Am. Home Assurance Co. v. Weaver Aggregate Transp., Inc.

• Decision Date: 26 December 2013
• Docket Number: Case No. 5:10–cv–329–Oc–10PRL.
• Citation: 990 F.Supp.2d 1254
• Parties: AMERICAN HOME ASSURANCE COMPANY, a New York corporation, Plaintiff, v. WEAVER AGGREGATE TRANSPORT, INC., a Florida corporation, Beacon Industrial Staffing, Inc., a Michigan corporation, Defendants. Weaver Aggregate Transport, Inc., a Florida corporation, Crossclaim Plaintiff, v. Beacon Industrial Staffing, Inc., a Michigan corporation, Crossclaim Defendant. Weaver Aggregate Transport, Inc., a Florida corporation, Third Party Plaintiff, v. Salvatore Manzo, and Salcor Properties, Inc., Michigan corporation d/b/a S & M Management, Inc., Third–Party Defendants.
• Court: U.S. District Court — Middle District of Florida

990 F.Supp.2d 1254

AMERICAN HOME ASSURANCE COMPANY, a New York corporation, Plaintiff,

v.WEAVER AGGREGATE TRANSPORT, INC., a Florida corporation, Beacon Industrial Staffing, Inc., a Michigan corporation, Defendants.

Weaver Aggregate Transport, Inc., a Florida corporation, Crossclaim Plaintiff,

v.Beacon Industrial Staffing, Inc., a Michigan corporation, Crossclaim Defendant.

Weaver Aggregate Transport, Inc., a Florida corporation, Third Party Plaintiff,

v.Salvatore Manzo, and Salcor Properties, Inc., Michigan corporation d/b/a S & M Management, Inc., Third–Party Defendants.

Case No. 5:10–cv–329–Oc–10PRL.

United States District Court,

M.D. Florida,

Ocala Division.

Dec. 26, 2013.

Aaron S. Weiss, Steven J. Brodie, Thomas Meeks, Carlton Fields Jorden Burt, PA, Miami, FL, Alexander David Del Russo, Carlton Fields, PA, West Palm Beach, FL, for Plaintiff.

Bridgette Mannino Blitch, C. Robert Pickett, J.W. Taylor, Taylor & Associates, Attorneys at Law, PL, Winter Haven, FL, for Cross Claimant/Third Party Plaintiff/Defendant.

Claude M. Harden, III, Appel Harden Law Group, Lakeland, FL, for Defendants/Cross Defendant.

Hank B. Campbell, William Thompson McKinley, James C. Valenti, Lakeland, FL, Jonathan Stidham, Jeffrey Sullivan, Stidham & Stidham, PA, Bartow, FL, for Third Party Defendants.

ORDER ON ALL PENDING DISPOSITIVE MOTIONS

HODGES, District Judge.

Plaintiff American Home Assurance (“American Home”) issued two workers' compensation and employer liability insurance policies to Defendant Weaver Aggregate Transport, Inc. (“Weaver”). The workers covered by the policies were provided to and performed work for Weaver pursuant to a Client Services Agreement between Weaver and Defendant Beacon Industrial Staffing, Inc. (“Beacon”). American Home contends that Weaver and Beacon provided false information to American Home concerning the number of covered employees, the types of work the employees performed, and the geographical location of the employees; and, as a result, American Home claims that Weaver and Beacon underpaid the premiums on the policies by over $400,000.

American Home has asserted seven state-law claims alleging, among other things, breach of contract, unjust enrichment, and fraudulent inducement against Weaver and Beacon seeking recovery of the unpaid premiums and damages (Doc. 47). Weaver has asserted seven cross-claims against Beacon and a seven-count third-party complaint against Salvatore Manzo and Salcor Properties, Inc. (“Salcor”), contending that Beacon, Manzo, and Salcor committed fraud upon Weaver, and are the parties who should ultimately be responsible for the unpaid insurance premiums (Doc. 143).

This Court has subject matter jurisdiction over the entire case pursuant to 28 U.S.C. § 1332, and there is no dispute that this Court has personal jurisdiction over all Parties.

The case is presently before the Court for consideration of multiple dispositive motions: (1) Defendant Weaver's Motion for Partial Summary Judgment as to Count 1 of American Home's Amended Complaint (Doc. 165); (2) Cross–Defendant Beacon's Motion to Dismiss (Doc. 144); (3) Cross–Defendant Beacon's Motion for Summary Judgment (Doc. 160); (4) Third–Party Defendant Salcor's Motion to Dismiss (Doc. 145); (5) Third–Party Defendant Salcor's Motion for Summary Judgment (Doc. 163); (6) Third–Party Defendant Manzo's Motion to Dismiss (Doc. 146); and (7) Third–Party Defendant Manzo's Motion for Summary Judgment (Doc. 167). Each of the motions has been responded to (Docs. 175, 149, 176, 150, 177, 151, 178), and they are ripe for disposition. ¹ All of them will be Denied.

Undisputed Material Facts

I. The Parties

American Home is a New York corporation with its principal place of business located in New York City, New York. It is an insurer authorized to provide workers' compensation and employer liability insurance in Florida. Weaver is a Florida trucking corporation with its principal place of business located in Sumterville, Florida. Weaver is engaged in the business of transporting aggregate and other materials throughout Florida. At all times relevant to this case, Weaver operated solely in Florida.

