Alamo-Cruz v. Evanston Ins. Co.
| Decision Date | 01 November 2018 |
| Docket Number | Case No. 17-60671-CIV-WILLIAMS |
| Citation | 369 F.Supp.3d 1277 |
| Parties | Efrain ALAMO-CRUZ and Maria Alamo-Cruz as assignees of Robin A. Croce, Plaintiff, v. EVANSTON INSURANCE COMPANY f/k/a Alterra Excess & Surplus Insurance Company, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Scott A. Arthur, Lee Delton Gunn, IV, Gunn Law Group, P.A., Tampa, FL, for Plaintiff.
James Miller Kaplan, Kimberly Sarah Heifferman, Kaplan Zeena LLP, Miami, FL, for Defendant.
THIS MATTER is before the Court on Magistrate Judge Edwin G. Torres' Report and Recommendation (the "Report") recommending that Defendant's motion to dismiss be granted with prejudice. (DE 38). Plaintiffs timely filed objections to the Report and Defendant filed a response. (DE 43, 47). For the reasons set forth below, the Court DECLINES to adopt the Report (DE 38) and Defendant's motion to dismiss (DE 25) is DENIED.
On June 1, 2011, Plaintiff Efrain Alamo-Cruz was performing tree-trimming services, as an independent contractor for Affordable Treemen Inc., in Plantation, Florida. (DE 20-1 ¶ 14). While trimming a palm tree, the electric saw that Mr. Alamo-Cruz was using malfunctioned; it cut the safety harness that secured him to the tree and caused him to fall approximately 30 feet to the ground causing him severe and permanent injuries. (DE 20-1 ¶¶ 15, 17). On January 20, 2015, Plaintiffs filed a state court lawsuit against Affordable Treemen and Robin A. Croce (Affordable Treemen's President) advancing negligence claims against them. (DE 20-1). Although Affordable Treemen and Croce were insured by a General Commercial Liability policy issued by Defendant, Defendant denied insurance coverage because the insurance policy (the "Policy") contains a provision excluding recovery for bodily injury to independent contractors. (DE 20 ¶ 5). The state court case concluded with a judgment against Affordable Treemen and Croce for $ 23,065,991.00. (DE 20 ¶ 6).1
On May 25, 2017, Croce assigned to Plaintiffs all rights or actions she has against Defendant, and on April 5, 2017, Plaintiffs brought this action advancing breach of contract and bad faith claims based on of Defendant's denial of insurance coverage for the claims Plaintiffs asserted in the state court action. (DE 1; DE 20 ¶ 8). Defendant then filed a motion to dismiss alleging, inter alia , that the Policy's provision excluding recovery for bodily injury to independent contractors barred Plaintiffs' claims.
On December 20, 2017, Judge Torres issued the Report, concluding that because Mr. Alamo-Cruz sustained injuries while he was performing independent contractor duties for Affordable Treemen, his claims against Affordable Treemen and Croce are excluded from coverage under the Policy's independent contraction liability exclusion. (DE 38).
After conducting a careful and complete review of the findings and recommendations, a district judge may accept, reject or modify the magistrate judge's report and recommendation. 28 U.S.C. § 636(b)(1) ; Williams v. Wainwright , 681 F.2d 732, 732 (11th Cir. 1982), cert. denied , 459 U.S. 1112, 103 S.Ct. 744, 74 L.Ed.2d 964 (1983). A district judge "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1)(C). This requires that the district judge "give fresh consideration to those issues to which specific objection has been made by a party." Jeffrey S. by Ernest S. v. State Bd. of Educ. of Ga. , 896 F.2d 507, 512 (11th Cir. 1990) (quoting H.R. 1609, 94th Cong., § 2 (1976)). The district judge reviews legal conclusions de novo , even in the absence of an objection. See Cooper-Houston v. Southern Ry. Co. , 37 F.3d 603, 604 (11th Cir. 1994).
