Bradfield v. Mid-Continent Cas. Co.

• Decision Date: 10 November 2015
• Docket Number: Case No. 5:13-cv-222-Oc-10PRL
• Citation: 143 F.Supp.3d 1215
• Parties: Joseph Bradfield, and Patricia Bradfield, Plaintiffs, v. Mid-Continent Casualty Company, a foreign corporation, Defendant.
• Court: U.S. District Court — Middle District of Florida

143 F.Supp.3d 1215

Joseph Bradfield, and Patricia Bradfield, Plaintiffs,

v.Mid-Continent Casualty Company, a foreign corporation, Defendant.

Case No. 5:13-cv-222-Oc-10PRL

United States District Court, M.D. Florida, Ocala Division.

Signed November 10, 2015

Edward P. Jordan, II, Edward P. Jordan, II, PA Law Office, Clermont, FL, Stephen A. Scott, Stephen A. Scott, PA, Gainesville, FL, for Plaintiffs.

Ronald L. Kammer, Melissa A. Gillinov, Hinshaw & Culbertson, LLP, Coral Gables, FL, James H. Wyman, Hinshaw & Culbertson, LLP, Miami, FL, for Defendants.

ORDER GRANTING SUMMARY JUDGMENT

WM. TERRELL HODGES, UNITED STATES DISTRICT JUDGE

Joseph and Patricia Bradfield are the owners of a custom residential home they contracted to have constructed for them in Lake County, Florida. By all accounts, the home is a model of poor workmanship, poor materials and poor construction that began on day one of the project. There can be no dispute about that.

The Bradfield Home was built by Horgo Signature Homes, Inc. ("Horgo Signature"), and Winfree Homes, Inc. ("Winfree"), two Florida corporations and their various sub-contractors. Also lurking in the background is another Florida corporation, Horgo Enterprises, Inc. ("Horgo Enterprises").

In August, 2012, the Bradfields sued Horgo Signature and Winfree in state court.¹ Mid-Continent Casualty Company ("Mid-Continent") had insured Winfree under a Commercial General Liability Insurance Policy. It had also insured Horgo Enterprises but had never insured Horgo Signature . When both Horgo Signature and Winfree, the named defendants in the state court action, asked Mid-Continent to undertake their defense in that case, Mid-Continent refused to do so and denied coverage.

In March 2013, the parties in the state court action settled that case by entering into a Cob l entz agreement.² A Coblentzagreement, as in the context of this case, relates to a situation in which the insurance carrier for a general contractor declines coverage of a claim brought against the contractor by the home owner. The contractor and the home owner then agree to resolve their dispute by negotiating a consent judgment to be entered in the underlying case in favor of the home owner and against the contractor. This is then accompanied by an assignment to the home owner of the contractor's claim against its own insurance carrier for failure to defend the case and indemnify the owner's claim; and, in exchange for that assignment, the home owner releases the contractor from any personal liability under the consent judgment. The home owner, as an assignee standing in the shoes of the contractor, can then sue the contractor's insurance company in an attempt to collect on the judgment. Coblentz v. American Surety Co. , 416 F.2d 1059, 1062–63 (5th Cir.1969). See also Mid–Continent Cas. Co. v. Am. Pride Bldg. Co., LLC , 601 F.3d 1143, 1147 n. 2 (11th Cir.2010) ; Rodriguez v. Sec. Nat'l Ins. Co. , 138 So.3d 520, 521 n. 3 (Fla. 3d Dist.Ct.App.2014) ; Perera v. U.S. Fid. & Guar. Co. , 35 So.3d 893, 903 (Fla.2010). The Supreme Court of Florida recognized Coblentz agreements in 1984. Steil v. Florida Physicians' Ins. Reciprocal , 448 So.2d 489 (Fla.1984).

This case, then, is the resulting Coblentz litigation brought by the Bradfields, as plaintiffs against Mid-Continent as defendant and as the alleged insurer of Horgo Signature and Winfree. The object of the suit—the relief requested—is to recover the sum of $696,108.00, the amount of the consent judgment entered in the state court representing the Bradfield's claim of damages for the poor construction of their home.

Presently pending are three motions for summary judgment (Docs. 28, 63, 64), four motions to strike expert testimony (Docs. 68, 83, 88, 130), and four procedural motions (Docs. 25, 81, 106, 146). Each of the motions has been fully briefed, and is ripe for disposition.