Beacon is a professional employee staffing organization which leased employees and provided various payroll and human resources services to its clients, including Weaver. Beacon is incorporated and has its principal place of business in Michigan. Beacon primarily leased employees to trucking companies operating in Michigan, Indiana, and Illinois. It was not licensed to lease employees in Florida. Beacon ceased all business operations at the end of 2008, but has not yet been dissolved.

At all relevant times, Salvatore Manzo was the Vice President and Chief Operating Officer of Beacon. He was also a principal and officer of Salcor. Salcor was Beacon's paying agent, and was responsible for accepting and processing Weaver's payments to Beacon, including Weaver's payments to Beacon for worker's compensation insurance coverage.

Weaver entered into a Client Services Agreement (“CSA”) with Beacon on January 1, 2003 (Doc. 47, Ex. E). The CSA was negotiated and executed by Manzo on behalf of Beacon, and by Russell Weaver, as President of Weaver. Under the CSA, Beacon agreed to lease individuals to work for Weaver, and to provide all payroll and human resources services for those persons. More specifically, Beacon agreed to interview, hire, supervise, discipline, and fire individuals assigned to work for Weaver. At all times the individuals Beacon assigned to work for Weaver remained employees of Beacon, and Beacon agreed to remain responsible for the payment of all salaries, federal, state, and local taxes, worker's compensation coverage, and non-obligatory fringe benefits ( Id., Ex. E, Section IV, ¶ B). With respect to insurance, Beacon agreed to “furnish and keep in full force and effect, at all times during the term of this Agreement, Workers' Compensation Insurance covering all [Beacon] employees leased to [Weaver] under the terms of this Agreement.” ( Id., Ex. E, Section V, ¶ A). American Home is not a party to the CSA and is not mentioned in the agreement.

At the time Beacon and Weaver entered into the CSA, Beacon was already providing leased employee services for two other trucking companies owned by Russell Weaver that did business in Illinois and Michigan. Although Beacon contends that it was not authorized to provide services to Weaver in Florida, there is nothing in the CSA that limits its operation to specific geographical areas, and the CSA is silent as to Weaver's business address or the geographical scope of Weaver's operations.

II. The Insurance Policies

On December 23, 2004, Patrick Green, Beacon's insurance agent, solicited quotes for workers' compensation insurance from the Goff Group, Inc. (“Goff”), an insurance broker located in Alabama. On or about December 27, 2004, American Home received a request from Goff to provide a quote for workers' compensation and employee liability insurance with Weaver as the named insured. Goff submitted its request through American Home's online quoting program, called “PEGA.” The online request listed the applicant as “Weaver Aggregate,” stated that the insured was located in Alabama, and contained information regarding the nature of Weaver's business, the number of employees, and the estimated annual employee remuneration for the year for which coverage was sought (Doc. 47, Ex. F).

Based on this information, American Home submitted a quote to Goff, who accepted the quote on behalf of Weaver on December 27, 2004. That same day, American Home issued to Weaver a “Binder for Workers' Compensation and Employer Liability Insurance” (Doc. 47, Ex. G). The notification attached to the Binder expressly states that:

Binding is subject to the following:

• Any changes in rates and/or experience modification by any entity having jurisdiction over this policy.

• Final premium will be determined at the end of the policy period after payoffs have been audited and applicable rates and experience modification have been applied.

• Receipt of a completed signed Acord application and experience modification worksheet within 48 hours.

Id.

On December 27, 2004, Patrick Green (Beacon's insurance agent) faxed a signed Acord application to Goff, who then hand delivered the Acord to American Home on December 28, 2004, along with $48,539 (representing a 50% down payment and 3 installment payments) (Doc. 47, Exs. H–I). The cover letter to American Home that was attached to the signed Acord was from Goff, and it directed American Home to issue the policy with an effective date of December 28, 2004 ( Id., Ex. H). The Acord stated that Weaver was the named insured, and that Weaver had 30 employees (15 trucking employees and 15 clerical employees). The Acord also listed Weaver's business operations address as 1901 Finley Boulevard, Birmingham, Alabama 35234. It was also represented that all of Weaver's employees worked in Alabama (Doc. 47, Ex. I). The Acord application purported to be signed by Russell Weaver, President of Weaver. His signature appeared in two separate places—under “Applicant's Signature” and under “Signature of Corporate Officer.” ( Id.). However, Mr. Weaver testified at his deposition that he never signed the Accord, and that the signatures on the document are a forgery. (Doc. 166, pp. 10–15).

American Home subsequently received a letter dated February 2, 2005 from Goff instructing American Home to provide endorsements adding Florida coverage to the policy with an effective date of January 17, 2005 (Doc. 47, Ex. J). The letter included an Acord Florida Workers Compensation Application dated January 17, 2005, which contained the notarized signature of Russell Weaver as “Owner/Officer” of Weaver ( Id., Ex. K). The Acord added an additional location for Weaver at 2020 E. County Road 470, Sumterville, Florida 32585, and listed five (5) clerical and four (4) trucking employees, all of whom were located in...