Opinion
Case No. 1:22-cv-23091-KMM
2024-01-11
MT. HAWLEY INSURANCE COMPANY, Plaintiff, v. H&M BUILDERS, LLC, and Gloria Escalante, as the Personal Representative For the Estate of Alexander Aguilar, Defendants.
Fay E. Ryan, Yonit Rosengarten, Butler Weihmuller Katz Craig, LLP, Tampa, FL, for Plaintiff. Christopher Thomas Kuleba, Garrett Samuel Nemeroff, Reed Smith, Miami, FL, for Defendants. Mara Ritchie Poncy Hatfield, Searcy Denney Scarola Barnhart and Shipley PA, West Palm Beach, FL, for Intervenor Defendant Personal Rep. Gloria Escalante.
Fay E. Ryan, Yonit Rosengarten, Butler Weihmuller Katz Craig, LLP, Tampa, FL, for Plaintiff.
Christopher Thomas Kuleba, Garrett Samuel Nemeroff, Reed Smith, Miami, FL, for Defendants.
Mara Ritchie Poncy Hatfield, Searcy Denney Scarola Barnhart and Shipley PA, West Palm Beach, FL, for Intervenor Defendant Personal Rep. Gloria Escalante.
OMNIBUS ORDER
K. MICHAEL MOORE, UNITED STATES DISTRICT JUDGE.
THIS CAUSE came before the Court upon Defendant Gloria Escalante's Motion for Summary Judgment on Mt. Hawley's Duty to Defend its Insured as a Matter of Law ("Escalante Mot.") (ECF No. 49), Defendant H&M Builders, LLC's ("H&M") Motion for Summary Judgment ("H&M Mot.") (ECF No. 50), Defendant H&M's Omnibus Motion in Limine ("Mot. in Limine") (ECF No. 52), and Plaintiff Mt. Hawley Insurance Company's ("Mt. Hawley" or "Plaintiff") Memorandum of Law in Support of its Motion for Summary Judgment ("Plaintiff's Mot.") (ECF No. 56). Each Motion is relevant to the singular issue before the Court: Whether Plaintiff has a duty to defend Defendant H&M in an underlying state court litigation ("Underlying Action"). The Court finds that it does.
The Court uses the term "Defendants" when referring both to Defendant Escalante and Defendant H&M Builders, LLC.
Each summary judgment motion is fully briefed. For ease of reference and to avoid confusion about which pleadings refer to which motion, the Court will cite all responses in opposition and replies by their docket entry number.
I. BACKGROUND
This case arises out of tragic circumstances. On July 18, 2019, Alexander Aguilar was present at the Shul of Bal Harbour, Inc. ("SHUL") construction site located at 9540 Collins Avenue, Surfside, Miami-Dade County, Florida. ("Underlying Complaint" or "Underlying Compl.") (ECF No. 12-2 ¶ 12). H&M is a shell contractor who was hired to "construct the shell" at the SHUL construction site. ("Am. Compl.") (ECF No. 12 ¶ 8). H&M allegedly subcontracted with J.C. Road-buster, Inc. ("JCR"), which, in turn, arranged for Aguilar to assist with the construction project. Id. ¶ 9-11. While Aguilar was threading rebar poles at the construction site, the pole contacted or came into close proximity with an uninsulated high voltage line, fatally electrocuting him. See Underlying Compl. ¶ 24-25. Defendant Escalante, as the personal representative of Aguilar, brought suit against Defendant H&M alleging common law negligence in the Circuit Court of the Eleventh Judicial Circuit, in and for Miami-Dade County Florida. See Escalante v. Schmid Construction, Inc., No. 2020-013127-CA-01.
The Underlying Action also included claims against Schmid Construction Inc., SHUL, and Florida Power & Light Company. See generally Underlying Compl.
The instant Action, however, seeks the resolution of a dispute between H&M and its purported insurer, Plaintiff Mt. Hawley. See generally Am. Compl. Plaintiff has
been defending H&M in the Underlying Action with a complete reservation of rights, see id. ¶ 18, and here, seeks a declaratory judgment adjudicating the rights of itself and H&M pursuant to their insurance policy ("Policy") (ECF No. 1-5). See id. ¶ 48. Specifically, Plaintiff requests that the Court declare:
(i) [t]hat there is no coverage for H&M because it failed to satisfy all the requirements in the Contractors Conditions of coverage;
(ii) [t]hat there is no coverage for H&M because the Workers' Compensation and Similar Laws exclusion bars coverage;
(iii) [t]hat there is no coverage for H&M because the Employer's Liability exclusion bars coverage;
(iv) [t]hat there is no coverage for H&M under the excess liability policy because there is no coverage for H&M under the underlying insurance; and
(v) [t]hat Mt. Hawley is entitled to reimbursement of all costs it incurred defending H&M because it has been defending H&M under a complete reservation of rights.
