FFB GENERAL INS. CO. v. Insurance Co. of North America

• Decision Date: 09 June 2000
• Docket Number: No. 5D99-943.,5D99-943.
• Citation: 763 So.2d 429
• Parties: FLORIDA FARM BUREAU GENERAL INSURANCE COMPANY, Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, etc., Appellee.
• Court: Florida District Court of Appeals

763 So.2d 429

FLORIDA FARM BUREAU GENERAL INSURANCE COMPANY, Appellant, v. INSURANCE COMPANY OF NORTH AMERICA, etc., Appellee.

No. 5D99-943.

District Court of Appeal of Florida, Fifth District.

June 9, 2000.

Rehearing Denied August 1, 2000.

Lester A. Lewis and James R. Evans, Daytona Beach, for Appellant.

Elizabeth C. Wheeler of Wheeler & Wilkinson, LLP, Orlando, for Appellee.

SAWAYA, J.

The appellant, Florida Farm Bureau General Insurance Company ("FFB"), appeals an order dismissing with prejudice its complaint against the appellee, Insurance Company of North America ("INA"). FFB contends that the trial court erred in dismissing its complaint for failure to state a cause of action for subrogation and indemnification; in concluding that certain policy exclusions applied; and in not allowing FFB leave to amend its complaint. INA argues that the court properly dismissed the complaint and that a release provides additional grounds to support dismissal.

The underlying cause of action arose when Bradley Lamar Preston was killed as a result of an automobile accident wherein he was struck by a tractor trailer while walking along a roadway near property owned by Myron Kirton. At the time of the accident, an "open burning agricultural fire" was being conducted on the property by Myron's son, Kenneth Kirton, who was a licensed forester. The decedent's estate filed suit against the truck driver, the owner of the truck, Myron as owner of the property, and Kenneth for his alleged negligent conduct of the fire. The suit alleged that the accident was caused, at least in part, by a lack of visibility attributable to smoke and debris which emanated from the fire and engulfed the roadway.

Myron was insured by FFB, and Kenneth was insured by INA under a farm liability policy. INA initially undertook the defense of Kenneth but subsequently terminated its defense, claiming that there was no coverage for Kenneth under its policy for the incident. FFB assumed the defense of Kenneth and settled the claim of the decedent's estate at mediation for $150,000.00. FFB obtained a release as to Myron, Kenneth, FFB, and INA. Kenneth assigned his rights under his policy to FFB. In the assignment, FFB agreed not to pursue any action against Kenneth or Myron, and Kenneth agreed to "indemnify [FFB] for the amount of the settlement paid by [FFB] on behalf of Myron Kirton and Kenneth Kirton or, alternatively, to pay according to the apportionment of fault between Myron and Kenneth." FFB also agreed not to pursue Kenneth's indemnity obligation in the event FFB was unsuccessful in its suit against INA.

FFB subsequently demanded that INA indemnify it for the settlement amount. INA refused to reimburse FFB for any amount of settlement, and FFB filed suit against INA on its own behalf and as assignee of Kenneth. The complaint contained three counts which sought 1) determination of coverage for Kenneth under the INA policy and a determination that INA had a duty to indemnify FFB as assignee of Kenneth; 2) a declaratory judgment against INA to establish coverage for the negligence of Kenneth and to establish INA's duty to indemnify FFB; and 3) recovery based on equitable subrogation. Attachments to the complaint included the settlement agreement and assignment of Kenneth's rights to FFB; the complaint filed by the decedent's estate; the release by the estate in favor of Myron, Kenneth, INA, and FFB; and the INA policy.

I. The Exclusion Provisions

The trial court held that dismissal with prejudice was warranted based on the "non-listed location" and "pollution" exclusion clauses contained in INA's policy. INA argues in these proceedings that the "business" exclusion also applies. Although the trial court did not rule on the applicability of this exclusion, INA contends that it provides additional grounds to support the lower court's order of dismissal with prejudice.

Policy exclusions are generally pled as affirmative defenses. See Peninsular Life Ins. Co. v. Hanratty, 281 So.2d 609 (Fla. 3d DCA 1973)

; cf. Fla. R. Civ. P. 1.110(d) ("In pleading to a preceding pleading a party shall set forth affirmatively... any ... matter constituting an avoidance or affirmative defense."). A defense based on a policy exclusion usually raises issues of fact that should not be decided pursuant to a motion to dismiss for failure to state a cause of action. See Cintron v. Osmose Wood Preserving, Inc., 681 So.2d 859, 860 (Fla. 5th DCA 1996) ("In reviewing a motion to dismiss a complaint, the trial court must make its decision solely upon questions of law.").

