Evanston Ins. Co. v. Stan Weeks & Assocs.

• Decision Date: 07 March 2023
• Docket Number: 2:21-cv-508-JES-KCD
• Parties: EVANSTON INSURANCE COMPANY, a foreign corporation, Petitioner, v. STAN WEEKS & ASSOCIATES, INC., a Florida corporation, Respondent.
• Court: U.S. District Court — Middle District of Florida

1

EVANSTON INSURANCE COMPANY, a foreign corporation, Petitioner, v. STAN WEEKS & ASSOCIATES, INC., a Florida corporation, Respondent.

No. 2:21-cv-508-JES-KCD

United States District Court, M.D. Florida, Fort Myers Division

March 7, 2023

OPINION AND ORDER

JOHN E. STEELE SENIOR UNITED STATES DISTRICT JUDGE

This insurance coverage dispute involves two excavators owned by Stan Weeks & Associates, Inc. (Weeks), an excavation and mining company, that were damaged after a levee failed and flooded a shell mine where the excavators were located. Evanston Insurance Company (Evanston) filed a declaratory judgment action (Doc. #1) seeking declarations that coverage for the loss to one excavator was excluded under the policy's “earth movement” exclusion (Count I) and that coverage for the loss to both excavators was excluded under the policy's “water damage” exclusion (Count II) . (Id., pp. 7-8.) Weeks filed a Counterclaim for breach of contract, alleging that Evanston failed or refused to fully indemnify Weeks for the loss to both excavators in accordance with the policy. (Doc. #23, p 8.)

This matter now comes before the Court on review of the parties' cross Motions for Summary Judgment (Docs. ##40 59). The parties filed Responses in Opposition (Docs. ##48 61), and a Reply (Doc. #49.) For the reasons set forth below Evanston's motion is granted and Week's motion is denied.

I.

Summary judgment is appropriate only when the Court is satisfied that “there is no genuine dispute as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “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.” Baby Buddies, Inc. v. Toys “R” Us, Inc., 611 F.3d 1308, 1314 (11th Cir. 2010). A fact is “material” if it may affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “A court must 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.'” Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir. 2004)(quoting Anderson, 477 U.S. at 251).

In ruling on a motion for summary judgment, the Court views all evidence and draws all reasonable inferences in favor of the non-moving party. Scott v. Harris, 550 U.S. 372, 380 (2007); Tana v. Dantanna's, 611 F.3d 767, 772 (11th Cir. 2010). However, “if reasonable minds might differ on the inferences arising from undisputed facts, then the court should deny summary judgment.” St. Charles Foods, Inc. v. America's Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir. 1999)(quoting Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983)(finding summary judgment “may be inappropriate even where the parties agree on the basic facts, but disagree about the factual inferences that should be drawn from these facts”)). “If a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that inference introduces a genuine issue of material fact, then the court should not grant summary judgment.” Allen v. Bd. of Pub. Educ., 4 95 F.3d 130 6, 1315 (11th Cir. 2007).

II.

The material facts are not in dispute:

Evanston issued an “all-risks” insurance policy (the Policy) to Weeks for the period of July 28, 2020 through July 28, 2021. (Doc. #1-2.) The Policy (policy #SAA333192) provided coverage for scheduled equipment, including excavators bearing serial numbers GKX00341 (Excavator 1) and DKY03913 (Excavator 2). (Doc. #1, ¶ 6.) The parties agree that no part of the Policy relating to the claim is ambiguous. The Policy's Insuring Clause stated: “We will pay for loss to Covered Property from any one occurrence caused by a Covered Cause of Loss, during the coverage period.” (Doc. #1-2, p. 82, emphasis in original.)

The Policy's Covered-Cause-Of-Loss Clause stated that the Policy covers “Loss caused by any external cause, except as otherwise excluded in paragraph V.” (Id.) In turn, the Policy's “earth movement” and “water damage” exclusions contained in paragraph V provided:

V. PERILS EXCLUDED

This policy does not insure against loss which is caused by, or arises in or from any of the following, whether or not there are any other contributing causes which would otherwise be covered by this policy.

* * *

D. Earthquake, volcanic eruption, landslide, or other earth movement;

* * *

F. Water damage caused by, contributed to or aggravated by any of the following;

1. Flood, surface water, rising waters, waves, tides or tidal waves, storm surge, overflow of any body of water or their spray, all whether driven by rain or not;

2. Mudslide or mudflow;

3. Water which backs up from any sewer or drain; or Water that seeps, leaks or flows from below the surface of the ground;

* * *

(Id. at 83-84, emphasis in original.)