Id. ¶ 48(b). Thus, the question before the Court is to what extent, if at all, must Plaintiff defend H&M in the Underlying Action.
To determine this question, the Court considers the relevant law and the insurance policy agreement governing the circumstances under which Plaintiff must provide coverage to H&M. See generally Policy. Of particular relevance to this question are whether: (1) Defendant satisfied certain prerequisites to coverage under the Policy; and (2) various exclusions bar coverage. The Court discusses the relevant Policy provisions in detail below. See Section IV, infra.
II. PROCEDURAL HISTORY
After initiating this Action, on February 1, 2023, H&M filed a Renewed Motion to Dismiss, or, in the Alternative, Stay Mt. Hawley's Declaratory Judgment Action. (ECF No. 30). Therein, Defendant requested that the Court dismiss or stay Plaintiffs request for declaratory relief as to the duty to indemnify H&M in the Underlying Action. See generally id. The Court carefully considered the Parties' briefings and granted the motion in part and denied the motion in part. See (ECF No. 40). In doing so, the Court instructed the Parties that it "will only address issues pertaining to [Plaintiff's] duty to defend" and stayed all issues and discovery relating to Plaintiffs potential duty to indemnify pending full adjudication of the Underlying Action. See id. at 6.
Shortly thereafter, each Party filed a dispositive motion relating to the duty to defend. Urging the Court to consider only the Underlying Complaint and the Policy in determining this issue, Defendants contend that they are entitled to a determination that Plaintiff must defend H&M in the Underlying Action. See generally Escalante Mot.; H&M Mot. Plaintiff argues that the Court should consider extrinsic evidence when making this determination, and upon doing so, must determine that the Policy terms bar coverage. See generally Plaintiffs Mot. The matter is now ripe for review.
III. LEGAL STANDARD
Summary judgment is appropriate where there is "no genuine issue as to any material fact [such] that the moving party is entitled to a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (quoting Fed. R. Civ. P. 56). A genuine issue of material fact exists when "a reasonable jury could return a verdict
for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (citation omitted). "For factual issues to be considered genuine, they must have a real basis in the record." Mann v. Taser Int'l, Inc., 588 F.3d 1291, 1303 (11th Cir. 2009) (citation omitted). Speculation cannot create a genuine issue of material fact sufficient to defeat a well-supported motion for summary judgment. See Cordoba v. Dillard's, Inc., 419 F.3d 1169, 1181 (11th Cir. 2005).
The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). In assessing whether the moving party has met this burden, a court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the non-moving party. Denney v. City of Albany, 247 F.3d 1172, 1181 (11th Cir. 2001). Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to present evidence showing a genuine issue of material fact that precludes summary judgment. Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002); Fed. R. Civ. P. 56(e). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citation omitted). But if the record, taken as a whole, could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial, and summary judgment is proper. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted).
IV. DISCUSSION
The lynchpin of each summary judgment motion, and the subject of the Motion in Limine, is whether the Court may consider extrinsic evidence in determining whether Plaintiff has a duty to defend in the Underlying Action. If the Court may rely on extrinsic evidence pertaining to Aguilar's employment status, such evidence directly supports Plaintiffs claim that the Policy's exclusions defeat the duty to defend. See generally Plaintiff's Mot. But should the Court find that it may not consider extrinsic evidence, Plaintiff's arguments quickly dissipate.
Therefore, the Court first determines whether, in analyzing a duty to defend, it must adhere to the "eight corners" rule and consider only the facts alleged in the Underlying Complaint and in the Policy, or alternatively, if the Court may consider extrinsic evidence. Because the Court finds that it must adhere to the eight corners rule, and no exception permitting it to consider extrinsic evidence applies, the Court then analyzes the relevant Policy exclusions and prerequisites accordingly. The Court next addresses the Policy's Workers' Compensation Exclusion, the Employers' Liability Exclusion, and Contractors Conditions of Coverage Endorsement, in turn. Ultimately, the Court finds that Plaintiff has a duty to defend H&M in the Underlying Action, and thus, Plaintiff's Motion is denied, and Defendant's motions are granted to that extent.
