Aseff v. Catlin Specialty Ins. Co.

• Decision Date: 24 June 2015
• Docket Number: Case No. 1:14–cv–23068–KMM.
• Citation: 115 F.Supp.3d 1364
• Parties: Gipsy ASEFF, Plaintiff, v. CATLIN SPECIALTY INSURANCE COMPANY, INC., f/k/a Wellington Specialty Insurance Company, Defendant.
• Court: U.S. District Court — Southern District of Florida

115 F.Supp.3d 1364

Gipsy ASEFF, Plaintiff,

v.CATLIN SPECIALTY INSURANCE COMPANY, INC., f/k/a Wellington Specialty Insurance Company, Defendant.

Case No. 1:14–cv–23068–KMM.

United States District Court, S.D. Florida.

Signed June 24, 2015.

Christopher Thomas Kuleba, Richard Hugh Lumpkin, Dale Scott Dobuler, Matthew Bryan Weaver, Ver Ploeg, Lumpkin, P.A., Miami, FL, for Plaintiff.

Antonio DeJesus Morin, Jacqueline Marie Arango, James Anthony Bombulie, Akerman Senterfitt, Miami, FL, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

K. MICHAEL MOORE, Chief Judge.

THIS CAUSE is before the Court on Plaintiff Gipsy Aseff's and Defendant Catlin Specialty Insurance Company, Inc.'s cross-motions for summary judgment. The parties filed timely responses and replies. This matter is now ripe for review.

For the reasons set forth below, Defendant Catlin Specialty Insurance Company, Inc.'s Motion for Final Summary Judgment (ECF No. 34) is GRANTED.

I. BACKGROUND

This is an insurance coverage dispute brought by Plaintiff Gipsy Aseff against Defendant Catlin Specialty Insurance Company, f/k/a Wellington Specialty Insurance Company ("Catlin"), for the alleged breach of the indemnity and defense provisions of an insurance policy.

Catlin issued a commercial general liability policy (the "Policy") to Rafi Brothers, Inc. ("Rafi Brothers") for the period of November 11, 2006, to November 11, 2007. See generally Commercial General Liability Policy ("Policy") (ECF No. 34–1). The Policy covered claims arising out of bodily injury sustained in connection with Rafi Brothers' automobile dismantling operations at 205 S.E. 10th Avenue, Hialeah, Florida 33012 (the "Property"). See id. It contained a $500,000 per-occurrence aggregate limit for each claim. See id.

Specifically, under the terms of the Policy, Catlin agreed to "pay those sums that the Insured becomes legally obligated to pay as damages because of ‘bodily injury,’ " caused by an "occurrence," and to "defend the insured against any ‘suit’ seeking those damages."¹ Id. § I at ¶ 1(a)-(b). As a condition to coverage, Rafi Brothers had to notify Catlin of any "occurrence" or "suit" "as soon as practicable." See id. § IV at ¶ 2. The Policy's notice provisions read as follows:

SECTION IV—COMMERCIAL GENERAL LIABILITY CONDITIONS

2. Duties In The Event Of Occurrence, Offense, Claim Or Suit

a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:

(1) How, when and where the "occurrence" or offense took place;

(2) The names and addresses of any injured persons and witnesses; and

(3) The nature and location of any injury or damage arising out of the "occurrence" or offense.

b. If a claim is made or "suit" is brought against any insured, you must:

(1) Immediately record the specifics of the claim or "suit" and the date received, and

(2) Notify as soon as practicable.

You must see to it that we receive written notice of the claim or "suit" as soon as practicable.

* * *

Id. § IV at ¶ 2. The Policy also provided that "[n]otice of all accidents or occurrences must immediately be given to Wellington Specialty Insurance Company whether or not such accidents or occurrences appear likely to involve this policy." Id. at Endorsement 1–1–3–0904.

On January 31, 2007, a mechanic by the name of Daniel Plasencia went to the Property to repair a car. Def.'s Statement of Undisputed Facts ("Def.'s SOF") ¶ 4 (ECF No. 34). While Plasencia was removing the catalytic converter using an acetylene torch, the converter fell on the torch's hose, causing an explosion that engulfed Plasencia in flames (the "Accident"). Def.'s SOF ¶ 5. After lingering in the hospital in and out of consciousness for over four months, Plasencia succumbed to his injuries.² Id. ¶ 12. Rafi Brothers was notified of the Accident that same day, or shortly after. Id. ¶ 7.

On July 17, 2008, Pasencia's wife and the plaintiff in this action, Gypsy Aseff, sued Rafi Brothers and Accion 1 Auto Sales, Inc. ("Accion 1"), a junk car dealer that was leasing the Property at the time of the Accident, for the wrongful death of her husband (the "Wrongful Death Action"). Id. ¶¶ 3, 13. Aseff's theory of liability was based, at least in part, on Rafi Brothers' actual or constructive knowledge of property conditions that may have caused or contributed to the Accident. Id. ¶ 13.

