Opinion
Case No.: 04-60619-CIV-COHN/SNOW.
April 13, 2005
ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF'S RENEWED MOTION FOR SUMMARY FINAL JUDGMENT
THIS CAUSE is before the Court upon Defendants' Motion for Summary Judgment [DE #88], Notice of Adoption of Motion for Summary Judgment [DE #98], Plaintiff's Response [DE #103], Defendants' Reply [DE #109], Plaintiff's Renewed Motion for Summary Final Judgment [DE #85], Defendants' Response [DE #101 and DE #107], and Plaintiff's Reply [DE #110 and DE #111]. Oral argument was held on April 8, 2005. The Court has carefully reviewed the submissions and is otherwise fully advised in the premises.
This is an action for declaratory relief under the Federal Declaratory Judgment Act, 28 U.S.C. § 2201, and Rule 57 of the Federal Rules of Civil Procedure. Plaintiff Essex Insurance Company ("Essex") seeks declaratory judgment against Defendants Mercedes and Miguel Zota (the "Zota Defendants"), Lighthouse Intracoastal, Inc. ("Lighthouse"), Jack Farji, and Broward Executive Builders, Inc. ("Broward Executive"), with respect to the insurance policy (policy number 3CM0753) (the "Policy") that it issued to Lighthouse.
I. BACKGROUND
A. The Underlying Action
In February 2004, the Zota Defendants sued Lighthouse, Broward Executive, and Farji in Broward County, Florida, for personal injuries suffered by Mercedes Zota, in state circuit court case number 04-03388-12 (the "Underlying Action"). In their Third Amended Complaint, the Zota Defendants alleged that Mercedes Zota was an architectural wall artist and was painting murals and wall art on property at the "30th Court" job site, located at 2373 N.E. 30th Court in Lighthouse Point, Florida. (DE #91 Ex. A). The property consisted of a home under construction. The Zota Defendants alleged that Mercedes Zota was seriously injured when she fell from the second floor to the ground below. Id. The Zota Defendants contend that the second floor did not have the appropriate edge protection, railings, chains, or guards. Id. Essex has provided a defense to Lighthouse and Farji in the Underlying Action.
B. The Present Action
Essex seeks a determination and a declaration of its respective rights and obligations with respect to the Defendants under the insurance policy (policy number 3CM0753) (the "Policy") that it issued to Lighthouse. Essex states that all parties having a potential interest in the outcome presently known to it are named in the above-styled action. At all material times Lighthouse was the owner of the real property at the "30th Court" job site. Farji was Vice President of Lighthouse and President of Broward Executive. The Zota Defendants, Lighthouse, and Farji have made a demand for coverage under the Policy. Essex seeks a declaration that it is not required to provide indemnity under the Policy to Lighthouse or Farji for the Zota claim. In addition, Essex seeks a declaration that it is not obligated to defend Lighthouse or Farji in the Underlying Action, and that Essex be released from any further obligation to defend or indemnify Lighthouse or any other potential additional insureds under the Policy for the Zota claim.
The Policy's effective dates were September 26, 2003 through March 26, 2004. Thus, the basis for the Underlying Action occurred during the policy period.
C. The Motions
In their Motion for Summary Judgment, Defendants contend that Essex failed to deliver the Policy to Lighthouse in compliance with Fla. Stat. § 626.922 and therefore are entitled to judgment as a matter of law. In addition, Defendants assert that they are entitled to judgment as a matter of law because Mercedes Zota was not an employee of Lighthouse under the terms of the Policy, because the Policy terms "contractor, builder or developer" are ambiguous, and because Lighthouse is not a contractor, builder, or developer.
In its Renewed Motion for Summary Final Judgment, Plaintiff maintains that the Policy excludes coverage, with limited exceptions, where the insured was acting as a contractor, builder or developer, or the underlying claim is made by an employee of the insured. Plaintiff argues that Lighthouse was acting as a contractor, builder or developer, and/or the underlying claim is made by an employee of the insured. Thus, Plaintiff contends that there is no coverage for the claim asserted in the Underlying Action pursuant to the terms of the Policy and therefore it is entitled to judgment as a matter of law.
II. ANALYSIS
Summary judgment "shall be rendered forthwith 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." Fed.R.Civ.P. 56(c). All evidence must be viewed in the light most favorable to the nonmoving party. See Crosby v. Monroe County, 394 F.3d 1328, 1332 (11th Cir. 2004). If the evidence could not lead a rational fact-finder to find for the nonmoving party, and where the nonmoving party fails to make a sufficient showing to demonstrate an element essential to that party's case on which that party bears the burden of proof at trial, then no genuine issue of material fact exists, and summary judgment should be granted. See McDowell v. Brown, 392 F.3d 1283, 1288-89 (11th Cir. 2004). For factual issues to be considered genuine, they must have a real basis in the record. Id. at 1289.
Essex is a surplus lines insurer in the State of Florida. (DE #84). An "eligible surplus lines insurer" is "an unauthorized insurer which has been made eligible by the office to issue insurance coverage under this Surplus Lines Law." Fla. Stat. § 626.914(2). Essex must use a surplus agent in Florida in order to issue policies in Florida. (DE #84). A "surplus lines agent" is "an individual licensed as provided in this part to handle the placement of insurance coverages with unauthorized insurers and to place such coverages with authorized insurers as to which the licensee is not licensed as an agent." Fla. Stat. § 626.914(1). In this case the surplus lines agent was MacDuff Underwriters, Inc. ("MacDuff") (DE #84).