Additionally, to survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead sufficient facts to state a claim that is "plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The Court's consideration is limited to the allegations in the complaint. See GSW, Inc. v. Long Cnty. , 999 F.2d 1508, 1510 (11th Cir. 1993). All factual allegations are accepted as true and all reasonable inferences are drawn in the plaintiff's favor. See Speaker v. U.S. Dep't. of Health & Human Servs. Ctrs. for Disease Control & Prevention , 623 F.3d 1371, 1379 (11th Cir. 2010) ; see also Roberts v. Fla. Power & Light Co. , 146 F.3d 1305, 1307 (11th Cir. 1998). Although a plaintiff need not provide "detailed factual allegations," a plaintiff's complaint must provide "more than labels and conclusions." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (internal citations and quotations omitted). "[A] formulaic recitation of the elements of a cause of action will not do." Id. Rule 12(b)(6) does not allow dismissal of a complaint because the court anticipates "actual proof of those facts is improbable," but the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Watts v. Fla. Int'l Univ. , 495 F.3d 1289 (11th Cir. 2007)(quoting Twombly , 550 U.S. at 545, 127 S.Ct. 1955 ).
The issue before the Court is whether the exclusion of liability for bodily injuries sustained by independent contractors ("Independent Contractor Exclusion") precludes coverage for Croce, as President and agent of Affordable Treemen.2 Although the Policy was issued to Affordable Treemen, there is no dispute that Croce was insured under the Policy, which states that "your" "executive officers" and "directors" are insureds. (De 20-2). However, Defendant argues that because Mr. Alamo-Cruz was performing services for Affordable Treemen when he suffered his injuries, the plain language of the Independent Contractor Exclusion precludes coverage for Croce as well. Defendant also argues that the allegations in the underlying state court complaint suggest that Mr. Alamo-Cruz had a working relationship with Croce but the Court does not agree. The complaint filed in state court in the underlying litigation specifically alleges that Mr. Alamo Cruz did not perform independent contracting services for Croce. Even if there were some ambiguity, at this stage of the proceedings, the Court must take Plaintiffs' allegations as true and construe them in the light most favorable to Plaintiffs. See Ortega Trujillo v. Banco Cent. Del Ecuador , 17 F.Supp.2d 1334, 1337 (S.D. Fla. 1998). Thus, the outcome of this motion turns on the interpretation of the Policy.
The Independent Contractor Exclusion provides, in relevant part:
This insurance does not apply to ‘bodily injury’, personal and advertising injury’, or ‘medical payments' to any independent contractor, subcontractor, casual laborer or volunteer worker, or to any employee of any independent contractor, subcontractor, while performing work for you.
(DE 20-2). Under the Policy, "the words ‘you’ and ‘your’ refer to the Named Insured shown in the Declarations, and any other person or organization qualifying as a Named Insured." (Id. )
Plaintiffs concede that Mr. Alamo-Cruz was performing services for Afforable Treemen when the accident happened, but they argue that the Independent Contractor Exclusion must be read in conjunction with the Policy's separation of insureds provision ("Separation of Insureds Provision") which states, in relevant part:
(DE 20-2). Reading the two provisions together and the Policy as a whole, Plaintiffs argue that their claims against Croce are not precluded from coverage because Mr. Alamo-Cruz did not have an independent contractor relationship with Croce.
Two cases have framed the Parties' discussion. Defendant cites to TNT Equip. Inc. v. Amerisure Mut. Ins. Co. , No. 615CV14610RL37DAB, 2016 WL 5146198 (M.D. Fla. Sept. 21, 2016) to support its argument that the Independent Contractor Exclusion is not limited by the Separation of Insureds Provision. TNT involved a dispute arising out of an accident that occurred at a construction site of a hotel. While performing stucco work, a worker's equipment collapsed and caused him to fall approximately forty to fifty feet. The defective equipment was under lease from TNT to the main contractor. When the worker sued TNT for negligence, TNT filed a declaratory action against the insurer. The policy at issue had an exclusionary provision, which provided:
This insurance does not apply to ‘bodily injury’ or ‘property damage’ arising out of either your ongoing operations or operations included within the ‘products completed operations hazard’ if such operations were at any time included within a ‘controlled insurance program’ for a construction project in which you are or were involved.
Id. at *2. The policy also had a separation of insureds provision stating that "this insurance applies ... [a]s if each Named Insured were the only Name Insured ..." Id. at *3. TNT did not dispute that the contractor had a separate "controlled insurance program" that covered the construction project. However, TNT argued that the exclusionary provision did not apply to "Additional Insureds" such as TNT, because, in TNT's view, the terms "you" and "your" in the exclusionary provision refer only to the contractor as the "Named Insured." The Court disagreed with TNT, finding that the separation of insureds provision did not identify TNT as an Additional Insured or distinguish the rights of any insureds and did not otherwise limit the exclusionary provision.
On the other end of the spectrum, Plaintiffs point to Evanston...
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