Rafi Brothers was served with process four days later. Id. ¶ 14. Upon receipt of service, Rafi Brothers retained Don Gonzalez, Esq., as counsel. Id. ¶ 15. Neither Rafi Brothers nor Gonzalez notified Catlin of the lawsuit at this time. Id.

In prosecution of her claim, Aseff requested Rafi Brothers' liability insurance information. Rafi Brothers reached out to its insurance agent, Pan Am Assurance Agency ("Pan Am"), for a copy of the Policy, claiming it was for an "upcoming court hearing." Id. ¶ 17. Rafi Brothers, however, never explained the nature of the "upcoming court hearing." Id. In furnishing a copy of the Policy, Pan Am advised Rafi Brothers that it did not have any reported loss on record. Id. ¶ 18. Still, despite being fully aware of the Accident and Wrongful Death Action, Rafi Brothers did not notify Catlin of either at this time. Id. ¶ 19.

It was not until May 25, 2011, when Aseff's counsel reached out to Catlin to see if the insurer would indemnify and defend Rafi Brothers in connection with the lawsuit, that Catlin first received notice of the Accident and Wrongful Death Action. Id. ¶ 25. Catlin immediately contacted Pan Am, which said that it had no knowledge of either event. Catlin then followed up with Rafi Brothers, which confirmed that it had been aware of the litigation for years. Id. ¶ 27. Catlin informed Rafi Brothers that it would investigate the claim under a reservation of rights based on, among other things, breach of the Policy's notice provisions. Id.

Rafi Brothers' failure to notify Catlin of the Accident affected the insurer's ability to conduct an investigation. By the time Catlin received notice, it could no longer speak with Plasencia about the circumstances of the Accident. Id. ¶ 26. It could no longer interview Arquimedes Rafi, Sr., Rafi Brothers' principal and main contact with Accion 1, who visited the Property to collect rent and conduct inspections, and thus would have had unique insight into the Property at the time of incident, regarding Rafi Brothers' knowledge of property conditions that may have caused or contributed to the Accident. Id. It could no longer inspect and document the scene of the Accident. Id. It could no longer obtain witness statements as close in time to the Accident as possible. Id. And it could no longer preserve, obtain, and inspect the equipment involved in the Accident. Id.

Nor was Catlin able to rely on evidence adduced in the wrongful death litigation to assess its rights and liabilities. By the time Catlin received notice, neither Rafi Brothers nor Accion 1 had conducted any discovery on the issues of liability and damages. Id. ¶ 25. They had not issued written discovery requests, deposed parties or potential witnesses, sought Plasencia's medical records, or attempted to inspect or preserve—and in fact did not preserve—the equipment involved in the Accident. Id. In fact, much of the equipment involved in the Accident, including the automobile and acetylene torch, was not preserved. Id.

On June 30, 2011, Catlin denied coverage due to Rafi Brothers' failure to give timely notice of the Accident and Wrongful Death Action, and the prejudice caused to Catlin as a result.³ Id. ¶ 37.

Rafi Brothers and Aseff eventually settled the Wrongful Death Action. As part of the settlement, Rafi Brothers assigned to Aseff all claims and causes of action it may have against Catlin under the Policy. Compl. ¶¶ 37, 41. Aseff also obtained a $5,000,000 consent judgment against Rafi Brothers. Def.'s SOF ¶ 41.

On August 20, 2014, Aseff, as assignee of Rafi Brothers' rights under the Policy, commenced this action against Catlin. The three-count Complaint asserts claims for breach of contract based on Catlin's refusal to indemnify and defend Rafi Brothers in connection with the Wrongful Death Action (Count I), violation of Florida Statutes § 624.155 (Count II), and common law bad faith (Count III). See Compl. ¶¶ 42–63 (ECF No. 1). This Court, however, abated Counts II and III pending resolution of the coverage dispute. (ECF No. 13). The parties now cross-move for summary judgment on Aseff's breach of contract claim.

II. 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 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) ; see also Fed.R.Civ.P. 56. An issue of fact is "material" if it is a legal element of the claim under the applicable substantive law which might affect the outcome of the case. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997). An issue of fact is "genuine" if the record, taken as a whole, could lead a rational trier of fact to find for the nonmoving party. Id.

The moving party has the initial burden of showing the absence of a genuine issue as to any material fact. Id. (citation omitted). In deciding whether the moving party has met this burden, the court must view the movant's evidence and all factual inferences arising from it in the light most favorable to the non-moving party. Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115 (11th Cir.1993). Once the moving party satisfies its initial burden, the burden shifts to the non-moving party to come forward with evidence showing a genuine issue of material fact that precludes summary judgment. Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir.1991) ; see also Fed.R.Civ.P. 56(e). "The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be...