Florida statute § 626.922(1) provides:
Upon placing a surplus lines coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consisting either of the policy as issued by the insurer or, if such policy is not then available, a certificate, cover note, or other confirmation of insurance. Such document shall be executed or countersigned by the surplus lines agent and shall show the description and location of the subject of the insurance; coverage, conditions, and term of the insurance; the premium and rate charged and taxes collected from the insured; and the name and address of the insured and insurer. If the direct risk is assumed by more than one insurer, the document shall state the name and address and proportion of the entire direct risk assumed by each insurer. A surplus lines agent may not delegate the duty to issue any such document to producing general lines agents without prior written authority from the surplus lines insurer. A general lines agent may issue any such document only if the agent has prior written authority from the surplus lines agent. The surplus lines agent must maintain copies of the authorization from the surplus lines insurer and the delegation to the producing general lines agent. The producing agent must maintain copies of the written delegation from the surplus lines agent and copies of any evidence of coverage or certificate of insurance which the producing agent issues or delivers. Any evidence of coverage issued by a producing agent pursuant to this section must include the name and address of the authorizing surplus lines agent.
§ 626.922(1) (emphasis added).
Here, MacDuff, as the surplus lines agent, was required to promptly issue and deliver to Lighthouse evidence of the insurance consisting either of the Policy as issued by Essex, or, if the Policy was not then available, a certificate, cover note, or other confirmation of insurance. MacDuff was prohibited from delegating the duty to issue proof of the insurance to the producing general lines agent without prior written authority from Essex. The general lines agent was only authorized to issue proof of the insurance if the agent had prior written authority from MacDuff. MacDuff was required to maintain copies of any authorization from Essex. The producing agent was required to maintain copies of any written delegation from MacDuff.
There is no record evidence that MacDuff promptly issued and delivered evidence of the insurance to Lighthouse, that Essex ever gave prior written authority to MacDuff to delegate the duty of issuing proof of the insurance, or that the general lines agent had prior written authority from MacDuff to issue proof of the insurance. Moreover, Essex did not deliver the Policy until after the Zota accident. (DE #58; DE #88 Ex. E). MacDuff never delivered the Policy, at any time, to Lighthouse. (DE #88 Ex. E). As there is no record evidence of compliance with § 626.922(1), the Court must conclude that Essex is precluded from asserting a lack of coverage.
Essex argues that "The written delegation rule only applies toissuing a certificate, cover note, or other confirmation of insurance, that is, issuing a substitute for an actual policy of insurance." (DE #103). However, the plain language of the statute contradicts Essex's assertion. Section 626.922(1) states in pertinent part: "Upon placing a surplus lines coverage, the surplus lines agent shall promptly issue and deliver to the insured evidence of the insurance consistingeither of the policy as issued by the insurer or, if such policy is not then available, a certificate, cover note, or other confirmation of insurance. . . . A surplus lines agent may not delegate the duty to issue any such document . . ." § 626.922(1) (emphasis added). Thus, the written designation rule applies not only to issuing a certificate, cover note, or other confirmation of insurance, but also to the policies themselves. Here, as stated supra, there is no record evidence of a written designation. Therefore, Essex and MacDuff failed to comply with § 626.922(1).
Essex also argues that § 627.421(1) grants authority to deliver the Policy to the insured's agent. (DE #103). Section 627.421(1) provides:
Subject to the insurer's requirement as to payment of premium, every policy shall be mailed or delivered to the insured or to the person entitled thereto not later than 60 days after the effectuation of coverage.
§ 627.421(1). However, § 627.421(1) does not supercede § 626.922(1), and § 626.922(1) is explicit in its requirement that evidence of the insurance must be delivered "to the insured."
In addition, Essex argues that under Florida law, delivery of an insurance policy to an agent constitutes delivery to the insured. It argues that the Policy, the endorsements, and the exclusionary language were delivered to the agent for the insured. However, the cases cited by Essex in support of its proposition, United Nat'l Ins. Co. v. Jacobs, 754 F.Supp. 865 (M.D. Fla. 1990), and Prudential Ins. Co. of America v. Latham, 207 So.2d 733 (Fla. 3d DCA 1968), arose prior to 1998. Neither case analyzes the present incarnation of § 626.922, which was amended in 1998. These cases cannot be deemed controlling law with regard to § 626.922. As stated supra, the plain language of § 626.922(1) is clear, and it requires a prior written delegation of authority for delivery of evidence of insurance. Here, there is no record evidence of a prior written delegation of authority.
It is undisputed that Essex and its surplus lines agent, MacDuff, failed to deliver the Policy and its exclusions to Lighthouse as required by Fla. Stat. §§ 626.922(1) and 627.421. Essex is therefore precluded from asserting lack of coverage, and the Defendants are entitled to summary judgment as a matter of law. Having made this finding, the Court need not consider the other contentions raised by Defendants. Moreover, Plaintiff's Renewed Motion for Summary Final Judgment must fail because absent compliance with § 626.922(1), Plaintiff is precluded from using the terms of the Policy against the Defendants. Accordingly, Plaintiff's Renewed Motion for Summary Final Judgment is denied.
III. CONCLUSION
Based upon the foregoing reasons, it is ORDERED AND ADJUDGED as follows:
(1) Defendants Lighthouse, Farji, and Broward Executives' Motion for Summary Judgment [DE #88] is hereby GRANTED.
(2) Pursuant to the Zota Defendants' Notice of Adoption, Summary Judgment is GRANTED in their favor.
(3) Plaintiff's Renewed Motion for Summary Final Judgment [DE #85] is hereby DENIED.
(4) Final Declaratory Judgment will be entered in a separate Order.
DONE AND ORDERED.