Capitol Specialty Ins. Corp. v. Royal Crane, LLC

• Decision Date: 26 February 2015
• Docket Number: CASE NO. 14-CIV-60815-BLOOM/Valle
• Court: U.S. District Court — Southern District of Florida
• Parties: CAPITOL SPECIALTY INSURANCE CORPORATION, a foreign corporation, Plaintiff, v. ROYAL CRANE, LLC, ALL FLORIDA TREE & LANDSCAPE, INC. and RAE FRANKS as Personal Representative of the Estate of JORGE CARRERA ZARATE, Defendants.

CAPITOL SPECIALTY INSURANCE CORPORATION,a foreign corporation, Plaintiff, v. ROYAL CRANE, LLC, ALL FLORIDA TREE & LANDSCAPE, INC.and RAE FRANKS as Personal Representative of the Estate ofJORGE CARRERA ZARATE, Defendants.

CASE NO. 14-CIV-60815-BLOOM/Valle

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA

February 26, 2015

ORDER ON DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

THIS MATTER is before the Court upon Plaintiff Capitol Specialty Insurance Company's ("Plaintiff" or "Capitol") Motion for Summary Judgment, ECF No. [39] (Capitol's "Motion"), and Defendant Royal Crane, LLC's ("Royal Crane") Cross-Motion for Summary Judgment, ECF No. [41] (Royal Crane's "Motion"). The Court has reviewed the Motions, all supporting and opposing filings and submissions, and the record in the case. For the reasons that follow, Royal Crane's Motion is DENIED, and Capitol's Motion is GRANTED.

I. MATERIAL FACTS

Capitol initiated these proceedings by filing its Complaint, ECF No. [1], against Royal Crane and Defendants All Florida Tree & Landscape, Inc. ("All Florida Tree") and Rae Franks, as Personal Representative of the Estate of Jorge Carrera Zarate (the "Zarate Estate"). Capitol seeks relief under Fla. Stat. Ch. 86 as to an insurance policy it issued to All Florida Tree declaring that it has neither a duty to defend nor indemnify any party with respect to a wrongfuldeath action brought by the Zarate Estate against Royal Crane in the Circuit Court of the 17th Judicial Circuit in and for Broward County, Florida (the "Circuit Court") captioned Rae Franks, as Personal Representative of the Estate of Jorge Carrera Zarate v. Royal Crane, LLC, Case No. 13-022197 (the "Underlying Action").¹ Id.

In August, 2012, All Florida Tree was retained by a general contractor to remove a kapok tree at a residential job site in Broward County, Florida. ECF No. [40] (Pl. Stat. Facts) ¶ 1; ECF No. [42] (Def. Stat. Facts) ¶ 2; ECF No. [31-1] (Am. Compl. in Underlying Action) ¶¶ 16-17). The project was permitted under a licensed general contractor by the City of Fort Lauderdale, Permit No. 12070390. Pl. Stat. Facts ¶ 2; see ECF No. [38-1] (City of Ft. Lauderdale Permit). At that time, All Florida Tree contracted with Royal Crane for lease of a crane to be used in the course of the tree removal project. Pl. Stat. Facts ¶ 3; Def. Stat. Facts ¶ 4; Am. Compl. in Underlying Action ¶¶ 18-21; ECF No. [1-3] (Third Party Compl. in Underlying Action) ¶ 12. All Florida Tree had performed similar tree removals in the past and frequently hired Royal Crane to provide the necessary machinery. Def. Stat. Facts ¶ 3.

In connection with the tree removal project, on or about August 21, 2012, All Florida Tree and Royal Crane entered into an Equipment Service Agreement. ECF No. [1-4] (Equipment Service Agreement). Those parties regularly entered into equipment service agreements in connection with similar projects. Def. Stat. Facts ¶ 6. The Equipment Service Agreement included an indemnification provision, under which, in relevant part, All Florida Tree agreed to indemnify Royal Crane from claims for death or personal injury arising from All Florida Tree's work. Equipment Service Agreement at p. 2 § 1.

Jorge Carrera Zarate ("Zarate") was employed by All Florida Tree as a tree trimmer. Pl. Stat. Facts ¶¶ 4-5; Def. Stat. Facts ¶ 8. In the course of performing the tree removal work on August 21, 2012, Zarate suffered fatal injuries when a sling on the crane owned and operated by Royal Crane made contact with an energized power line. Pl. Stat. Facts ¶ 9; Def. Stat. Facts ¶ 9; Am. Compl. in Underlying Action ¶¶ 28, 31.