Mid-Continent has successfully demonstrated that there is no genuine issue of material fact with regard to its defensive contentions (1) that the insurance coverage it provided to Horgo Enterprises and Winfree did not extend to Horgo Signature as a claimed additional insured; (2) that the specific items of damage claimed by the Bradfields either were not covered or were excluded by the policies it issued to Winfree (and, for that matter, those policies it issued to Horgo Enterprises); and/or (3) that the consent judgment entered in state court pursuant to the Coblentz agreement was not reasonable and/or was the result of collusion. Summary judgment will therefore be granted to Mid-Continent and denied to the Bradfields. The remaining motions will be denied as moot.³

Undisputed Material Facts

I. Construction of the Bradfield Home

On August 3, 2005, the Bradfields entered into a Contract for Sale and Purchase with Horgo Signature (the "Home Contract") for construction of a single-family residence located in Lake County, Florida at a price of $760,560, consisting of $150,000 for the land, and $610,560 for construction of the house (the "Bradfield Home"). (Doc. 25-1, Ex. A). The Bradfields contracted solely with Horgo Signature, and worked directly with Richard Higo (President and Project Manager of Horgo Signature) and Philip Horvath (employee of Horgo Signature). The Bradfields did not enter into any contracts with Winfree. The Bradfields both testified at their depositions that they never had any dealings with Winfree, and did not even know Winfree existed until litigation commenced. (Doc. 64-8, pp. 42-43, Doc. 122-13).

On September 22, 2005, Horgo Signature, through Mr. Higo, applied for and obtained a building permit from the Lake County Building Department for construction of the Bradfield Home. (Doc. 25-1, Ex. D). Winfree was listed on the permit application as the contractor.⁴ The permit was issued on November 1, 2005, and expressly stated that it would become null and void if a satisfactory inspection was not completed within six months. (Id. ). Such an inspection did not occur during that time period. For reasons undisclosed on the record, Mr. Higo did not apply for a second building permit until December 3, 2006 (Id. ). While this permit application is signed by Mr. Higo as "contractor," the application clearly lists Winfree as the contractor.

Winfree was the residential general contractor for the Bradfield Home and, as between Winfree and Horgo Signature, Winfree was responsible for building most of the segments of construction of the home. According to Mr. Higo, Winfree performed all of the concrete work "from zero to framing," including the foundation, floor, block work, lintel, and strapping to the second floor. (Doc. 63-1, pp. 57, 63-64). However, it appears from the record that most, if not all, of Winfree's work was actually performed by various specialty subcontractors. (Doc. 75, pp. 34, 53, 77-78, 80-81, 99, 105, 122-23). There is also evidence that Mr. Higo, through either Horgo Enterprises or Horgo Signature, hired, supervised, and paid for all subcontractors. (Id. , pp. 34, 53). Winfree and Horgo Signature established this loose relationship also by oral agreements. The two companies did not execute any mutual written contracts concerning the Bradfield Home. (Doc. 63-3, pp. 46-47).

According to Horgo Signature, Winfree, and the Bradfields, the home was substantially completed on or before May 20, 2006. This included the monolithic slab; block walls and lintels; all roofing; framing of the interior and exterior walls, porches and stairs; installation of windows and doors; installation of drywall; electrical rough-in; plumbing rough-in; and HVAC systems rough-ins. However, the Lake County Building Records show that the "rough" insulation inspection was not conducted until June 29, 2006, the framing failed three inspections in June 2006, the house was not authorized for "prepower" until December 5, 2006, and did not pass the electric "final inspection" on December 11, 2006 because the "trim out [was] not complete." (Doc. 53, Exs. I, K).⁵ In addition, the building permit for the Bradfield Home was renewed on December 5, 2006 "at 10% for finals only." Moreover, Mr. Winfree candidly testified at deposition that: (1) he was not sure when all of the work was completed although he thinks most of the framing would have been completed by April 27, 2006; (2) the grading work was performed between August and November 2006; and (3) no one ever told him that the framing of the interior and exterior walls, porches, and stairs were completed prior to May 20, 2006 (Doc. 75, pp. 62-67, 70, 81, 125-126, 164).

In any event, the house passed inspection by December 13, 2006, when the Lake County, Florida Building Department issued its Certificate of Occupancy (Doc. 63-5). The Certificate of Occupancy lists the owner as Richard M. Higo and the contractor as Winfree. (Id. ). After the Certificate was issued, the Bradfields paid the remaining amount due on the Home Contract, and moved into the home just before Christmas of 2006.

II. Defects in the Construction of the Bradfield Home

Within 30 days of moving in, contractors were engaged to recaulk the windows, and a portion of the garage ceiling collapsed and was replaced for the first of three times. Dr. Bradfield also first noticed water intrusion from the balcony when the garage ceiling was torn out in 2007.

Approximately six months after moving in, on or about June 2007, the Bradfields discovered additional water damage in the garage and dining room. This leak was caused by the doors out to the balcony off the bedroom above the garage. Horgo Signature performed the repairs which encompassed removing the drywall in both the garage and dining room, replacing the hardwood flooring, installing a larger flashing in the wood frame, and removal of mold. (Doc. 64-1, pp. 85-86).

Within a year of moving in, Dr. Bradfield also noticed the summer kitchen was constructed with the wrong wood and was improperly sealed. He also observed that the front porch sloped toward the house which...