Defendant Escalante also seeks a stay of the Action in its entirety. See Escalante Mot. at 1-2. Because the issue of whether Plaintiff has a duty to defend is ripe, the Court denies this request.
A. No Exception to the Eight Corners Rule Applies
Pursuant to Florida law, "the determination of an insurer's duty to defend falls under the so-called 'eight corners
rule,' the name of which refers to the four corners of the insurance policy and the four corners of the underlying complaint." Addison Ins. Co. v. 4000 Island Boulevard Condo. Assoc. Inc., 721 F. App'x 847, 854 (11th Cir. 2017) (citing Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 182 (4th Fla. Dist. Ct. App. 2015)). When adjudicating whether the insurer has a duty to defend, the Court will only consider the factual allegations "from the allegations in the complaint against the insured, not by the true facts of the cause of action against the insured, the insured's version of the facts or the insured's defenses." State Farm Fire and Cas. Co. v. Steinberg, 393 F.3d 1226, 1230 (11th Cir. 2004) (citing Amerisure Ins. Co. v. Gold Coast Marine Distributors, Inc., 771 So. 2d 579, 580-81 (4th Fla. Dist. Ct. App. 2000)). "If the allegations in the complaint state facts that bring the injury within the policy's coverage, the insurer must defend regardless of the merits of the lawsuit. Furthermore, any doubt about the duty to defend must be resolved in favor of the insured." First Mercury Ins. Co. v. First Florida Bldg. Corp., No. 8:20-cv-1929-CEH-MRM, 2022 WL 4017061, at *4 (M.D. Fla. Sept. 2, 2022) (citations omitted). The duty to defend therefore attaches "even if the allegations in the complaint are factually incorrect or meritless." Jones v. Fla. Ins. Guar. Ass'n, Inc., 908 So. 2d 435, 443 (Fla. 2005) ("[W]hen the actual facts are inconsistent with the allegations in the complaint, the allegations in the complaint control.") (internal quotation omitted). In sum, the Court adjudicates whether a party has a duty to defend based on the eight corners rule, and if the complaint contains factual allegations (even if incorrect) that, at a minimum, raise a doubt about the duty to defend, the Court is compelled to find that the insurer must defend the insured in the underlying action.
In "exceptional cases," however, the Court may consider extrinsic evidence beyond the eight corners rule to determine if a duty to defend exists. See Stephens v. Mid-Continent Cas. Co., 749 F.3d 1318, 1323 (11th Cir. 2014). The first exception permits a court to "consider extrinsic facts if those facts are undisputed, and, had they been pled in the complaint, they clearly would have placed the claims outside the scope of coverage." Id. (citing Nateman v. Hartford Cas. Ins. Co., 544 So. 2d 1026 (3d Fla. Dist. Ct. App. 1989); Nationwide Mut. Fire Ins. Co. v. Keen, 658 So. 2d 1101 (4th Fla. Dist. Ct. App. 1995)). This exception applies only in "exceptional cases" where "it is manifestly obvious to all involved that the actual facts placed the claims outside the scope of coverage." First Specialty Ins. Corp. v. 633 Partners, Ltd., 300 F. App'x 777, 786 (11th Cir. 2008). The second exception permits for the consideration of extrinsic evidence "where an insurer's claim that there is no duty to defend is based on factual issues that would not normally be alleged in the complaint." Higgins v. State Farm Fire and Cas. Co., 894 So. 2d 5, 10 n.2 (Fla. 2004) ("One example would be when the insurer claims that the insured did not provide sufficient notice of
Plaintiff argues that a related exception exists where a defendant fails to provide a competing version of facts. See (ECF No. 66 at 7) (citing Mr. Hawley Ins. Co. v. L'Excellence Condo. Ass'n, 440 F. Supp. 3d 1323, 1329 (S.D. Fla. 2020)). That case does not establish a third exception. Rather, Judge Altonaga found that Defendants did not rebut the plaintiff's contention regarding the purpose for hiring third party GC Construction, and thus, "the parties do not dispute [that] L'Excellence hired GC Construction to perform construction, renovations, repairs, or maintenance." L'Excellence, 440 F. Supp. 3d at 1329. Such a holding neatly fits under the first exception, namely, whether undisputed facts clearly place the claim outside the scope of coverage.
the claim and therefore breached an assistance and cooperation clause.").