The most common and appropriate pre-trial motion to raise the issue of whether a particular exclusion clause in an insurance policy applies to prohibit recovery is a motion for summary judgment. A motion to dismiss should not be used "to determine issues of ultimate fact" and "may not act as a substitute for summary judgment." Roberts v. Children's Med. Servs., 751 So.2d 672, 673 (Fla. 2d DCA 2000); see McWhirter, Reeves, McGothlin, Davidson, Rief & Bakas, P.A. v. Weiss, 704 So.2d 214 (Fla. 2d DCA 1998)

; Bolz v. State Farm Mut. Auto. Ins. Co., 679 So.2d 836 (Fla. 2d DCA 1996); see also Cintron. However, the trial court found that the complaint filed by FFB contains specific allegations that establish as a matter of law that the "pollution" and "non-listed location" exclusions apply to prohibit coverage.

We are aware of the rule that "[a]ny exhibit attached to a pleading shall be considered a part thereof for all purposes," Florida Rule of Civil Procedure 1.130(b), and that "[i]f an attached document negates the pleader's cause of action... the plain language of the document will control and may be the basis for a motion to dismiss." Health Application Sys., Inc. v. Hartford Life & Accident Ins. Co., 381 So.2d 294, 297 (Fla. 1st DCA 1980); accord Ginsberg v. Lennar Fla. Holdings, Inc., 645 So.2d 490 (Fla. 3d DCA 1994)

. Thus, the applicability of policy exclusions contained in a policy attached as an exhibit may be raised by a motion to dismiss when the allegations of the complaint clearly show that the exclusions do apply. See Bolz. The issue we must resolve is whether the complaint contains sufficient allegations that show as a matter of law that the particular exclusions at issue negate coverage and warrant dismissal of the action with prejudice.

A. The Non-Listed Location Exclusion

The pertinent provisions of the "non-listed location" exclusion in INA's policy state that the "insurance does not apply to ... `[b]odily injury' or `property damage' arising out of ... [a]n act or omission in connection with any location (other than an `insured location') that is rented to, or owned or controlled by, the `insured.'" The trial court based its decision to dismiss on an allegation contained in FFB's complaint that Kenneth "was solely responsible for conducting the prescribed burn on the property of Myron Kirton, was solely responsible for monitoring and controlling the burn and, when the burn was completed, was solely responsible for extinguishing it." The court then applied a very broad interpretation of the term "control" and reasoned that "Kenneth controlled the non-listed, uninsured property to the extent necessary to conduct, manage, and restrict the burn." However, the complaint also specifically alleges that "[t]he property where the burn occurred was owned, controlled and possessed by Myron Kirton" and that Kenneth "did not own, possess or control the property where the burn occurred to the exclusion of the record title owner."

In reviewing the propriety of an order of dismissal, this court is obligated to consider the allegations in the complaint as true and in the light most favorable to the pleader. See Londono v. Turkey Creek, Inc., 609 So.2d 14 (Fla.1992)

; Cintron; Mettler, Inc. v. Ellen Tracy, Inc., 648 So.2d 253 (Fla. 2d DCA 1994); Stackhouse v. Emerson, 611 So.2d 1365 (Fla. 5th DCA 1993). Considering the allegations in the light most favorable to FFB, the complaint alleges that Kenneth controlled the fire, not the property where it occurred. Therefore, dismissal based on this exclusion was improper.

B. The Pollution Exclusion

The pertinent provisions of the "pollution exclusion" in INA's policy state that insurance is not provided for:

"[b]odily injury" and "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

(a) At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any "insured;"

* * *

... or

(d) At or from any premises, site or location on which any "insured" or any contractors or subcontractors working directly or indirectly on any "insured's" behalf are performing operations:

i) If the pollutants are brought on or to the premises, site or location in connection with such operation by such "insured," contractor or subcontractor....

The policy also provides that these exclusion provisions "do not apply to `bodily injury' or `property damage' arising out of heat, smoke or fumes from a hostile fire."¹ The term "hostile fire" is defined in the policy as "one which becomes uncontrollable or breaks out from where it was intended to be."

The trial court ruled that dismissal based on this exclusion was appropriate because the complaint alleged that Kenneth was solely responsible for conducting, monitoring, controlling, and extinguishing the fire and because "[t]he pollutant that allegedly caused the accident was the smoke that was created as a result of an improper extinguishment of the burn." FFB contends that the pollution exclusion does not apply because the smoke and debris—the alleged pollutants in this case—were not brought on or to the premises as required by the exclusion provisions. FFB further contends that the fire became uncontrollable and resulted in a hostile fire that exempts this case from the pollution exclusion.

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