Jacobs v. Mid-Continent Cas. Co.
| Decision Date | 08 September 2021 |
| Docket Number | 19-61017-CIV-ALTMAN |
| Parties | JODI JACOBS, Plaintiff, v. MID-CONTINENT CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Under Florida law, a plaintiff who settles with an insured defendant-and then sues the defendant's insurer for indemnification-must prove that the settled claims were covered by the insurance policy. And, if the settlement agreement includes some claims that are covered by the insurance policy and some that aren't, then the plaintiff must allocate the total damages as between the covered and uncovered claims. Otherwise, in the later suit against the insurer, the plaintiff would be asking for money for claims that weren't covered by the policy-a result the law understandably forbids. One more thing: Florida law is clear that the burden of establishing this allocation (as between covered and uncovered claims) falls on the plaintiff-and that the plaintiff's failure to allocate entitles the insurer in the later suit to summary judgment.
Our Plaintiff, Jodi Jacobs, sued two defendants in state court alleging that their negligence caused her husband's injuries. When their general liability insurer, Mid-Continent Casualty Company (“MCC”), refused to defend the lawsuit, she settled with both state-court defendants. That settlement gave Mrs. Jacobs a consent judgment of $450, 000 and an assignment of the state-court defendants' claims against MCC. With that assignment in hand, she brought this lawsuit against MCC for the entire $450, 000. But, while Mrs Jacobs contends that her claims in the underlying case (as against one of the defendants) were covered by the general liability policy, she admits that the two claims against the other defendant weren't. And she concedes-as she must-that the state-court settlement agreement didn't allocate the $450, 000 between the covered and uncovered claims. Nor is there any evidence in the record from which a reasonable jury could calculate the proper allocation. Given the clarity of Florida law on this dispositive question, we GRANT MCC's Amended Motion for Final Summary Judgment and Incorporated Memorandum of Law (“Def.'s MSJ”) [ECF No. 56].
Mrs. Jacobs-the representative of the Estate of her husband, Barry Jacobs-sued Vesta Construction Inc. and its president, Mark Zekofsky, in Florida state court. See Amended Joint Statement of Material Facts (“Joint SOMF”) [ECF No. 54] ¶¶ 3, 8; see also Underlying Complaint [ECF No. 54-2]. In her Underlying Complaint, she alleged that Vesta was the general contractor on a construction project and that it subcontracted the work to Richard Cornelia, individually or d/b/a A.R.C. Builders (“Cornelia”), which turned out to be an unregistered and fictitious name. See Joint SOMF ¶¶ 5-6. Neither Vesta nor Cornelia maintained workers'-compensation insurance as required by Florida law. Id. ¶ 9. Cornelia nonetheless employed Barry Jacobs and “stationed him” on the roof of the construction project. Id. ¶ 7. While at work, Mr. Jacobs fell from the roof and suffered serious bodily injury. Id. ¶¶ 10-12.
The Underlying Complaint asserted two claims. In Count I (“Claim for Damages as Employee Against Vesta and Zekofsky”), it alleged that “Vesta and Zekofsky failed to provide Jacobs with a safe place to work as he stood on a narrow tie beam” and that both defendants were liable in negligence. See Underlying Complaint ¶¶ 8-16. In Count II (“Alternative Claim for Damages as Independent Contractor Against Vesta and Zekofsky”), it advanced the same negligence claim-this time, under an alternative theory that Mr. Jacobs was working as an independent contractor, rather than an employee, when he fell. Id. ¶¶ 17-23. Neither claim alleged that Vesta was vicariously or jointly-and- severally liable, and neither purported to allocate responsibility or damages between the two defendants. See Id. ¶¶ 8-23. To the contrary, both counts averred only that “Vesta and Zekofsky” were negligent and liable for damages. Id. ¶¶ 16, 23 (emphasis added).[1]
Mrs. Jacobs eventually entered into a Settlement Agreement with Vesta and Zekofsky, under the terms of which the state-court defendants stipulated to a consent judgement in favor of Mrs. Jacobs in the amount of $450, 000. See Joint SOMF ¶ 13. The Settlement Agreement prevented Mrs. Jacobs from executing the judgment against Vesta or Zekofsky; instead, it authorized her to sue Vesta and Zekofsky's commercial liability insurer, MCC, as an assignee of whatever insurance claims they held against MCC based on its denial of coverage. Id. ¶¶ 14-16.[2] The state trial court entered a final consent judgment in favor of Mrs. Jacobs and in the amount of $450, 000. Id. ¶ 16.