Turning now to the Parties' submissions, the central argument present in each of the summary judgment briefings and the Motion in Limine is whether the Court should adhere to the general eight corners rule, or alternatively, if this is an "exceptional case" warranting the Court's consideration of extrinsic evidence. See generally Mot. in Limine; H&M Mot. at 6-7, 10-11; Escalante Mot. at 3-4; Plaintiff's Mot. at 8-10. Focusing exclusively on the first exception, Plaintiff argues that Defendant H&M "failed to provide a competing version of facts" to counter Plaintiff's assertion that Aguilar was H&M's "statutory employee." (ECF No. 66 at 7). Plaintiff avers that the question of Aguilar's employment status is therefore undisputed and that the Court may consider extrinsic evidence in determining the duty to defend. Id. at 7-8. Defendant responds that Aguilar's employment status is disputed, the Underlying Complaint labels Aguilar as an "invitee" or "temporary worker," see Mot. in Limine at 2-3, and that any attempt to use H&M's litigation strategy or other related documents from the Underlying Action to argue that the issue is undisputed is improper under Florida law. See id. (quoting Gold Coast Marine Distribs., 771 So. 2d at 580) ("[A]n insurance company's duty to defend an insured is determined solely from the allegations in the complaint against the insured, not by the actual facts of the cause of action against the insured, the insured's version of the facts or the insured's defenses.") (emphasis omitted).
Plaintiff does not argue that the second exception applies in its Motion, and thus, the Court does not address it.
Defendant is correct. Aguilar's employment status is clearly disputed. Whether Aguilar was JCR's employee (and H&M's statutory employee under Florida law), or if Aguilar was an invitee or temporary worker, "are still questions that must be determined by the allegations in the [U]nderlying [C]omplaint." (ECF No. 70 at 14). When the Underlying Action has indicated that this issue has not yet been resolved, and the Parties are actively litigating that question, the Court cannot find that it is "manifestly obvious to all" that Aguilar was H&M's statutory employee, thus permitting the Court to consider extrinsic evidence. First Specialty Ins. Corp., 300 F. Appx. at 786.
Plaintiff is unable to seriously rebut that Aguilar's employment status is still in dispute. While largely ignoring the factual allegations in the Underlying Complaint asserting that Aguilar was an invitee or temporary worker, Plaintiff instead asks the Court to rely on extrinsic evidence, including a police offense-incident report, a notice of accident, a notice of loss, an affidavit of employment compliance, wage statements, an informal settlement agreement, and H&M's legal defense in the Underlying Action, to show that (1) Aguilar's employment status is undisputed, and (2) that Aguilar was JCR's employee. See (ECF No. 66 at 8-9). Put simply, Plaintiff relies on extrinsic evidence, in contravention of the eight corners rule, to argue that Aguilar was undisputedly JCR's employee, even though the Parties clearly dispute this issue, both here and in the Underlying Action. Accord, First Mercury, 2022 WL 4017061, at *6 ("While the Court finds that First Mercury's evidence suggesting FFLLC's employment of Sanchez is compelling, this fact is not conceded by either defendant; on the contrary, it is being actively contested in the state court proceedings."). Because there is a dispute regarding
Aguilar's employment status, the Court does not find that any exception to the eight corners rule applies.
Plaintiff's last-ditch argument that an exception applies because the Underlying Complaint pleads factual allegations that are inconsistent with its labeling of Aguilar as an invitee or temporary worker fares no better. In support of its Motion, Plaintiff asserts that the Court should not find that Aguilar's employment is disputed simply because the Underlying Complaint labels him as an "invitee" or "temporary worker." See (ECF No. 74 at 6) (explaining that Plaintiff "discounts nonspecific, conclusory labels in the [Underlying] [C]omplaint that are insufficient to negate the facts alleged therein which reveal the actual roles and relationships of H&M, [JCR], and Aguilar") (emphasis omitted). Plaintiff argues that Defendants' use of the term "invitee" or "temporary worker" in the Underlying Complaint does not prevent the Court from considering undisputed extrinsic evidence "that fleshes out the parties' relationships." Id. But Plaintiff cites no relevant legal authority for that proposition. See id. at 6-7. Nor is the Court aware of any. Indeed, the Court finds that it would be improper to decide Aguilar's employment status as a matter of law, particularly when that very issue is being actively litigated in the Underlying Action. The Court will not accept the invitation to consider extrinsic information under these circumstances, and thus, considers the relevant Policy exclusions and their impact on Plaintiffs duty to defend under the eight corners rule.
