Container Corp. of America v. Maryland Cas. Co.
| Decision Date | 26 March 1998 |
| Docket Number | No. 90150,90150 |
| Citation | 707 So.2d 733 |
| Parties | 23 Fla. L. Weekly S163 CONTAINER CORPORATION OF AMERICA, Petitioner, v. MARYLAND CASUALTY COMPANY, Respondent. |
| Court | Florida Supreme Court |
Steven A. Werber and Tracy S. Carlin of Foley & Lardner, Jacksonville, for Petitioner.
Shelley H. Leinicke of Wicker, Smith, Tutan, O'Hara, McCoy, Graham & Ford, P.A., Fort Lauderdale, for Respondent.
Allan P. Clark and John W. Caven of Foley & Lardner, Jacksonville, for Florida Associated General Contractors Council, Inc., amicus curiae.
We review the decision in Container Corporation of America v. Maryland Casualty Company, 687 So.2d 273 (Fla. 1st DCA 1997), which conflicts with the opinion in Florida Power & Light Co. v. Penn America Insurance Co., 654 So.2d 276 (Fla. 4th DCA 1995). We have jurisdiction. Art. V, § 3(b)(3), Fla. Const.
Southern Contractors, Inc. (Southern) entered into an agreement with Container Corporation of America (Container) to install a vacuum pump on a paper machine at a plant operated by Container. The contract provided that Southern would indemnify Container from "liabilities incurred or arising as a result of the performance by [Southern] of its duties [under the agreement]." The contract also required Southern to purchase a comprehensive liability insurance policy which named Container as an additional insured. Southern secured a liability policy from Maryland Casualty Company (Maryland), which contained an endorsement identifying Container as an additional insured and stating "Interest for operations at operations site by Southern Contractors, Inc." There was no reference to the contract in the Maryland policy.
Thereafter, Daniel Raker, a Southern employee, filed suit against Container, alleging that he had suffered injuries at Container's plant as a result of Container's negligence. Maryland then initiated a declaratory judgment action to determine whether Container was insured for this type of claim under Southern's policy. Both parties moved for summary judgment. The trial court entered summary judgment in favor of Maryland upon the rationale that the policy was limited to coverage for Container's vicarious liability and did not cover Container for its own negligence. The First District Court of Appeal affirmed, reasoning that the indemnity language of the underlying contract between Southern and Container made it clear that the coverage provided by the policy was intended to be limited to Container's vicarious liability. Container, 687 So.2d at 274.
At the outset, we agree that the indemnity language of the contract does not require Southern to hold Container harmless for Container's own negligence. University Plaza Shopping Center, Inc. v. Stewart, 272 So.2d 507 (Fla.1973). However, we cannot agree with the conclusion that the indemnity language of the contract is dispositive of the coverage issue. The policy did not insure the contractual liability of Southern. Rather, the policy contained an endorsement naming Container as an additional insured. 1 The language of the policy is controlling.
In Florida Power & Light, a contract between Florida Power and Light (FP & L) and Eastern Utility Construction, Inc. (Eastern), an independent contractor, for renovations to FP & L's substation required the contractor to purchase general liability insurance. The policy procured by the contractor defined "Persons or Entities Insured" as "any person, organization, trustee, or estate ... but only with respect to operations by or on behalf of the Named Insured or to facilities used by the Named Insured." Florida Power & Light, 654 So.2d at 278. Thereafter, an employee of the contractor who was injured at the substation sued FP & L for its negligence related to his injury. The issue before the court was whether the personal injury claim came within the ambit of the definitional provision "but only with respect to operations by or on behalf of the Named Insured." In concluding that FP & L was an additional insured under the policy, the court stated:
In the instant case, the pertinent policy language merely reads "but only with respect to operations by or on behalf on the Named Insured," Eastern. No language in the provision requires fault on behalf of Eastern before FPL can be considered an additional insured. Thus, the language, similar to the language utilized in the cases discussed above, can only be considered ambiguous at best. The language that was employed by Penn America required only that FPL's liability arise out of the operations of Eastern. Obviously, Haywood's injuries and subsequent lawsuit arose out of some type of "operations" of Eastern as Haywood was an employee of Eastern working at the FPL substation. Therefore, because Penn America did not utilize specific language limiting coverage to the vicarious liability situation and because the language actually utilized is ambiguous at best, the "additional insured" provision must be construed against Eastern and in favor of FPL, the insured. Consequently, the trial court erred in entering a summary judgment in favor of Penn America determining that FPL was not an additional insured under the policy.
Florida Power & Light, 654 So.2d at 279.
Ironically, another panel of the First District below relied on Florida Power & Light to decide a factually similar case contrary to its holding in the instant case. Container Corp. of America v. McKenzie Tank Lines, Inc., 680 So.2d 509 (Fla. 1st DCA), review dismissed, 679 So.2d 774 (Fla.1996). In McKenzie, Container was named in McKenzie's policy as an additional insured "regarding operations performed by insured." Id. at 512. The court reasoned that if there was an intent to limit coverage to accidents caused by the named insured, the certificate of insurance could have expressly so provided.
Several courts from other jurisdictions have interpreted "additional insured" policy provisions to reach the same result as Florida Power & Light in similar factual contexts. Thus, in Casualty Insurance Co. v. Northbrook Property & Casualty Insurance Co., 150 Ill.App.3d 472, 103 Ill.Dec. 495, 501 N.E.2d 812 (1986), the language adding the additional insured read: "but only with respect to liability arising out of operations performed for the additional insured by the named insured." Id., 103 Ill.Dec. at 497, 501 N.E.2d at 814. The court held that because the policy language was not expressly limiting, the additional insured was entitled to coverage for its own negligence. Accord Philadelphia Elec. Co. v....
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