In February 2019, Mrs. Jacobs filed this lawsuit against MCC in Florida state court, claiming that MCC had breached its contractual duties to defend and indemnify both Vesta and Zekofsky in the underlying action. Id. ¶¶ 17-19.[3] She sought a declaratory judgment to that effect-plus the $450, 000 contemplated in the consent judgment. Id. MCC removed the case and, in its affirmative defenses, argued that the commercial liability policy excluded coverage for the underlying action. Id. ¶¶ 20-22. It also contended that the Settlement Agreement was unreasonable and that it failed to allocate damages between Vesta and Zekofsky. Id.
Cross-Motions for Summary Judgment[4]
In her MSJ, Mrs. Jacobs asks for summary judgment on the coverage question. Her view is that MCC had an obligation under the insurance policy to defend and indemnify Zekofsky (though not Vesta) in the underlying action. See Pl.'s MSJ at 8. The motion is for partial summary judgment because, even if she's right, she'd still have to prove (at trial) that the Coblentz agreement was reasonable and that it was negotiated in good faith. Id.
MCC's MSJ essentially mirrors the Plaintiff's-though it asks for final summary judgment. It argues, mainly, that Vesta and Zekofsky qualified as Mr. Jacobs's “statutory employer” under Florida law, and that coverage for Mr. Jacobs's accident was precluded by two exclusions in the policy-a workers'-compensation exclusion and an employer-liability exclusion. See Def.'s MSJ at 4. MCC also claims that Mrs. Jacobs's claims fail as a matter of law because, while the Coblentz agreement contemplated both covered and uncovered damages, it didn't “allocate” those damages as between Vesta and Zekofsky. Id. at 4, 17-20.
Because we resolve this case on this latter argument, we take a moment to review the evidence surrounding the Settlement Agreement. First, Mrs. Jacobs concedes that the consent judgment-like the Settlement Agreement that spawned it-didn't allocate damages between Vesta and Zekofsky. See Pl.'s SOMF Resp. [ECF No. 60] ¶ 25 (“Plaintiff does not dispute that the final Consent Judgment is unallocated.”). Second, we have a bit of a factual dispute relating to the testimony of a crucial witness. According to MCC, Stuart Share-Mrs. Jacobs's attorney in the underlying action-testified that: (1) the $450, 000 consent judgment wasn't allocated as between Vesta and Zekofsky; (2) he never discussed allocation with counsel for Vesta or Zekofsky at all during the settlement negotiations; and (3) he never sought to differentiate the liability between the two defendants before entering into the Settlement Agreement. See Def.'s SOMF [ECF No. 55] ¶¶ 25-27. Mrs. Jacobs quibbles with MCC's characterization of Mr. Share's testimony. As she points out, Mr. Share didn't say specifically that he hadn't talked about allocation with counsel for Vesta and Zekofsky; instead, she says, he testified only that he didn't remember having had any such discussions. See Pl.'s SOMF Resp. ¶¶ 25-26 ( ). But, as we'll see, this is really a distinction without a difference, because Mrs. Jacobs doesn't dispute MCC's central proposition that Mr. Share “didn't differentiate between the two of them [Vesta and Zekofsky].” Id. ¶ 27. Third, Mr. Share testified that, during the underlying action, he didn't believe that Mr. Jacobs was comparatively negligent at all. Id. ¶ 28. This, as we explain below, is just totally irrelevant to the outcome.
Summary judgment is appropriate when there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Celotex Corp. v Catrett, 477 U.S. 317, 322 (1986); Fed.R.Civ.P. 56(a). In determining whether to grant summary judgment, the Court must consider “particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c). “By its very terms, this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). An issue of fact is “material” if it might affect the outcome of the case under the governing law. Id. at 248. A dispute about a material fact is “genuine” if the evidence could lead a reasonable jury to find for the non-moving party. Id.
At summary judgment, the movant bears the burden of proving the absence of a genuine issue of material fact, with all factual inferences drawn in favor of the non-m...
To continue reading
Request your trial