Commodore Plaza Condo. Ass'n, Inc. v. QBE Ins. Corp.
| Decision Date | 14 January 2013 |
| Docket Number | CASE NO. 12-22534-CIV-SEITZ/SIMONTON |
| Parties | COMMODORE PLAZA CONDOMINIUM ASSOCIATION, INC., Plaintiff, v. QBE INSURANCE CORPORATION and TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICA, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS MATTER is before the Court on Travelers Casualty and Surety Company of America's Motion for Final Summary Judgment [DE-18]. Plaintiff's complaint alleges a single claim against Defendant Travelers Casualty and Surety Company of America (Travelers) for breach of contract based on Travelers' failure to defend Plaintiff in a lawsuit filed against Plaintiff. Travelers moves for summary judgment declaring that it had no duty to defend under the relevant insurance policy. Because all of the claims in the underlying lawsuit are covered by a policy exclusion, Travelers is entitled to summary judgment.
Travelers issued an insurance contract to Plaintiff, which provided Non-Profit Management and Organization Liability insurance to Plaintiff, which is a Directors & Officers (D&O) policy, for the period from June 20, 2006 through June 20, 2008. On June 18, 2007, a Commodore Plaza townhouse owner filed a complaint in state court against Plaintiff (theUnderlying Action). The Underlying Action is styled Neil Backer, Trustee of the Mildred Bacher Revocable Trust v. Commodore Plaza Condominium Association, Inc., Case No. 0718521 CA 15. In accordance with the terms of the Travelers' D&O Policy (the Policy), Plaintiff notified Travelers of the complaint in the Underlying Action and requested that Travelers defend the Underlying Action. On July 26, 2007, Travelers denied coverage under the Policy and refused to provide a defense for Plaintiff.
On December 21, 2010, an amended complaint was filed against Plaintiff in the Underlying Action. Plaintiff notified Travelers of the amended complaint and again requested that Travelers defend Plaintiff in the Underlying Action. On April 29,2011, Travelers denied coverage and refused to provide Plaintiff with a defense in the Underlying Action. Plaintiff subsequently filed this action for breach of contract against Travelers.1
The Policy issued by Travelers contains the following exclusion from coverage:
Section IV- EXCLUSIONS
The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any of the Insureds.
1. for or arising out of any damage, destruction, loss of use or deterioration of any tangible property including, without limitation, construction defects, whether or not as a result of faulty or incorrect design or architectural plans, improper soil testing inadequate or insufficient protection from soil and/or ground water movement, soil subsidence, mold, toxic mold, spores, mildew, fungus or wet or dry rot, or the supervision of actual construction, manufacturing or assembly of any tangible property ...
See DE-18-4.
The Amended Complaint in the Underlying Action [DE-18-3] alleges claims for (1) negligence; (2) violation of § 553.84, Florida Statutes; (3) breach of contract; and (4) breach of fiduciary duty. More specifically, the amended complaint in the Underlying Action alleges that the plaintiff Trust (Bacher) is an owner of a townhouse within the Commodore Plaza Condominium Association (Plaintiff). On October 24, 2005, Hurricane Wilma struck south Florida and damaged portions of Bacher's townhouse roof, windows, and screens. Plaintiff sent workers into the Bacher Townhouse and caused additional damages. Plaintiff also failed to keep the Bacher Townhouse clean and sanitary and dropped debris inside the Bacher Townhouse causing damage. These actions caused damages to the walls, ceilings, and roof. These actions, along with inadequate extermination, caused a rodent infestation in the Bacher Townhouse. Plaintiff failed to install roof tarps in a timely and proper manner resulting in additional water and mold damage to the Bacher Townhouse and personal property. Plaintiff failed to obtain proper permits for the demolition and repair work it was performing and, as a result, the City of Aventura posted one or more Stop Work Orders. On May 25, 2006, the Florida Department of Environmental Protection issued a cease and desist order because workers Plaintiff hired were removing asbestos containing materials improperly and without the proper qualifications, licenses, and permits. The Department of Environmental Management also cited Plaintiff for issues involving asbestos removal. In addition, Plaintiff failed to provide adequate security, resulting in unauthorized entries into the Bacher Townhouse.