Plaintiff cites one case in the discussion about whether the Court may consider the relationship of the Parties, Diamond State Ins. Co. v. Boys' Home Assoc., Inc., but that case is inapplicable here. 172 F. Supp. 3d 1326, 1339 (M.D. Fla. 2016). When determining whether an insurance company had a duty to defend in a case relating to negligence against Boys' Home Association, that court held that a "prior knowledge exclusion may constitute a circumstance where consideration of extrinsic evidence is appropriate," and that "one would not necessarily expect the State Complaint to disclose the facts relevant to whether [the defendant] had knowledge of its alleged wrongful conduct prior to its execution of the insurance application." Id. at 1339 (citation omitted). It is not immediately clear what relevance, if any, this case has on whether the Parties may consider extrinsic evidence bearing on the relationship between H&M, JCR, and Aguilar.
B. Worker's Compensation Exclusion Does not Defeat the Duty to Defend
Now, the Court turns to the first of multiple exclusions which could potentially bar coverage. The Policy provides coverage for "sums that the insured becomes legally obligated to pay as damages because of 'bodily injury,'" see Policy at 1, but the Policy also contains certain exclusions absolving Plaintiff from defending H&M. See generally id. One such exclusion is the Workers' Compensation and Similar Laws ("Workers' Compensation Exclusion") which states that Plaintiff has no duty to defend "[a]ny obligation of the insured under a workers' compensation, disability benefits, or unemployment compensation law or any similar law." Id. at 2. Under Florida's Worker's Compensation Act ("FWCA"), when an "employee suffers an accidental compensable injury or death arising out of work performed in the course and scope of employment," the employer must provide compensation for that injury or provide benefits through a workers' compensation insurance carrier. Fla. Stat. § 440.09(1) (emphasis added). If Aguilar was an employee as defined under the FWCA, and his injury arose out of work performed in the scope of his employment, the Workers' Compensation Exclusion would apply. Plaintiff and H&M each dispute whether Aguilar may be considered an employee under the FWCA. According to Plaintiff, "Aguilar's death arose out of his employment for [JCR], H&M, and Schmid." (ECF No. 56 at 11). Plaintiff further alleges that Aguilar's death "was [] causally connected to Aguilar's employment for [JCR], the rebar sub-contractor," meaning "Aguilar's death arose out his employment." Id. If Plaintiff's argument is correct, Aguilar's claim would arise under the FWCA and the Workers' Compensation Exclusion would theoretically bar coverage. In its Motion, however, H&M asserts that Plaintiff's argument is erroneously based on extrinsic evidence and "Florida law is [] clear that allegations indicating that the injured party was an 'invitee' or temporary worker of the insured place the suit outside the scope of the workers' compensation and employer's liability exclusions." (ECF No. 50) (citing First Mercury, 2022 WL 4017061 at *14-16).
Though not binding on the Court, First Mercury is persuasive in determining whether Aguilar may be considered an employee. No. 8:20-cv-1929-CEH-MRM, 2023 WL 23116 (M.D. Fla. Jan. 3, 2023). In First Mercury, the court considered an almost identical scenario. There, First Mercury sought a judicial determination that it had no duty to defend the insured party, First Florida, who were the holders of First Mercury's commercial insurance policy. Id. at *1. As is the case here, First Mercury argued that the workers' compensation and employer's liability exclusions "relieve[d] it of its duty to defend." Id. The court rejected First Mercury's argument because "[i]t [was] also in dispute whether Sanchez was not a temporary worker, a status that would not fall within the policy exclusions." Id. at *2.
The policy exclusions in First Mercury are identical to the ones in this case. Compare First Mercury Ins. Co. v. First Florida Building Corp., No. 8:20-cv-1929-CEH-MRM, ECF No. 1 (M.D. Fla.), with Policy at 2-3. Thus, when analyzing identical provisions, the court in First Mercury held that because there was a dispute as to whether Sanchez was a temporary worker, and because both the workers' compensation and employer's liability exclusions applied only to employees, the plaintiff was not entitled to summary judgment. First Mercury, 2022 WL 4017061, at *6 ("A temporary worker is not an 'employee' as defined in the policy exclusions, which means that if Sanchez were a temporary worker the exclusions would not apply.") (internal citation omitted). The Court finds such analysis persuasive here as well. The Parties dispute Aguilar's employment status, and thus, the Workers' Compensation Exclusion does not bar Plaintiff's duty to defend H&M in the Underlying Action.
