Grissom v. Commercial Union Ins. Co.
| Decision Date | 22 December 1992 |
| Docket Number | No. 91-1031,91-1031 |
| Citation | 610 So.2d 1299 |
| Court | Florida District Court of Appeals |
| Parties | 18 Fla. L. Week. D113 Joseph T. GRISSOM, Jr., Appellant, v. COMMERCIAL UNION INSURANCE COMPANY, a corporation, Appellee. |
Stephen P. Smith III of Smith & Smith, P.A., Jacksonville, for appellant.
Bruce S. Bullock and Bert A. Rasmussen of Bullock, Childs & Pendley, P.A., for appellee.
Joseph T. Grissom, Jr., appeals an adverse final judgment in his suit to recover litigation expenses incurred in defending a claim for damages allegedly within the coverage of Grissom's liability insurance policy with Commercial Union Insurance Company based on its refusal to defend. The trial court denied Grissom relief on two grounds. First, the court ruled that the complaint in the original suit against Grissom did not allege facts constituting an insured "occurrence" or "accident" within policy coverage, so Commercial Union had no duty to defend. Second, the court ruled that this action was barred by the applicable statute of limitations because it was not timely brought within five years of the date Commercial Union declined coverage. Concluding that both of these rulings are erroneous, we reverse and remand for further proceedings.
This action was commenced on August 11, 1989, when Grissom filed a complaint against Commercial Union for breach of contract. Commercial Union had issued Grissom an owner's, landlord's, and tenant's liability insurance policy insuring him against liability for bodily injury or property damage "caused by an occurrence and arising out of the ownership, maintenance or use of the insured premises." Under the policy, Commercial Union agreed to defend Grissom in any lawsuit based on a covered liability claim. The case ultimately went to trial on the issues raised in the complaint, the amended answer and affirmative defenses, and the reply to the affirmative defenses. The evidence was largely undisputed.
In 1975, Grissom was sued in circuit court, case number 75-9302-CA, by Ayers and Thompson, as trustees of the Seaboard Avenue Baptist Church located across the street from Grissom's property. The complaint, as amended, alleged that Grissom had intentionally filled and elevated a natural watercourse across his land, with knowledge that the drainage of a natural stream was being blocked, and that by reason of filling and raising the elevation of his land, and "by reason of failing to provide for adequate drainage facilities," waters backed up and flooded the church's property. The church sought monetary damages and a permanent injunction requiring Grissom to restore and maintain the previously existing watercourse drainage. 1
Commercial Union initially assumed the defense of this claim under a reservation of rights, but subsequently declined coverage and withdrew its defense, asserting in its letter of September 12, 1975, that the actions for which Grissom was sued "are alleged to be intentional" and "[t]he alleged consequences appear to have been forseeable [sic], in general nature if not in specific extent." 2
Grissom assumed the defense of the action and filed third-party complaints alleging claims arising out of the drainage problem that was the basis of the church's suit against him. The third-party defendants were upstream owners and the City of Jacksonville, and Grissom alleged that these third-party defendants had altered the natural drainage system so as to cause the drainage problems suffered by the church and Grissom himself. These third-party defendants counterclaimed for damages and injunctive relief against Grissom based on his having altered the flow of water across his land. Although the counterclaim in evidence alleges that Grissom filled in his land, it does not allege that he intended to harm the property of the other owners or the City. By letter of October 6, 1976, Grissom notified Commercial Union of these counterclaims and requested that it reconsider its decision declining coverage under the circumstances. Commercial Union did not provide a defense in response to this request.
The original claim for property damage by the church was settled pursuant to an agreement executed on September 25, 1976. However, the injunction claim was tried and the temporary injunction against Grissom was made permanent in an amended final judgment entered March 22, 1979. Grissom continued to prosecute the surviving third-party claims and counterclaims in that case until all claims were voluntarily dismissed on December 19, 1984.
