Evanston Ins. Co. v. Gaddis Corp.

• Decision Date: 31 August 2015
• Docket Number: Case No. 15–CIV–60163–BLOOM/Valle
• Citation: 145 F.Supp.3d 1140
• Court: U.S. District Court — Southern District of Florida
• Parties: Evanston Insurance Company, Plaintiff, v. Gaddis Corporation, a Florida Corporation, B & L Service a Florida Corporation d/b/a Yellow CAB of Broward, and M.D., an Individual, Defendants. Gaddis Corporation, a Florida corporation, and B & L Service Inc., a Florida corporation, Counter–Claimants, v. Evanston Insurance Company, Counter–Defendant.

145 F.Supp.3d 1140

Evanston Insurance Company, Plaintiff,

v.Gaddis Corporation, a Florida Corporation, B & L Service a Florida Corporation d/b/a Yellow CAB of Broward, and M.D., an Individual, Defendants.

Gaddis Corporation, a Florida corporation, and B & L Service Inc., a Florida corporation, Counter–Claimants,

v.Evanston Insurance Company, Counter–Defendant.

Case No. 15–CIV–60163–BLOOM/Valle

United States District Court, S.D. Florida.

Signed August 31, 2015

Filed September 1, 2015

Dustin Craig Blumenthal, Lisa Jane Conrey, John R. Catizone, Litchfield Cavo LLP, Fort Lauderdale, FL, for Plaintiff.

Mark Richard Boyd, Scott Allen Markowitz, Demahy Labrador Drake Victor Payne & Cabeza, Fort Lauderdale, FL, for Defendants and Counter–Claimants.

Michael James Corey, Obront Corey, PLLC, Miami, FL, for Defendants.

Dustin Craig Blumenthal, Lisa Jane Conrey, John R. Catizone, Litchfield Cavo LLP, Fort Lauderdale, FL, for Counter–Defendant.

OMNIBUS ORDER ON MOTIONS

BETH BLOOM

, UNITED STATES DISTRICT JUDGE

THIS CAUSE is before the Court upon Defendant M.D.'s Motion to Dismiss and Stay Remainder of Action, ECF No. [33], Defendants, Gaddis Corporation and B & L Service, Inc. d/b/a Yellow Cab of Broward's Motion for Summary Judgment, ECF No. [44], and Plaintiff Evanston Insurance Company's Cross–Motion for Final Summary Judgment, ECF No. [53] (collectively, the “Motions”). The Court has reviewed the Motions, all supporting and opposing filings, the record in this case, and is otherwise fully advised.

I. Background and Facts

Evanston Insurance Company (“Evanston”) filed this declaratory judgment action pursuant to 18 U.S.C. § 2201 seeking a declaration that: (1) Evanston has no duty to defend B & L Service, Inc. d/b/a/ Yellow Cab of Broward, (“Yellow Cab”) or its parent corporation, Gaddis Corporation (“Gaddis”) (collectively, the “Insureds”) against claims filed by MD in MD v. B & L Service, Inc. et al, No. 0:14–cv–62870–CMA (S.D.Fla.) (the “Underlying Litigation”); and (2) Evanston has no duty to indemnify Yellow Cab in connection with MD's claims. See Complaint, ECF No. [1].

A. The Underlying Litigation

The Underlying Litigation concerns the brutal sexual assault and rape of Defendant M.D. See MD v. B & L Service, Inc. et al., No. 0:14–cv–62870–CMA, ECF No. [51] (“UL Amended Complaint”) (S.D.Fla. Mar. 3, 2015). On October 9, 2014, Defendant M.D. was visiting Fort Lauderdale on vacation. Id. at ¶ 58. After visiting a lounge at the Galleria Mall on Sunrise Boulevard, M.D. and her female companion went to a taxicab stand outside the Mall where a taxi was hailed. Id. at ¶ 59. The taxi, operated by Yellow Cab and driven by Max Raphael (“Raphael”), accepted the passengers and agreed to take the two women to their destination. Id. at ¶ 60. Prior to arriving at their destination, Raphael told his passengers that he could not accept credit cards and drove them to an Automated Teller Machine (“ATM”) so that they could retrieve cash. Id. at ¶ 62. Immediately after M.D.'s companion exited the taxi to walk to the ATM, Raphael sped off with M.D. still in the back seat. Id. at ¶¶ 63–64. Ignoring M.D.'s pleas, Raphael drove to an unoccupied parking lot off the 100 block of Northeast Third Avenue in Fort Lauderdale, exited the taxi, ripped M.D. from the backseat, threw her to the ground, and brutally raped her. Id. at ¶¶ 65–69. M.D. was then left, unconscious, in the parking lot. Id. at ¶ 70.

M.D. was taken to a hospital where a “rape kit” was performed on her. Id. at ¶ 71. The DNA obtained from the rape kit was found to match Raphael and, on November 25, 2014, Raphael was arrested. Id. at ¶¶ 72–73. Raphael is currently awaiting trial on felony kidnapping and sexual battery charges in the Circuit Court in and for Broward County, Florida. Id. at ¶ 73.

On December 17, 2014, M.D. commenced the Underlying Litigation, asserting four counts directly against Yellow Cab for its negligent hiring, retention, and supervision, general negligence, breach of contract of carriage, and negligent infliction of emotional distress, as well as three counts under vicarious theories of liability against Yellow Cab including battery, intentional infliction of emotional distress, and false imprisonment. See id. at ¶¶ 75–146. Additionally, M.D. brings one claim for negligence against the corporation which owns and operates the taxi stand where M.D. and her companion entered Raphael's cab. Id. 147–57.

