Keenan Hopkins Schmidt v. Continental Cas.
| Decision Date | 01 September 2009 |
| Docket Number | Case No. 2:07-cv-383-FtM-34DNF. |
| Citation | 653 F.Supp.2d 1255 |
| Parties | KEENAN HOPKINS SCHMIDT AND STOWELL CONTRACTORS, INC., a Florida corporation, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, Defendant. |
| Court | U.S. District Court — Middle District of Florida |
Mark A. Boyle, Sr., Debbie Sines Crockett, Boyle & Gentile, PA, Ft. Myers, FL, for Plaintiff.
Anthony A.B. Dogali, Jacqueline Taylor, Haley R. Maple, Lee William Atkinson, Forizs & Dogali, PL, Tampa, FL, for Defendant.
Before the Court is Defendant Continental Casualty Company's Motion for Summary Judgment and Incorporated Memorandum of Law (Doc. No. 89), to which the Plaintiff has filed its Response and Memorandum of Law in Opposition (Doc. No. 113). At the Court's request, the Defendant also filed a reply brief (Doc. No. 124); Plaintiff, with permission, then filed a surreply (Doc. No. 132). The motion, having been amply briefed, is ripe for consideration. Pursuant to Local Rule 3.01(j), Plaintiff has requested oral argument on the motion (Doc. No. 114), but the Court finds that oral argument would not be of assistance in resolving the motion. That request is therefore denied.
Further, for the reasons explained below, the Court finds that the Defendant has established that it is entitled to summary judgment. The pending motion will therefore be granted and this matter dismissed.
The Plaintiff, Keenan Hopkins Schmidt and Stowell Contractors, Inc. ("Keenan"), filed suit in state court against the Defendant, Continental Casualty Company ("Continental"), for declaratory relief and for damages caused by Continental's alleged breach of its insurance contract with Keenan. This case arises out of an earlier suit ("Underlying Case") brought by Disney Vacation Development, Inc. ("Disney") against McDevitt Street Bovis ("Bovis") for faulty construction of the Disney Boardwalk (hereinafter, the "Boardwalk" or "project site"). Bovis, believing that Keenan was responsible for some of the faulty construction that formed the basis of Disney's complaint, impleaded Keenan into the Underlying Case. In the present suit, Keenan claims that it tendered the defense and requested indemnification in the Underlying Case from its insurers, including Continental, but that Continental wrongfully refused to defend or to indemnify Keenan. Keenan now urges this Court to issue a judicial declaration that Continental failed to abide by the terms of the insurance contract in effect between Continental and Keenan, and further requests that this Court order Continental to contribute its pro-rata share of the legal fees and settlement costs Keenan and its other insurers incurred in the Underlying Case. After removing the case to federal court, Continental filed the present motion for summary judgment.
This action arises out of disputes regarding construction defects and damages affecting Disney's Boardwalk. On August 15, 1994, Disney contracted with Bovis as the general contractor to build the Boardwalk. Bovis then subcontracted with Keenan, among other subcontractors. Schedule A to the subcontract between Keenan and Bovis lists a number of items that Keenan was obligated to "furnish and install," including but not limited to:
All exterior architectural trim and surrounds....
....
All exterior architectural: GFRC, Polygarde woodwork, plastic, FRP, trim....
....
All exterior wall and roof, metal and wood framing. Wood framing as it applies to plywood at metal framing and corrugated metal decks.
....
All soffits, eave, fascia, rakes, entablatures, cornices, etc., architectural elements at the envelopes of the buildings and site structures....
(Doc. 91-4, Keenan-Bovis Subcontract, at 11.)
On September 7, 1995, Lyle Painting, the painting subcontractor, contacted Bovis regarding paint failures and delays caused by defective "wood trim." (Doc. 91-6, 9/7/1995 Message from Lyle Painting.) Bovis identified Keenan as the party that had installed the defective "wood trim" and then advised Keenan that it was responsible for resolving the problem. (Doc. 91-7, 9/18/1995 Letter from Bovis to Keenan.)
On October 11, 1995, Disney sent a letter to Bovis regarding extensive water intrusion "through the roofs, exterior facades, expansion joints, unsealed and open slab penetrations, etc.," and stated that "[t]he source of these problems is directly tied to completion of the roofs and exterior facades." (Doc. 91-9, 10/11/1995 Letter from Disney to Bovis.) This letter described the chaotic situation at the project site and attributed much of the delay in the completion of the roof and exterior facades to the lack of coordination between Bovis and its many sub-contractors, including Keenan. Disney attributed Bovis' inability to "complete the roofing and exterior facades for this project" to a widespread lack of "manpower" on the part of some of the sub-contractors, including Keenan. (Id.) As a result of delays in completing roofing and exterior facades, "drywall, inwall insulation, and wall finishes [we]re being affected by water intrusion." (Id.)