Because the Court finds that Aguilar's employment status is disputed and the Workers' Compensation Exclusion does not apply, the Court does not address the Parties' arguments regarding whether the Underlying Complaint asserts claims that are sufficient to overcome the exclusivity provision of the FWCA. See (ECF No. 70 at 11-13); (ECF No. 74 at 8). To make that determination, the Court would have to determine if Plaintiff was an "employee" for the purposes of the FWCA; such a determination would be premature when Aguilar's employment status is yet to be determined. For the same reasons, the Court does not address Defendant Escalante's argument that such extrinsic evidence related to the FWCA's applicability is inadmissible. See Escalante Mot. at 4; (ECF No. 69 at 2).
C. Employer's Liability Exclusion Does Not Bar Coverage
The Employer's Liability Exclusion does not defeat Plaintiff's duty to defend for the same reasons. The Policy's plain text excludes coverage for "[b]odily injury" to "[a]n 'employee' of the insured
arising out of and in the course of: (a) employment by the insured; or (b) performing duties related to the conduct of the insured's business." Policy at 2 (emphasis added). The Policy also excludes "temporary worker[s]" from the definition of "employee." Id. at 17. And "temporary workers" are defined as individuals who are "furnished to [the insured] to substitute for a permanent 'employee' on leave or to meet seasonal or short-term workload conditions." Id. at 20. Just as with the Workers' Compensation Exclusion, the applicability of the Employer's Liability Exclusion turns on Aguilar's employment status. Because Aguilar's employment status is disputed, and indeed actively litigated in the Underlying Action, the Court cannot say that the Employer's Liability Exclusion bars coverage under these circumstances.
Much of Plaintiff's arguments regarding this exclusion's applicability are premised on the fact that, in its view, Aguilar was H&M's employee or "statutory employee." See Plaintiff's Mot. at 13-15. At risk of being repetitive, the Court cannot accept Plaintiff's arguments about Aguilar's employment status at this juncture—doing so would run afoul of the eight corners rule.
D. Contractors Conditions of Coverage Endorsement Does Not Bar Coverage
Lastly, Plaintiff also argues that the Policy contains three preconditions that bar coverage for H&M in the Underlying Action. See Plaintiffs Mot. at 5-10. The Contractors Conditions of Coverage ("Contractors Conditions") provide that Plaintiff does not have an "obligation to defend, or indemnify any 'insured' for any 'bodily injury,' 'property damage,' and/or 'personal and advertising injury' arising directly or indirectly from work by a 'contractor'" unless each one of the following preconditions is satisfied:
(1) Certificates of insurance are obtained from each and every "contractor" prior to commencement of such "contractor's" work. Such certificates of insurance must list primary commercial general liability coverage in effect at all times the work is performed with limits equal to or greater than $1,000,000 per occurrence for "bodily injury" and "property damage", $1,000,000 "personal and advertising injury," $2,000,000 general aggregate, and $1,000,000 products-completed operations aggregate.
(2) Written agreements are obtained from each and every "contractor" which hold harmless and indemnify each "insured" under this policy against whom the claim is made for all injuries, damages, claims, and suits arising directly or indirectly from the "contractor's" work (including any work performed by the "contractor's" subcontractors or sub-subcontractors). Such agreements must expressly provide indemnification to the maximum extent permitted by law. Such agreements must be signed by the parties to the agreement prior to the "occurrence" or offense giving rise to the claim against this policy's "insured(s)."
(3) The written agreements required in condition 2. above must also require that the "contractor" will obtain additional insured coverage under the "contractor's" primary commercial general liability policy for each "insured" under this policy against whom the claim is made. Such agreements must be signed by the parties to the agreement prior to the date of the "occurrence" or offense giving rise to the claim against this policy's "insured(s)". Such agreements must require limits of additional insured coverage equal to or greater than the limits listed in condition 1. above. Such agreements must state that the additional insured coverage is to be primary and noncontributory.
Policy at 38. According to Plaintiff, "[i]t is blackletter law that an insured's failure to comply with a condition precedent to coverage in an insurance policy releases the insurer from any obligations imposed by the insurance contract." Plaintiff's Mot. at 7 (citing Sharp v. Realty & Mgmt., LLC v. Capitol Specialty Ins. Corp., 503 F. App'x. 704, 707 (11th Cir. 2013); Starling v. Allstate Floridian Ins. Co., 956 So. 2d 511, 514 (5th Fla. Dist. Ct. App. 2007)).