At the time of his death, Zarate was the statutory and putative employee of All Florida Tree. Pl. Stat. Facts ¶ 5; Def. Stat. Facts ¶ 8. Federal withholdings, social security withholdings, Medicare withholdings, and workers' compensation withholdings were all deducted from the paychecks issued to Zarate by All Florida Tree. ECF No. [38-2] (Zarate Employee Pay Records). Zarate signed and completed an Employment Eligibility Application, Form I-9, as a part of his employment application with All Florida Tree. ECF No. [38-6] (Zarate Form I-9). All Florida Tree issued protective equipment and a company shirt to Zarate for mandatory use during working hours. See ECF No. [38-4] (Safety Equipment Form); ECF No. [38-5] (Zarate Estate Ans. to Interrog., No. 1 (December 5, 2014)). Zarate was identified as an employee of All Florida Tree on the workers' compensation injury report for this incident filed with the Florida Department of Financial Services, Division of Workers Compensation. ECF No. [38-3] (First Report of Injury or Illness).

After Zarate's death, the Zarate Estate obtained workers' compensation benefits under a policy issued to Zarate's employer, All Florida Tree. Pl. Stat. Facts ¶ 11. As of November 15, 2014, Ascendant Claims Services has asserted a lien for payments made to or on behalf of the Zarate Estate in the amount of $167,893.51. Zarate Estate Ans. to Interrog., No. 2.

On October 2, 2013, the Zarate Estate filed a wrongful death action against Royal Crane (the Underlying Action). See ECF No. [1-2] (Initial Compl. in Underlying Action). Royal Cranethen sued All Florida Tree. Third Party Compl. in Underlying Action ¶¶ 3-7. The Third Party Complaint asserts three claims, for common law (Count I) and contractual (Count II) indemnification (the latter in respect of the Equipment Service Agreement), and breach of contract (Count III, also with respect to the Equipment Service Agreement) alleging that Zarate's damages resulted from All Florida Tree's failure to provide competent and qualified personnel to direct the operations of the equipment and conduct such operations on the tree removal project in accordance with applicable standards. Id. ¶¶ 10, 12, 14, 16. The Zarate Estate later amended its complaint to assert a claim against All Florida Tree for violation of Fla. Stat. § 440.11(1)(b), as well as a culpable negligence claim against All Florida Tree's owner, Alan McPherson. Am. Compl. in Underlying Action ¶¶ 98-115. The Section 440.11 count alleges that All Florida Tree breached its duty to "provide a reasonably safe working environment," and to "ensure that its jobsites were free from recognized hazards that were causing or were likely to cause death or serious physical harm" by intentionally subjecting Zarate to a "known inherently dangerous condition which was substantially and virtually certain to result in serious death or injury." Id. ¶¶ 100-104.

Capitol issued a commercial general liability policy to All Florida Tree, which was effective on August 21, 2012. See ECF No. [1-5] (Policy). All Florida Tree is a named insured under the Policy. Id. The Policy contains an endorsement, titled "Third-Party-Over Action Exclusion," which provides as follows:

A. Exclusion e. under Paragraph 2., Exclusions of Section I - Coverage A - Bodily Injury and Property Damage Liability is replaced by the following:

2. Exclusions

This insurance does not apply to:

e. Employer's Liability

Bodily injury, personal injury, or advertising injury to:

(1) An employee of any insured arising out of and in the course of employment,

(2) The spouse, child, parent, brother or sister of that employee as a. consequence of (1) above.

This exclusion applies:

(1) Whether an insured may be liable as an employer or in any other capacity;

(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury; and

(3) To any insured against whom a claim is made or suit is brought for such bodily injury, personal injury or advertising injury, whether by or on behalf of an employee of that insured or any other insured.

For the purpose of this exclusion the term "employee" includes loaned, rented, leased or temporary employees, as well as persons who qualify as borrowed servants or employees or persons who are or may be deemed employees of any insured under the doctrines of borrowed servant, borrowed employee, respondent superior or any similar doctrine, or for whom any insured may be held liable as an employer:

Policy at p. 54.

The Policy also contains a "Contractual Liability" exclusion, which provides, in relevant part, that "[t]his insurance does not apply to . . . '[b]odily injury' or 'property damage' for which the insured is obligated to pay damages by reason of the assumption of liability in a contract or agreement." Policy at p. 24, § I.2.b. The contractual liability exclusion, however, "does not apply to liability for damages . . . assumed in a contract or agreement that is an 'insured contract,'" which includes any part of a "contract or agreement pertaining to [the insured's] business . . . under which [the insured] assume[s] the tort liability of another party to pay for 'bodily injury' or 'property damage' to a third person or organization" caused by the insured. Policy at p. 24, § I.2.b; p. 22 Amendment of Insured Contract Definition ¶ 9.f.

All Florida Tree tendered the claim in the Underlying Action to Capitol for defense, and Capitol has defended All Florida Tree in the Underlying Action while pursuing this declaratory action. All Florida Tree did not enter an appearance in this action, and has been defaulted. ECFNo. [19]. While the Zarate Estate has appeared in this action, it has not filed a response to either of the cross-motions for summary judgment.

II. SUMMARY JUDGMENT STANDARD

A party may obtain summary judgment "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The parties may support their positions by citation to the record, including inter alia, depositions, documents, affidavits, or declarations. Fed. R. Civ. P. 56(c). An issue is genuine if "a reasonable trier of fact could return judgment for the non-moving party." Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (quoting Anderson v....