Florida Ins. Guar. Ass'n, Inc. v. Revoredo

• Decision Date: 27 August 1997
• Docket Number: No. 95-3124,95-3124
• Parties: 22 Fla. L. Weekly D2023 FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Appellant, v. Zenobia REVOREDO, as personal representative of the Estate of Gilberto E. Revoredo, deceased, Appellee.
• Court: Florida District Court of Appeals

Page 890

698 So.2d 890

22 Fla. L. Weekly D2023

FLORIDA INSURANCE GUARANTY ASSOCIATION, INC., Appellant, v. Zenobia REVOREDO, as personal representative of the Estate of Gilberto E. Revoredo, deceased, Appellee.

No. 95-3124.

District Court of Appeal of Florida Third District.

Aug. 27, 1997.

Walton Lantaff Schroeder & Carson and John P. Joy and Kenneth L. Valentini, Miami, for appellant.

Murray B. Epstein; Perse & Ginsberg and Arnold Ginsberg, Miami, for appellee.

Before FLETCHER, SHEVIN and SORONDO, JJ.

FLETCHER, Judge.

Florida Insurance Guaranty Association, Inc. [FIGA] appeals a summary final judgment determining it to be liable to the estate of Gilberto Revoredo [the estate] pursuant to an insurance policy issued by Guardian Property and Casualty Insurance Company [Guardian](now insolvent and for which FIGA has been substituted). Concluding that Gilberto Revoredo's death is excluded from the policy's coverage, we reverse the summary final judgment and remand the cause for further proceedings.

Gilberto Revoredo was an employee of Lele Concrete and Pumping Company [Lele], a subcontractor hired to accomplish the pouring of concrete for a house being constructed for another person by Tomas Perez, the general contractor. Pursuant to section 440.10(1), Florida Statutes (1989), ¹ Revoredo was thus deemed to be employed by Perez, who was thus required to secure payment of Revoredo's workers' compensation if Lele did not. In February, 1990, during the pouring of a concrete tie beam at the job site, Revoredo fell from a scaffold and died shortly thereafter. Neither Lele, Revoredo's actual employer, nor Perez, the general contractor, had provided worker's compensation insurance.

Revoredo's estate filed a wrongful death action against Perez. Relying upon a commercial general liability policy issued to him by Guardian, Perez demanded that Guardian defend the wrongful death action. When Guardian refused to defend (based on the standard employee exclusion ² provisions in the policy), Perez stipulated to entry of judgment in favor of the estate, which in return agreed to pursue only Guardian. Perez then assigned to the estate any rights he may have had against Guardian, against which Revoredo's estate then filed suit. FIGA was subsequently substituted for Guardian and the trial court entered a summary final judgment against it.

The question the parties argue before this court is whether Revoredo's fall and death are excluded from coverage under Perez's Guardian policy pursuant to the standard employee exclusion provisions thereof (FIGA's position), or whether, because Perez failed to secure payment of workers' compensation, Revoredo did not become an employee and thus his fall and death are not excluded from coverage (the estate's position). ³ Specifically the employee exclusions read (in relevant part):

"This insurance does not apply to:

d. Any obligation of the insured under a worker's compensation ... law.

e. 'Bodily injury' to:

(1) An employee of the insured arising out of and in the course of employment by the insured...."

Similar exclusions were the subject of analysis by the First District Court of Appeal in Greathead v. Asplundh Tree Expert Co., 473 So.2d 1380, 1383 (Fla. 1st DCA 1985):

"Florida case law suggests that the purpose of exclusions such as No. 2 [similar to Guardian's exclusion d] is to exclude coverage of those employees protected by the workers' compensation law, whereas the language of No. 5 [similar to Guardian's exclusion e] acts to exclude liability for injury to employees generally. Although the two may overlap to a certain degree, they are not to be read together to exclude only those employees protected by workers' compensation."

Thus, if Perez' obligation to Revoredo or his estate is under the workers' compensation law (as expressed in exclusion d) or if Revoredo was Perez' "employee" within exclusion e's meaning, his fall and death are excluded from the policy's coverage.

We find that both exclusions apply. The Florida Supreme Court, in Motchkavitz v. L.C. Boggs Industries, Inc., 407 So.2d 910, 912 (Fla.1981), made it clear that subcontractors' employees, such as Revoredo, are employees of the contractor and are protected by the workers' compensation law, stating:

"Section 440.10 establishes the concept of 'statutory employer' for contractors who sublet part of their work to others. Section 440.11 provides that the liability established in 440.10 is 'exclusive.' The effect of section 440.10 is that where a subcontractor performing part of the work of a contractor fails to secure payment of compensation, the contractor is liable for same. If both subcontractor and contractor fail to secure coverage, then the contractor has an employer's liability to the subcontractor's injured employee for purposes of an action for statutory benefits or damages at law or in admiralty." [e.s.]

Statutory employees have been treated identically to actual employees in relation to standard employee exclusion clauses. Dodge v. Fidelity & Cas. Co. of N.Y., 424 So.2d 39 (Fla. 5th DCA)(citing Ward v. Curry, 341 S.W.2d 830 (Mo.1960), rev. denied, 431 So.2d 988 (Fla.1983)); see also Michaels v. United States Fidelity & Guar. Co., 129 So.2d 427 (Fla. 2d DCA 1961). The logic in the exclusion from coverage of both types of employees is simple and compelling: the only coverage intended, and for which the premium has been paid, is the liability of the insured to the public, as distinguished from liability to the insured's employees whether or not they are protected by the workers' compensation law.

Revoredo's estate contends, nonetheless, that neither exclusion applies as (1) Revoredo was not a statutory employee of Perez because Perez did not secure payment of workers' compensation, and (2) thus Perez' liability for wrongful death is an obligation under common law, not under workers' compensation law. The estate is wrong on both counts. First, section 440.10(1) does not make the statutory employer-employee relationship contingent on the securing of workers' compensation for the employee. Rather, it is the creation of the statutory employer-employee relationship that establishes the employer's duty to secure compensation. The Fifth District Court of Appeal, in Lingold v. Transamerica Ins. Co., 416 So.2d 1271, 1272-73 (Fla. 5th DCA 1982)(footnotes omitted), noted that it is the act of subletting (subcontracting) that renders the contractor (here Perez) an employer of the subcontractor's employees:

"Under Florida law applicable in this case, an entity is required to provide workers' compensation when it is an 'actual' employer because it employs laborers under direct supervision and control or when it, as a contractor, sublets part of a contract obligation to others and thereby becomes a 'statutory employer' of the subcontractor's employees." [e.s.]

None of our statutes declare, and none of our courts has decided, that a failure to secure payment of compensation disestablishes the statutory employer-employee relationship. We specifically hold that there is no such disestablishment.

Second, pursuant to section 440.11(1), Florida Statutes (1989), ⁴ Perez' liability remained under the workers' compensation law notwithstanding his failure to secure payment of compensation. This is shown by the statute's elimination, in the estate's wrongful death action, of Perez' ability to plead negligence by another employee, of his ability to plead that Revoredo assumed the risk of the employment, and of his ability to plead that the injury was due to Revoredo's comparative negligence. Indeed, our supreme court noted in Motchkavitz v. L.C. Boggs Industries, Inc., 407 So.2d at 912, that the failure to secure compensation does not extinguish this employer-employee relationship:

"If both subcontractor and contractor fail to secure coverage, then the contractor has an employer's liability to the subcontractor's injured employee for...