Plaintiff also notes that a contractor is defined in the Policy as "any person or entity that any 'insured' hires or contracts with for the performance of any work of construction, renovations, maintenance..., or repairs." Id. at 6 (alteration in original). According to Plaintiff, H&M entered into a subcontract agreement with JCR for the installation of rebar and tensioning cable materials, which was a renovation and expansion project. See id. (citations omitted). Therefore, Plaintiff argues that JCR was a contractor as defined in the Policy and the Contractors Conditions apply to the relationship between JCR and H&M. See id. Upon concluding that JCR was H&M's contractor, Plaintiff argues that: (1) H&M did not comply with the first condition because JCR did not provide H&M with the Certificate of Insurance prior to the commencement of JCR's work; (2) the subcontractor agreement does not impose any indemnification or insurance obligations on JCR in connection with its work for H&M; and (3) the Affidavit of Employment Compliance, which was executed by JCR's president and stated that JCR would indemnify, defend, and hold harmless H&M from and against all liabilities arising out of JCR's act or omissions, does not satisfy the Contractors Coverage preconditions because it was not signed by both parties and did not expressly provide indemnification to the maximum extent permitted by law. See id. at 6-7.
Defendant H&M, however, argues that before addressing whether it purportedly failed to adhere to the Contractors Coverage preconditions, Plaintiff fails to address the threshold question of whether the Contractors Conditions are even applicable. (ECF No. 70 at 3). Because the Contractors Conditions only apply to bodily injury or property damage "arising directly or indirectly from work by a 'contractor,'" and the Underlying Complaint "asserts a negligence claim based solely on H&M's alleged failure to de-energize a powerline next to the Shul project—without any claim or allegation of negligence in the performance of [JCR]'s work," H&M argues that the Contractors Conditions are inapplicable. See id. (emphasis added). Indeed, H&M asserts that Plaintiff "wholly fails" to address that the Underlying Complaint alleges negligence solely on behalf of H&M (and not on purported contractor JCR's work), and thus Plaintiff has waived any argument as to the Contractors Conditions' applicability. See id. at 3-4 (citing N.L.R.B. v. McClain of Georgia, Inc., 138 F.3d 1418, 1422 (11th Cir. 1998)). In other words, H&M argues that whether Aguilar's
To be sure, Defendant H&M also extensively argues that even if Plaintiff had addressed this threshold issue, H&M complied with each condition. See (ECF 70 at 4-11).
injury arose "directly or indirectly from work by a 'contractor'" is a question that Plaintiff does not address, and because the Underlying Complaint alleges that the injury was sustained as a result of H&M's negligence as opposed to work related to JCR, the Contractors Conditions are not triggered and do not bar coverage.
The Court agrees that Plaintiff has failed to make a threshold showing that the Contractors Conditions apply. In a similar case in this district, Mt. Hawley Ins. Co. v. Brickell on the River S. Tower Condo. Assoc., Judge Cooke analyzed a similar question. 474 F. Supp. 3d 1284 (S.D. Fla. 2020). There, Michael Lalla was a passenger on an elevator in Brickell's building which allegedly fell several floors before abruptly stopping and injuring him. Id. at 1286. Brickell had previously contracted with ThyssenKrupp to maintain and test the elevator in its building. See id. Following the accident, Lalla filed a state court action alleging negligence against Brickell, and subsequently, Mt. Hawley (Brickell's insurer) filed a declaratory judgment action in federal court seeking a judgment that it did not have to defend Brickell in the state court case. Id. at 1286-87. Importantly, Lalla's complaint in the underlying action alleged that Brickell's (and not ThyssenKrupp's) "breach of its duty was the sole and proximate cause of plaintiff's injuries and damages." Id. at 1286.
The defendant in this case, Brickell on the River South Tower Condominium Association, is hereinafter referred to as "Brickell."