Plaintiff, pursuant to the Declaration of Condominium of Commodore Plaza (Declaration), had a duty to perform reconstruction and repairs in accordance with the originalbuilding's plans and specifications; had a duty to not interfere with the peaceful possession of the property by residents; had a duty to keep all parts of the Condominium clean and sanitary; had a duty to follow all laws, zoning ordinances and regulations; and had a duty to meet governmental requirements for maintenance, modification, or repair of the condominium, including the Florida Building Code. Bacher alleges that Plaintiff failed to complete its maintenance, repair, reconstruction, and replacement obligations under the Declaration with respect to the Bacher Townhouse. The Amended Complaint then lists thirty-six ways in which Plaintiff failed to complete its maintenance, repair, reconstruction, and replacement obligations.
Bacher's negligence count alleges that Plaintiff failed to use reasonable care with regard to the repairs to the Bacher Townhouse. The next count alleges that Plaintiff violated the Florida Building Code by not making an application to the proper building officials before starting repairs, not obtaining all required permits, not performing the repairs, and not performing the repairs in accordance with construction industry standards. Bacher's breach of contract claim alleges that Plaintiff beached the Declaration by failing to fulfill its maintenance, repair, and restoration obligations under the Declaration. Bacher's final claim, for breach of fiduciary duty, alleges that Plaintiff, by virtue of the Declaration and the Association powers, has fiduciary obligations to Bacher, which Plaintiff breached by failing to properly perform its obligations under the Declaration.
Summary judgment is appropriate when "the pleadings . . . show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); HCA Health Servs. of Ga., Inc. v. Employers Health Ins. Co., 240 F.3d 982, 991 (11th Cir. 2001). Once the moving partydemonstrates the absence of a genuine issue of material fact, the non-moving party must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (quoting Fed. R. Civ. P. 56(e)). The Court must view the record and all factual inferences therefrom in the light most favorable to the non-moving party and decide whether '"the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997) (quoting Anderson, 477 U.S. at 251-52)).
In opposing a motion for summary judgment, the non-moving party may not rely solely on the pleadings, but must show by affidavits, depositions, answers to interrogatories, and admissions that specific facts exist demonstrating a genuine issue for trial. See Fed. R. Civ. P. 56(c), (e); see also Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A mere "scintilla" of evidence supporting the opposing party's position will not suffice; instead, there must be a sufficient showing that the jury could reasonably find for that party. Anderson, 477 U.S. at 252; see also Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990).
Travelers moves for summary judgment because, based on the Policy exclusion, it has no obligation to defend Plaintiff. Travelers argues that the entire Bacher complaint arises from the damages, destruction, loss of use, or deterioration of the Bacher Townhouse as a result of Hurricane Wilma. The Policy exclusion specifically excludes coverage for any claim "for or arising out of any damage, destruction, loss of use or deterioration of any tangible property." In response, Plaintiff asserts that only part of the Bacher complaint arises from Hurricane Wilma damages. Plaintiff points to allegations in the Bacher Amended Complaint that Plaintiff failed toprovide adequate extermination and rodent control; failed to keep all parts of the Condominium clean and sanitary; interfered with the peaceful possession and proper use of the property; failed to provide adequate security; failed to follow all valid laws, zoning ordinances, and regulations; hired unlicensed and unqualified workers; failed to perform repairs in accordance with the Florida Building Code; breached its duties to Bacher by delaying commencement and completion of repairs to the townhouse; failed to perform maintenance, repair, and replacement work as obligated under the Declaration, allowed unauthorized persons in the Bacher Townhouse, failed to obtain proper permits; and had work performed by unlicensed and unqualified contractors. Plaintiff argues that the statutory violations depend solely on whether the violations were committed, not the reason why the work was commenced. Thus, Plaintiff maintains that the Policy exclusion does not apply because some damages alleged in the Bacher Amended Complaint are not covered by the exclusion.
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