Certain third-party defendants were dismissed from the original suit, case number 75-9302-CA, in 1976 and Grissom immediately filed another suit against them in circuit court, case number 76-12676-CA. The claims asserted in this second suit were essentially the same as the third-party claims in case number 75-9302-CA, in that Grissom sought monetary damages and injunctive relief in respect to changes made by the defendants to upland drainage that allegedly caused damage to Grissom's real property and the church's property. Similar counterclaims were asserted against Grissom by the defendants in that case. All claims in the second suit were litigated between Grissom and the defendants until the action was dismissed pursuant to a stipulation executed on October 4, 1988.
The evidence also established that Grissom had purchased the real property involved in 1962. The property lay adjacent to Seaboard Avenue, and a drainage ditch or swale ran down Grissom's property from a culvert that ran underneath Seaboard Avenue from the other (east) side and drained a large area. The swale meandered across Grissom's land, across adjoining property to the north of Grissom's land, and thence into a creek. In 1964, Superior Homes, Inc., owner of a large tract on the east side of Seaboard Avenue, improved drainage of its property by construction of a canal 1000 feet long, 20 feet wide, and 5 feet deep, extending eastward from the culvert underneath Seaboard Avenue. This canal was connected to a drainage system that drained some 40 acres of land. The canal increased the velocity and volume of water emptying onto Grissom's land, causing substantial erosion to his land. Grissom re-routed the swale, after consulting with the Soil Conservation Service of the United States Department of Agriculture, in an attempt to minimize this increased erosion. In 1975, extremely heavy rains fell on this neighborhood--up to 50 percent higher than normal during some months. As a consequence, the church experienced flooding of its property, and it sued Grissom on August 15, 1975, alleging the claims set forth in note 1, supra.
Underlying the settlement of all claims arising out of this drainage dispute in both lawsuits was the installation of an underground culvert by the City of Jacksonville to adequately drain the area in question. This culvert was installed immediately north of Grissom's property line at a cost of more than $200,000. This installation allowed the development planned on the east side of Seaboard Avenue to proceed without flooding the area and without causing the erosion that had been occurring on the west side of the street, primarily on Grissom's property.
In this suit against Commercial Union, Grissom sought to recover damages for expenses and attorneys' fees incurred in defending the drainage litigation initiated by the church and the defense of the various counterclaims against Grissom spawned thereby. The trial court entered final judgment for Commercial Union on two grounds.
First, the trial court found that the policy definition of an "occurrence" was clear and unambiguous. It ruled that the insurance company's duty to defend must be determined from the allegations of the complaint alone, and if the complaint affirmatively shows either the non-existence of coverage or applicability of a policy exclusion, the insurer has no obligation to defend. Reviewing the allegations of the complaint, the judgment concluded that "the alleged intentional acts of the Plaintiff Grissom in blocking the alleged waterway, and in the continued willful blockage into the year of coverage, while the complaining church's lands and buildings were allegedly flooded and damaged, was neither an 'occurrence' nor an 'accident' as defined by the policy."
Second, the court ruled that the five-year statute of limitations applicable to Grissom's claim for breach of contract commenced running in 1975 when Commercial Union notified Grissom that it declined to defend the suit, or alternatively, when Grissom settled the damage claim with the church in 1976, and thus the limitations period had expired long before the present action against Commercial Union was filed in August 1989. The court further found no basis in the evidence for waiver or estoppel by reason of Commercial Union's representations or conduct that would avoid application of the statute of limitations defense.
Grissom challenges both rulings on this appeal.
Addressing Grissom's first point, we hold that the court erred in ruling that the alleged claims were not within the policy coverage. We have no disagreement with the principles of law recited in the final judgment, but conclude that these principles were incorrectly applied due to a misinterpretation of both the legal effect of the policy definitions and the implication of the allegations in the amended complaint.
The explicit reason stated in Commercial Union's letter declining coverage and defense of the church's lawsuit was that the complaint did not allege an "occurrence" or "accident" within the meaning of the policy because it alleged that Grissom's actions were intentional. (See note 2, supra.) Agreeing with Commercial Union's contentions, the trial court focused entirely on Grissom's intentional filling of the drainage watercourse, concluding therefrom that no "occurrence" or "accident" within the policy coverage had...
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