BITCO Nat'l Ins. Co. v. Old Dominion Ins. Co.

• Decision Date: 30 March 2019
• Docket Number: Case No. 3:17cv326/MCR/CJK,Case No. 3:17cv262/MCR/CJK
• Citation: 379 F.Supp.3d 1230
• Parties: BITCO NATIONAL INSURANCE COMPANY, as subrogee of A.E. New, Jr., Inc., Plaintiff, v. OLD DOMINION INSURANCE COMPANY, et al., Defendants. BITCO National Insurance Company, as subrogee of A.E. New, Jr., Inc., Plaintiff, v. Southern-Owners Insurance Company and National Trust Insurance Company, Defendants.
• Court: U.S. District Court — Northern District of Florida

379 F.Supp.3d 1230

BITCO NATIONAL INSURANCE COMPANY, as subrogee of A.E. New, Jr., Inc., Plaintiff,

v.OLD DOMINION INSURANCE COMPANY, et al., Defendants.

BITCO National Insurance Company, as subrogee of A.E. New, Jr., Inc., Plaintiff,

v.Southern-Owners Insurance Company and National Trust Insurance Company, Defendants.

Case No. 3:17cv262/MCR/CJK

Case No. 3:17cv326/MCR/CJK

United States District Court, N.D. Florida, Pensacola Division.

Signed March 30, 2019

Jonathan Blake Hunter, Kathleen Johnson Maus, Tallahassee, FL, Francis X Rapprich, III, Wright & Casey PA, New Smyrna Beach, FL, for Plaintiff.

Steven Gary Schwartz, Schwartz Law Group, Boca Raton, FL, Gary Scott Kull, Katrine Leana Hyde, Kennedys CMK LLC, Basking Ridge, NJ, Neil Evan Bayer, Kennedys Americas LLP, Miami, FL, Gregory Mark Shoemaker, Wade Palmer & Shoemaker PA, Pensacola, FL, Michael Adam Packer, Marshall Dennehey Etc, Fort Lauderdale, FL, for Defendants.

ORDER

M. CASEY RODGERS, UNITED STATES DISTRICT JUDGE

This matter is before the Court on six motions: (1)BITCO National Insurance Company, as subrogee of A.E. New, Jr., Inc.'s ("BITCO")motion for summary judgment on liability against Old Dominion Insurance Company ("Old Dominion"), Starr Indemnity & Liability Company ("Starr"), and Crum & Forster Specialty Insurance Company ("Crum"), ECF No. 54;(2) BITCO's motion for summary judgment on liability against Southern-Owners Insurance Company ("Southern-Owners") and National Trust Insurance Company ("National Trust"), ECF No. 57;(3) Southern-Owners' motion for summary judgment against BITCO, ECF No. 66;(4) National Trust's motion for summary judgment on liability against BITCO, ECF No. 88;(5) Crum's motion for summary judgment against BITCO, ECF No. 100; and (6) BITCO's motion to strike the affidavits filed by Southern-Owners, or in the alternative, to file a sur-reply, ECF No. 95.¹The Court's rulings are set forth below.

I.Background

This consolidated action involves an insurance coverage dispute over the obligation, if any, of various insurance companies to defend and indemnify BITCO, as subrogee of A.E. New, Jr., Inc.("AE New"), a general contractor, against state court claims for property damage due to allegedly defective work performed by their insureds, who served as subcontractors for the construction of the Central Water Reclamation Facility project ("the Project") for the Emerald Coast Utilities Authority ("ECUA") in Pensacola, Florida.²

In February 2009, ECUA hired AE New as general contractor for the Project.AE New subcontracted various portions of the construction work to Area Glass, Inc.("Area Glass") and West Coast Metal Roofing & Construction, LLC("West Coast Metal").³The terms of their respective subcontracts required each subcontractor to, inter alia , indemnify AE New for all damages claims "arising out of or resulting from" the subcontractor's "negligent acts or omissions" in the performance of its work on the Project.⁴The subcontracts also required each subcontractor to maintain commercial general liability insurance naming AE New as an additional insured.⁵

As per the subcontracts, both Area Glass and West Coast Metal obtained commercial general liability policies ("the CGL policies") with the requisite additional insured endorsements ("Endorsements").⁶In particular, Area Glass was insured by Southern-Owners from October 28, 2008 through October 1, 2010, and by Old Dominion from October 1, 2010 through September 12, 2012.West Coast Metal was insured by Crum from March 26, 2009 through December 1, 2010.The Endorsements provide, in relevant part, that "[a] person or organization is an Additional Insured, only with respect to liability arising out of ‘your work’ for that Additional Insured by or for you ... [i]f required in a written contract."SeeSouthern-Owners Policy, ECFNo. 42-14at 43.The CGL policies define "your work" as "(1)[w]ork of operations performed by your or on your behalf; and (2)[m]aterials, parts or equipment furnished in connection with such work or operations."Seeid. at 42.For purposes of the instant motions, the Court assumes that AE New is an additional insured under Area Glass and West Coast Metal's CGL policies, pursuant to the subcontracts and Endorsements.

