coverage. The Court notes, however,
that (1) the Designated Premises Endorsement and (2) the “Your Product” Exclusion do not bar
coverage for the Kaufman’s claims. The Designated Premises Endorsement is, at best, ambiguous.
See Evanston Ins. v. Gaddis, 2015 WL 7271951 (S.D. Fla. 2015) (finding identical designated
premises endorsement ambiguous); Am Empire Surplus Lines v. Chabad House of N. Dade, 771
F.Supp.2d 1336 (S.D. Fla. 2011) (attempt to modify a commercial general liability policy to a
premises liability policy must be clear and unequivocal). In addition, while the “Your Product”
Exclusion likely bars coverage under the LLC Part, it would not exclude coverage under the CGL
Part, and therefore would not be a complete bar to coverage.
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CONCLUSION
Based on the foregoing, it is
ORDERED AND ADJUDGED that Petitioner Evanston Insurance Company’s Motion for
Final Summary Judgment and Incorporated Memorandum of Law [ECF No. 44] is GRANTED.
Evanston has no duty to defend or indemnify Haven in the Underlying Action. It is further
ORDERED AND ADJUDGED that this case is CLOSED.
DONE AND ORDERED in Chambers at Miami, Florida, this 28th day of December, 2015.
________________________________
DARRIN P. GAYLES
UNITED STATES DISTRICT JUDGE
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