Judge Cooke considered and rejected Mt. Hawley's argument that it had "no duty to defend under the [policy's preconditions] because Mr. Lalla's injuries arose from the work of a contractor, i.e., ThyssenKrupp." Id. at 1287. In coming to this conclusion, Judge Cooke first determined that she was constrained by the eight corners rule and could "only consider the facts and legal theories alleged in Mr. Lalla's Complaint." Id. at 1288. Upon doing so, Judge Cooke held as follows:
Mr. Lalla alleges that Brickell's negligence alone caused his injuries. If Brickell was not negligent as alleged, Mr. Lalla's physical injuries would not have occurred. For example, Mr. Lalla alleges Brickell failed to shut down the elevator. If Brickell had shut down the elevator, Mr. Lalla would not have been on the elevator as it malfunctioned, injuring him in the process. As such, the Court cannot find the claim is "solely and entirely within the policy exclusion." See Hartford Acc. & Indem. Co., 466 F.3d at 1296; See also Lime Tree Vill. Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993) (recognizing that when the complaint alleges facts that potentially bring any part the suit within the policy coverage, "the insurer is obligated to defend the entire suit").
Id. at 1289. Accordingly, Judge Cooke found that, under a policy with preconditions nearly identical to the ones in this case, that Mt. Hawley had a duty to defend. See id. at 1290.
The same logic applies here. In the Underlying Complaint, Aguilar argues that he was injured solely based on H&M's alleged failure to de-energize a powerline. Underlying Compl. ¶¶ 41-53; (ECF No. 70. at 3). The complaint in the Underlying Action makes no claim that Aguilar was injured as a result of JCR's work. See generally Underlying Compl. Like in Brickell, the
Court cannot examine the allegations in the Underlying Action and conclude that the claim arises out of work by a contractor—had H&M properly de-energized the powerline, Aguilar would not have suffered any injury. Thus, the Contractors Conditions do not bar coverage and Plaintiff has a duty to defend Defendant H&M in the Underlying Action.
Plaintiff attempts to invoke Mt. Hawley Ins. Co. v. Porta Bella Yacht & Tennis Club Condo. Assoc., Inc., No. 9:17-CV-80277-ROSENBERG, 2018 WL 783101 (S.D. Fla. Feb. 8, 2018) for the proposition that "whether [Aguilar's] injury arose directly or indirectly from the contractors' work" is immaterial "because there is no dispute that the area in which [Aguilar] was injured is precisely the area that the contractors worked on." Id. at *5; (ECF No. 74 at 3). That case is distinguishable, however, because unlike in Brickell and this Action, the Plaintiff in Porta Bella Yacht & Tennis Club admitted that her injuries stemmed from the purported subcontractor rather than the insured. See Porta Bella Yacht & Tennis Club, 2018 WL 783101, at *3.
Finally, because the Court finds that Plaintiff has a duty to defend, its request for recoupment of defense costs is denied. See Plaintiff's Mot. at 16-17.
V. CONCLUSION
It has not gone unnoticed that Plaintiff has employed similar, if not identical arguments purporting to defeat its duty to defend in other cases in this District. See, e.g., Brickell, 474 F. Supp. 3d at 1284 (analyzing duty to defend under Mt. Hawley's policy preconditions); Mt. Hawley Ins. Co. v. Roebuck, 383 F. Supp. 3d 1351 (S.D. Fla. 2019) (analyzing whether to consider extrinsic evidence when determining if Mt. Hawley had a duty to defend); but see Porta Bella Yacht & Tennis Club, 2018 WL 783101 (holding that Mt. Hawley had no duty to defend based on the defendant's admission to sustaining an injury from the purported subcontractor). To the extent Plaintiff persists with proffering arguments that are nearly indistinguishable from others that have been rejected in this District, it should not be surprised to see such arguments rejected once more.
UPON CONSIDERATION of the Motion, the pertinent portions of the record, and being otherwise fully advised in the premises, it is hereby ORDERED AND ADJUDGED that Plaintiff's Motion for Summary Judgment (ECF No. 56) is DENIED. Defendant H&M's Motion for Summary Judgment (ECF No. 50) is GRANTED. Defendant Escalante's Motion for Judgment as a Matter of Law (ECF No. 49) is GRANTED IN PART as to the issue of Plaintiffs duty to defend but DENIED IN PART insofar as the motion seeks a stay of the entire case. Accordingly, Plaintiff has a duty to defend H&M in the Underlying Action. IT IS FURTHER ORDERED that upon the resolution of the Underlying Action, any Party may file a motion to lift the stay to resolve the issue of the duty to indemnify. The Clerk of Court is instructed to administratively CLOSE THIS CASE. All pending motions, if any, are denied as moot.
DONE AND ORDERED in Chambers at Miami, Florida, this 11th day of January, 2024.