Disney and Bovis executed a "Close-out Change Order" on August 30, 1997 (Doc. 91-23), pursuant to which Disney agreed to release various claims it had against Bovis, while specifically reserving its right to enforce the obligations contained in the Close-Out Change Order. Attachment H to the "Close-out Change Order" reserves in pertinent part:
4. Paint Defects—Repair or replacement of exterior paint defects including:
(i) building decorative shutters;
(ii) balcony divider partitions and running trim;
(iii) exterior façade (e.g., blistering, peeling and premature fading).
...
6. Roof Leaks—Repair and replacement of areas of roof where water penetration is occurring....
(Doc. 91-23, at 55.) Keenan was then directed to attend a meeting with Bovis and Disney on October 27, 1997 to resolve the issues caused by the defective "paint or the wood products" supplied by Keenan's sub-contract. (See 10/21/1997 Letter from Bovis to Keenan, Doc. 91-20 ().) A letter dated October 28, 1997 from Bovis to an attorney for Keenan documents that Keenan failed to attend the meeting. That letter documents Bovis' frustration with Keenan's refusal to deal with issues caused by its work:
My greater concern is the failure of Keenan Hopkins Schmidt & Stowell to attend the meeting which we had requested they attend with the Owner yesterday to deal with outstanding warranty items, particularly those contained in exhibit H of the close out change order.
On June 9, 2000, Disney filed a complaint in Florida state court against Bovis, asserting claims for breach of contract based on deficient workmanship relating to the project. (Doc. No. 91-24, Disney Compl.) Bovis, in turn, tendered the defense to and demanded indemnification from Keenan on August 29, 2002. (Doc. No. 91-25.) Keenan claims that, prior to this tender, it had no knowledge that Disney had sued Bovis. Despite the tender in 2002, Keenan also claims that it had "no information" that Bovis actually intended to seek damages from Keenan until November 9, 2004, when Bovis filed a Third-Party Complaint against Keenan in the Underlying Case for contractual indemnity, common-law indemnity, contribution, and breach of contract. (Doc. No. 91-22, Bovis 3d Party Compl.) Bovis specifically alleged that the work performed and/or the materials provided by Keenan "caused damages including but not limited to damages to tangible property other than the work performed under the subcontract from Bovis stemming from the alleged acts and/or omissions within the scope of the work of [Keenan]." (Doc. No. 113, at 4-5 (quoting Bovis Compl. against Keenan in Underlying Case).) Bovis and Keenan settled in October 2007.
At all times relevant to this dispute, Keenan possessed insurance coverage under the following commercial general liability ("CGL") policies: (1) a policy issued by the Zurich family of insurers in effect from 1995 to 1997 (hereinafter, "Zurich Policy") (Doc. No. 112-7); (2) a policy issued by Travelers Indemnity Company and the Aetna Casualty and Surety Company in effect from 1997 through 2000 ("Travelers Policy") (Doc. No. 112-9); and (3) a series of policies issued by Defendant Continental in effect from February 1, 2000 until October 2003 ("the Policy" or "Continental Policy") (Doc. No. 91-3, 112-2, 112-3, 112-4, 112-5, 112-6). Without actually addressing why, Keenan asserts that the Continental Policy in effect from February 1, 2000 through January 1, 2001 is the Policy that covers the loss for which Keenan now seeks reimbursement, and that is the policy term upon which the parties here have focused. As discussed below, the Continental Policy covers losses "discovered" by the injured party during the Policy period. The Court therefore assumes that Keenan focuses on the 2000 Policy because it is clear that Disney, the injured party, necessarily had knowledge of the property damage at issue no later than June 9, 2000, the day it filed suit against Bovis.
Each of the above-referenced policies insured Keenan for up to $2,000,000 for "General Aggregate Limit (Other than Products-Completed Operations)," up to $2,000,000 for "Products-Completed Operations Aggregate Limit," and $1,000,000 for "Each Occurrence Limit." (Continental Policy at 2; Zurich Policy at 2; Travelers Policy at 14.)
Keenan placed all of its insurers on notice of Bovis' complaint on December 27, 2004. Continental responded on October 31, 2005 by issuing a letter to Keenan stating that it would not provide a defense or indemnity. (Doc. 91-33.) Keenan was ultimately defended in the Underlying Case by Zurich and Travelers, and these insurers collectively spent a large sum of money in...
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