After construction at the Project was complete, ECUA retained an engineering firm to inspect the building.The engineering firm issued two reports identifying a number of construction defects and deficiencies on the Project.SeeEngineering Reports, ECF No. 1-3at 140-204.ECUA then served a notice of claim on AE New, pursuant to Florida Statutes 558.004.⁷Seeid. at 138-39, 142.The notice of claim advised AE New of the discovery of the purportedly defective work set forth in the engineering firm's reports and provided AE New an opportunity to inspect and cure the defects.Seeid.

At some point thereafter, AE New filed a lawsuit against ECUA and two other defendants in the Circuit Court for Escambia County, Florida, raising breach of contract claims related to their contract for the Project's construction.ECUA responded with an Amended Answer and Counterclaim ("the state court counterclaim"), in which it asserted claims of breach of contract and negligence against AE New based on the unresolved construction defects identified in the engineering reports.ECUA alleged that the defects had caused damage to various components of the Project and to other property.

AE New concluded that some of the allegedly defective work at the Project was performed by Area Glass and West Coast Metal.⁸Thereafter, AE New sent multiple letters to the two subcontractors and their insurers, invoking its rights as an additional insured under the CGL policies and demanding a defense for the state court counterclaims.AE New, represented by attorneys provided by its own liability insurer, BITCO, is defending against the state court counterclaims and has also asserted third-party claims against Area Glass, West Coast Metal, and other subcontractors, seeking to recover from them any amounts for which AE New might be held liable.The current status of the state court lawsuit is unclear from the parties' filings in this federal case.

Two actions have been filed and consolidated for adjudication by this Court.First, on April 24, 2017, BITCO filed an action against Old Dominion, Crum, and Starr, seeking a declaration that they owed a duty to defend AE New against the state court counterclaim, pursuant to the terms of Area Glass and West Coast Metal's CGL policies, and alleging breach of contract based on the insurance companies' refusal to provide the requisite defense.Second, on May 8, 2017, BITCO filed an action against National Trust and Southern-Owners, alleging the same claims and seeking the same relief with respect to the additional insured provisions of the CGL policies for Lowery Industrial and Area Glass, respectively.Since that time, BITCO has voluntarily dismissed with prejudice its claims against Starr and National Trust.SeeECF Nos. 70; 114.Thus, only the claims against Old Dominion, Crum, and Southern-Owners remain.

BITCO argues that it is entitled to summary judgment against each of the remaining defendant insurance companies because the allegations in the state court counterclaim triggered their duty to defend AE New, which they all refused to do.Each defendant separately opposes BITCO's motion and all but one defendant, Old Dominion, have moved for summary judgment in their own favor regarding the duty to defend.

II.Legal Standard

A district court applies the same legal standards when ruling on cross-motions for summary judgment as it does when only one party files a motion.Certain Underwriters at Lloyds, London Subscribing to Policy No. SA 10092-11581 v. Waveblast Watersports, Inc. , 80 F.Supp.3d 1311, 1316(S.D. Fla.2015)."Cross-motions may, however, be probative of the absence of a factual dispute where they reflect general agreement by the parties as to the controlling legal theories and material facts."Id. (citing United States v. Oakley , 744 F.2d 1553, 1555-56(11th Cir.1984).

Summary judgment is appropriate where there are no genuine disputes of material fact and the moving party is entitled to judgment as a matter of law.Fed. R. Civ. P. 56;see alsoCelotex Corp. v. Catrett , 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265(1986).A fact is "material" if, under the applicable substantive law, it might affect the outcome of the case.Hickson Corp. v. N. Crossarm Co. , 357 F.3d 1256, 1259-60(11th Cir.2004).A dispute of fact is "genuine" if "the evidence is such that 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).The burden of demonstrating the absence of a genuine dispute of material fact rests with the moving party.Celotex , 477 U.S. at 323, 106 S.Ct. 2548.In determining whether the moving party has carried its burden, a court must view the evidence and factual inferences drawn therefrom in the light most favorable to the non-moving party.Liberty Lobby , 477 U.S. at 255, 106 S.Ct. 2505;Allen v. Tyson Foods , 121 F.3d 642, 646(11th Cir.1997)."Summary judgment is appropriate in declaratory judgment actions seeking a declaration of coverage when the insurer's duty, if any, rests solely on the applicability of the insurance policy, the construction and effect of which is a matter of law."Northland Cas. Co. v. HBE Corp. , 160 F.Supp.2d 1348, 1358(M.D. Fla.2001).

III.Discussion⁹

The question of whether the defendant insurance companies owe a defense to AE New turns on whether the allegations in the state court counterclaim bring that action within the scope of the CGL policies' coverage.SeeJones v. Florida Ins. Guar. Ass'n, Inc. , 908 So.2d 435, 443(Fla.2005);Lime Tree Village Cmty. Club Ass'n, Inc. v. State Farm Gen. Ins. Co. , 980 F.2d 1402, 1405(11th Cir.1993).Under Florida law, "the general...