Commerce & Indus. Ins. Co. v. Sandi Constr. Inc., Case No. 10-cv-24544-KMM

• Court: U.S. District Court — Southern District of Florida
• Writing for the Court: K. MICHAEL MOORE
• Parties: COMMERCE & INDUSTRY INSURANCE CO., Plaintiff, v. SANDI CONSTRUCTION, INC.; EPOCH PROPERTIES, INC.; CL&B CONTRACTING, INC.; and MARIA ELENA SERVELLON TEJEDA, as Personal Representative of the Estate of Jose Tejeda; Defendants.
• Decision Date: 06 October 2011
• Docket Number: Case No. 10-cv-24544-KMM

COMMERCE & INDUSTRY INSURANCE CO.,
Plaintiff,
v.
SANDI CONSTRUCTION, INC.;
EPOCH PROPERTIES, INC.;
CL&B CONTRACTING, INC.; and MARIA ELENA SERVELLON TEJEDA, as
Personal Representative of the Estate of Jose Tejeda; Defendants.

Case No. 10-cv-24544-KMM

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA

Date: October 6, 2011

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT. DENYING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT IN THE ALTERNATIVE. DENYING DEFENDANT EPOCH PROPERTIES INC .'s CROSS MOTION FOR SUMMARY JUDGMENT. AND DISMISSING DEFENDANT EPOCH PROPERTIES INC.'s COUNTERCLAIM

THIS CAUSE came before the Court upon Plaintiff's Motion for Summary Judgment (ECF No. 64), Plaintiff's Motion for Summary Judgment in the Alternative (ECF No. 67), and Defendant Epoch Properties' Cross Motion for Summary Judgment (ECF No. 66). These Motions are now fully briefed and ripe for review.

UPON CONSIDERATION of the Motions, the pertinent portions of the record, and being otherwise fully advised in the premises, the Court enters the following Order.

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I. BACKGROUND¹

In this case, Plaintiff, Commerce and Industry Insurance Co. ("C&I"), seeks a declaratory judgment regarding its rights, duties, and obligations under a Workers['] Compensation and Employer[']s Liability Insurance Policy it issued to Defendant Sandi Construction ("Sandi"). This dispute stems from an accident in which one of Sandi's employees, Miguel Tejada, was killed on a job site which involved Sandi, as well as Defendants Epoch Properties Inc. ("Epoch"), and CL&B Contracting ("CL&B"). PL Mot. Summ. J. Stmnt. Facts ¶ 7. Miguel Tejada, an alleged illegal immigrant, was rendered unconscious by a fall from a ladder at the job site. Id. Co-workers, who were also alleged to be illegal immigrants, did not call for medical assistance, and delayed taking Miguel Tejada to the hospital for approximately 2.5 hours. Id. As a result of the injury he suffered during the fall, Miguel Tejada died three months later on March 13, 2006. Id.

Upon investigation by authorities, it became apparent that Sandi had engaged in a large scale fraud which involved falsifying the number of workers it employed in order to procure less costly workers' compensation insurance, and in turn obtain construction contracts based in part on its ability to provide proof of indemnification to general contractors. Id. ¶ 10. Investigation by the U.S. Attorney's Office revealed that while Sandi reported to C&I and First Commercial Insurance Company that it employed six individuals, it in fact employed hundreds of workers, and provided them to approximately 186 contractors in Florida. Indictment (ECF No. 64-6). A federal grand jury indicted Enrique Guevara, the accountant for Sandi, along with insurance brokers Erick Brandon and Alex Cordero, on counts of mail fraud, conspiracy to commit mail fraud, conspiracy

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to impede and impair the Internal Revenue Service, and aiding the filing of false tax returns to commit mail fraud. Id. Although not indicted, Marco Sandi, the owner of Sandi Construction, is listed in the indictment as a co-conspirator. Id.

A suit by Miguel Tejada's wife, Maria Elena Servellon Tejeda ("Tejeda"), as representative of his estate, is currently pending in the Fifteenth Judicial Circuit in Palm Beach County. See Compl. Palm Beach Cnty. (ECF No. 64-3). As a result of that suit, C&I filed a Complaint (ECF No. 1) in the instant suit on December 20, 2010, seeking a declaration of its rights and responsibilities pursuant to a Workers['] Compensation and Employer[']s Liability Insurance Policy it issued to Sandi Construction. The Complaint names as Defendants, Sandi, Epoch, CL&B, and Tejeda, and properly alleges subject matter jurisdiction according to 28 U.S.C. §1332.² C&I now motions this Court for summary judgment, as well as summary judgment in the alternative. Epoch has also submitted a cross motion for summary judgment.

II. STANDARD OF REVIEW

Summary judgment may be entered only where there is no genuine issue of material fact. Twiss v. Kury, 25 F.3d 1551, 1554 (11th Cir. 1994). The moving party has the burden of meeting this exacting standard. Adickes v. S.H. Kress & Co., 398 U.S. 144,157 (1970).

A party must support its assertion that there is no genuine issue of material fact by "citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . . , admissions, interrogatory answers, or other materials."

Ritchey v. S. Nuclear Operating Co., No. 10-11962, 2011 WL 1490358, at *1 (11th Cir. Apr. 20,

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2011) (quoting Fed. R. Civ. P. 56(c)(1)). 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.

In applying this standard, the district court must view the evidence and all factual inferences therefrom in the light most favorable to the party opposing the motion. Id. "The mere existence of a scintilla of evidence in support of the [nonmovant's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmovant]." Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 252 (1986).

III. ANALYSIS

A C&I's Motion for Summary Judgment

The issue which this Court must decide is whether Florida Statutes § 440 ("section 440"), as interpreted in Perkins v. Perkins Drywall, 615 So. 2d 187 (Fla. 4th Dist. Ct. App. 2007) and Bend v. Shamrock Servs., 59 So. 3d 153,161 (Fla. 1st Dist. Ct. App. 2011), applies to employer liability insurance which is part of a broad policy providing workers' compensation insurance, employer's liability insurance, and insurance for operations in "other states." Ins. Policy (ECF No. 64-2). The Court concludes that the remedial scheme of section 440 is not applicable to the employer's liability insurance in question.

C&I issued a "Workers['] Compensation and...