B. The Insurance Policy

Prior to the incident giving rise to the Underlying Litigation, Evanston issued Gaddis, and Yellow Cab by endorsement, a Commercial General Liability Policy bearing policy number 3C05723 (the “Policy”). See Policy, ECF No. [1–1] at 6, 12–14. The Policy was in effect on October 9, 2014, the date of the unfortunate events. See id. at 6 (providing a policy period from March 31, 2014 to March 31, 2015). The Policy provides that Evanston shall “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Id. at 26 (Section I, Coverages). Logically, therefore, Evanston is not obligated to pay for damages arising from bodily injury or property damage “to which this insurance does not apply.” Id. As noted, this declaratory action presents a question of whether Evanston is obligated to defend and indemnify its insureds in the Underlying Litigation.

The Policy contains various endorsements that limit coverage provided to the insured. Of particular note are the Absolute Professional Liability Exclusion endorsement (“Professional Liability Exclusion”) and the Specified/Designated Premises/Project Limitation endorsement (“Designated Premises Exclusion”). The Professional Liability Exclusion disavows coverage for the insured's failure to render professional services and states the following:

This endorsement modifies insurance provided under the following:

COMMERCIAL GENERAL LIABILITY COVERAGE FORM

* * *

This insurance does not apply to any liability arising out of the rendering of or failure to render professional services or any error or omission, malpractice, or mistake of a professional nature committed or alleged to have been committed by or on your behalf.

This exclusion applies to all injury sustained by any person, including emotional distress, whether alleged, threatened, or actual, including but not limited to your negligence or other wrongdoing.

Further, this exclusion applies with respect to:

1. Hiring, placement, employment, training, supervision, or retention of a person for whom any insured is or ever was legally responsible; or

2. Investigation or reporting to the proper authorities, or failure to so report, or the failure to protect any person while that person was in your care, custody, or control.

Id. at 23.

The Designated Premises Exclusion limits coverage to bodily injury arising out of certain designated premises and reads in full:

This insurance applies only to “bodily injury,” “property damage,” “personal and advertising injury” and medical expenses arising out of:

1. The ownership, maintenance or use of the premises shown in the Schedule (or Declarations); or

2. The project shown in the Schedule (or Declarations).

Id. at 56. The Policy's “Schedule of Locations” contains seventy-one (71) specific addresses to which the insurance purportedly applies. See id. at 15–17 (“Schedule of Locations”). Throughout the term of the Policy, the parties added and deleted various locations. See Policy at 15–17, 73–75, 77–78, 81, 83, 87, 89, 92–93. As locations were included or removed, the premium for the Policy was adjusted accordingly. See id. The unoccupied parking lot where M.D. was viciously assaulted is not, nor ever was, on the Schedule of Locations. See id.

C. Yellow Cab's Operations

Yellow Cab is a taxicab dispatch company, which operates in Broward County, Florida. See Defendants' Statement of Facts (“Def.SOF”), ECF No. [45] at ¶ 8; Evanston Statement of Facts (“Evanston SOF”), ECF No. [51] at ¶ 8. As a dispatch company, Yellow Cab sells services to taxicab permit holders and drivers, including services such as, inter alia, digital dispatch, contracts with various hotels and casinos, access to the Fort Lauderdale International Airport, access to Port Everglades, and vehicle maintenance and repair for vehicles. Def. SOF at ¶ 9; Evanston SOF at ¶ 9. Yellow Cab operates out of three physical locations in Broward County. Def. SOF at ¶ 10; Evanston SOF at ¶ 10. A structure at 221 West Oakland Park Boulevard, Oakland Park, Florida, houses Yellow Cab's executive and financial offices as well as its risk management, advertising, marketing, dispatch, and human resources departments. Def. SOF at ¶ 10; Evanston SOF at ¶ 10. A garage facility and vehicle inventory storage is located at 1800 Northwest 23rd Avenue, Fort Lauderdale, Florida. Def. SOF at ¶ 10; Evanston SOF at ¶ 10. And last, a facility housing driver services and an additional garage facility is located at 800 Northwest 7th Avenue, Fort Lauderdale, Florida. Def. SOF at ¶ 10; Evanston SOF at ¶ 10. All three of these locations appear on the Policy's Schedule of Locations. See Policy at 15–17 (Locations 7, 9, and 28).

II. Discussion

All three Motions presently before the Court seek resolution of a single issue: whether Evanston has a duty to defend and indemnify its Insureds in the Underlying Litigation brought by M.D. See Motions, ECF No. [33], [44], and [53]. Accordingly, the Motions are addressed simultaneously.

A. Applicable Legal Standard

The parties' Motions raise issues under Rule 12(b)(6)

and Rule 56 of the Federal Rules of Civil Procedure. Generally, courts disfavor resolving issues involving contract interpretation at the motion to dismiss stage. See

Assa Compañia De Seguros, S.A. v. Codotrans, Inc., 15 F.Supp.3d 1271, 1275–76 (S.D.Fla.2014) (noting that “[a] court may not engage in contract interpretation at the motion to dismiss stage, as these arguments are more appropriate for summary judgment” (quoting McKissack...