Weeks asserts that on November 20, 2020, it suffered a total loss of two excavators. On December 2, 2020, Weeks submitted a “Liability Notice of Occurrence/Claim” to Evanston (Doc. #40-1) to report the loss. Weeks reported that Excavator 1 was “submerged in a sinkhole” while on the job, and Excavator 2 was “submerged when [an] isolation levy failed due to a sinkhole at jobsite” at a shell mine in Punta Gorda, Florida. (Doc. #1, ¶ 12.) The Notice included the following pictures of Excavator 1 and Excavator 2:

(Image Omitted)

(Docs. ##1-3; 1-4.)

Evanston retained independent adjuster Engle Martin & Associates (Engle Martin) which, along with a representative from Weeks, inspected the scene and the damaged excavators on December 14, 2020. (Doc. #1, ¶¶ 15-16.) Both excavators were found to be a total loss. Under the heading “Cause of Loss,” the Engle Martin report stated:

According to the insured representative, the insured was working at a job site and had left their equipment there overnight. Upon returning the following morning, they found a sink hole had opened beneath one excavator (Ser # GKX00341) and it had sunk. The photo the insured provided showed only the arm and bucket above the water.

With the formation of the sinkhole, the flow of water apparently caused the levee to fail as well, which flooded approximately 6 acres adjacent to the sinkhole. Excavator (Ser # D KY03913) was parked in that field and suffered flooding damage into the cab.

(Doc. #59-5, p. 3.)

In February 2021, Evanston advised Weeks by telephone that coverage for the loss was excluded under the Policy's “earth movement” and “water damage” exclusions. (Doc. #1, ¶ 19.) Weeks disagreed with Evanston's conclusion. (Id., ¶ 20.)

Evanston then retained J.S. Held LLC (JS Held) to determine the cause and origin of the ground movement. JS Held performed a ground-movement assessment at the shell mine on March 1, 2021. (Doc. #59-6; Doc. #40-2.) The Ground Movement Report, issued March 9, 2021, described the property as a 138-acre parcel which had been used as an active shell mine since 2007 or 2008. At the time of the inspection there were two older mine pits, or “cells,” which were no longer being mined, plus a third pit which was actively being mined. The pits were approximately 25 to 30 feet below grade. Due to relatively high groundwater table, the mining activities required dewatering, and the two older pits were used to hold the water from the new active pit.^[1] (Doc. #59-6, p. 3.)

The Ground Movement Report set forth the following relevant information, provided by Weeks, describing the events leading to the loss: At the end of the day before the loss, an excavator was parked on a “shelf” (an area where the ground elevation was raised several feet above the bottom of the pit) in the de-watered active mining pit. A second excavator was parked within the active pit farther to the south. When Weeks personnel returned to the mine the next morning, it was discovered that the active pit had flooded and the road between the new and old pits had been washed out. The flow of the water into the active pit had eroded the soil of the shelf which had supported the excavator, resulting in the excavator falling to the bottom of the pit and being buried by suspended soils in the floodwater. The second excavator in the pit was also flooded, but the soil underneath it had not been washed out. The berm between the two older pits had been washed out, resulting in the water level in the smaller pond rising by several feet. (Doc. #59-6, p. 5.)

The Ground Movement Report concluded:

The soil movement which reportedly caused damage to one excavator was the result of the hydrodynamic forces of water eroding the soils which supported the excavator.

The excavator was reported to be parked near the edge of a raised “self” in the mining pit, and the erosion of the soil caused the excavator to fall into a lower section of the pit. The excavator was subsequently buried by the suspended soils in the water.

The flood event was initiated due to a partial washout of the berm between the smaller pond in the center of the property, and the larger pond on the north side of the property. The berm washout resulted in the water level in the smaller pond rising several feet, which in turn resulted in the washout of the berm on the north side of the road between the new mining pit and the pond. Water subsequently flowed across the road, washing out the berm on the south side of the road and then flowing into the new mining pit.

(Doc. #59-6, pp. 6-7.)

On March 17, 2021, Evanston issued a written declination of coverage to Weeks. (Doc. #1, ¶ 26.)

III.

The “all risks” policy Evanston issued to Weeks (Doc #1-2) is governed by Florida law.^[2] "[A]n 'all-risk' policy is not an 'all loss'...