Kattoum v. New Hampshire Indem. Co.

• Decision Date: 28 September 2007
• Docket Number: No. 2D05-3526.,2D05-3526.
• Citation: 968 So.2d 602
• Parties: Taisyer KATTOUM and Saadia Kattoum, Appellants, v. NEW HAMPSHIRE INDEMNITY COMPANY, Appellee.
• Court: Florida District Court of Appeals

968 So.2d 602

Taisyer KATTOUM and Saadia Kattoum, Appellants, v. NEW HAMPSHIRE INDEMNITY COMPANY, Appellee.

No. 2D05-3526.

District Court of Appeal of Florida, Second District.

September 28, 2007.

Rehearing Denied November 5, 2007.

Charles P. Schropp of Schropp, Buell & Elligett, P.A., Tampa, and James L. Dowling of Law Offices of Berger & Dowling, Palm Harbor, for Appellants.

Peter S. Roumbos and Stuart C. Poage of Young, Bill, Fugett & Roumbos, PA., Pensacola, for Appellee.

KELLY, Judge.

Taisyer Kattoum and his wife, Saadia Kattoum, appeal the final declaratory judgment in favor of New Hampshire Indemnity Company (NHIC) holding that the Kattoums' claims were excluded from coverage under their NHIC policy because their loss was the result of an intentional act of Mrs. Kattoum. The Kattoums argue that the trial court erred in construing the policy and that the intentional acts exclusion in the NHIC policy did not exclude an "innocent co-insured" from coverage based on the intentional misconduct of another insured. We agree that the trial court erred in construing the Kattoums' insurance policy and, accordingly, we reverse.

Florida has long recognized that an insurer is not liable to indemnify an insured for losses directly caused by the fraud or misconduct of that insured. Carter v. Carter, 88 So.2d 153 (Fla.1956). However, because insurance policies frequently provide coverage for more than one insured, the question arises as to whether the policy is intended to insure all named insureds jointly or whether the coverage is severable so as to provide separate coverage of the respective interests of two or more joint owners and co-insureds. If the policy provides joint coverage, the fraud or misconduct of one insured can be imputed to an "innocent co-insured." See Auto-Owners Ins. Co. v. Eddinger, 366 So.2d 123-24 (Fla. 2d DCA 1979). However, Florida's courts have held that the intentional misconduct of one insured will only be imputed to an innocent co-insured where the insurance policy contains a clear statement that the misconduct of one insured abrogates the coverage of all insureds. See id.

The dispute between the Kattoums and NHIC had its genesis in an argument between Mr. and Mrs. Kattoum. After the argument, Mrs. Kattoum crashed Mr. Kattoum's Lincoln Town Car into the wall of their family-operated car wash. She claimed it was an accident; however, a police investigation of the incident concluded that it was intentional. Federated Mutual Insurance Company, which insured the building, paid the owner of the building for the damage and then sought reimbursement from the Kattoums. The Kattoums in turn sought coverage from NHIC under the liability portion of their automobile policy. Mr. Kattoum also made a claim under the collision coverage portion of the policy for the damage to his car. NHIC rejected the Kattoums' claims and filed a complaint for declaratory judgment citing a provision in its policy that NHIC claimed excluded coverage for damage intentionally caused by "any insured." Mr. Kattoum countered that he was an innocent co-insured and therefore the intentional conduct of his wife could not be attributed to him.

NHIC moved for summary judgment on the issue of whether Mr. Kattoum could raise the "innocent co-insured" defense. NHIC argued that the use of the words "any insured" in the intentional acts exclusion of its policy meant that the policy provided joint coverage rather than several coverage and thus, Mrs. Kattoum's actions were imputed to her husband, barring him from claiming innocent co-insured status. The trial court agreed and allowed the case to go to trial on the issue of whether Mrs. Kattoum's collision was an intentional act. The jury concluded that it was, and the trial court entered judgment for NHIC. After the trial, Mr. Kattoum moved for summary judgment on his counterclaim for damage to his Town Car. He argued that the intentional acts exclusion did not apply to the collision coverage portion of the policy. The trial court rejected this argument and ruled in favor of NHIC based on its conclusion that the entire NHIC policy was subject to the intentional acts exclusion.

In this appeal the Kattoums argue that the trial court erred in construing the NHIC insurance policy. The interpretation of an insurance contract is a question of law; accordingly, we review de novo the trial court's rulings. Biltmore Constr. Co. v. Owners Ins. Co., 842 So.2d 947, 949 (Fla. 2d DCA 2003). Part A of the Kattoums' policy provides liability coverage. The "exclusions" paragraph of Part A states, "[w]e do not provide Liability Coverage for any `insured' ... [w]ho intentionally causes ... `property damage.'" This language plainly excludes liability coverage for any insured who has intentionally caused property damage. It equally plainly does not take away the coverage of an innocent co-insured who did not intentionally cause that damage. This exclusion carefully limits its scope to insureds who intentionally cause damage leaving intact coverage for those insureds who did not participate in the intentional misconduct. See Sales v. State Farm Fire & Cas. Co., 849 F.2d 1383, 1386, n. 2 (11th Cir.1988); Haynes v. Hanover Ins. Co., 783 F.2d 136, 138 (8th Cir.1986); Montgomery Mut. Ins. Co. v. Dyer, 170 F.Supp.2d 618, 623-26 (W.D.Va.2001); Fuston v. Nat'l Mut. Ins. Co., 440 N.E.2d 751, 751-52, 754 (Ind.App.1982); K & W Builders, Inc. v. Merch. & Bus. Men's Mut. Ins. Co., 255 Va. 5, 495 S.E.2d 473, 478 (1998); see also Marvin L. Karp, Arson and the Innocent Co-Insured, 22-SPG Brief 8 (1993) (noting that where a policy states that the insurance company does "not provide coverage for any insured who has intentionally concealed or misrepresented any material fact ... [t]he meaning of [the] language (whether intended or not) could not be more clear: The only insured who is barred by the fraud is the insured who actually did the concealing or misrepresenting"); Richard K. O'Donnell, Imputation of Fraud and Bad Faith: The Role of the Public Adjuster, Co-Insured and Independent Adjuster, 22 Tort & Ins. L.J. 662, 686 (1987) (discussing the fraud clause appearing in the 7-77 edition of the ISO homeowner's forms which states: "We do not provide coverage for any insured who has intentionally concealed or misrepresented any material fact..." and noting that "[t]his `insured who' language unambiguously restricts the recovery bar to the guilty insured.").

The cases NHIC relies on to support its argument that the use of the words "any insured" unambiguously indicates that the policy provides joint coverage rather than several coverage are materially distinguishable because of the context in which the words "any insured" were used in the policies at issue in those cases. For example, in USAA Casualty Insurance Co. v. Gordon, 707 So.2d 1185, 1186 (Fla. 4th DCA 1998), the policy contained an exclusion section that stated that the company did not insure for, among other things "Intentional Loss." It defined...