Koikos v. Travelers Ins. Co.

• Decision Date: 06 March 2003
• Docket Number: No. SC01-301.,SC01-301.
• Parties: George N. KOIKOS, Appellant, v. TRAVELERS INSURANCE COMPANY, et al., Appellees.
• Court: Florida Supreme Court

849 So.2d 263

George N. KOIKOS, Appellant, v. TRAVELERS INSURANCE COMPANY, et al., Appellees.

No. SC01-301.

Supreme Court of Florida.

March 6, 2003.

Rehearing Denied July 1, 2003.

M. Stephen Turner, David K. Miller, and Kelly O'Keefe of Broad and Cassel, Tallahassee, for Appellant.

John P. Joy and Jane Anderson of Walton, Lantaff, Schroeder & Carson, West Palm Beach, for Appellees.

Tracy Raffles Gunn of Fowler, White, Gillen, Boggs, Villareal & Banker, P.A., Tampa, for amicus curiae Florida Defense Lawyers Association.

Richard A. Barnett, Hollywood, for amicus curiae Academy of Florida Trial Lawyers.

Fred H. Flowers, Tallahassee, for Intervenor Brian Armstrong.

Robert Scott Cox of Cox & Burns, P.A., Tallahassee, for Intervenor D'Juan Harris.

PARIENTE, J.

We have for review a question of Florida law certified by the United States Court of Appeals for the Eleventh Circuit in Koikos v. Travelers Insurance Co., 240 F.3d 1331, 1332-33 (11th Cir.2001), that is determinative of a cause pending in that court and for which there appears to be no controlling precedent. We have jurisdiction, see art. V, § 3(b)(6), Fla. Const., and rephrase the certified question as follows:

WHEN THE INSURED IS SUED BASED ON NEGLIGENT FAILURE TO PROVIDE ADEQUATE SECURITY ARISING FROM SEPARATE SHOOTINGS OF MULTIPLE VICTIMS, ARE THERE MULTIPLE OCCURRENCES UNDER THE TERMS OF AN INSURANCE POLICY THAT DEFINES OCCURRENCE AS "AN ACCIDENT, INCLUDING CONTINUOUS OR REPEATED EXPOSURE TO SUBSTANTIALLY THE SAME GENERAL HARMFUL CONDITIONS"?¹

For the reasons that follow, we conclude that under the terms of the general liability policy at issue in this case, each shooting of a separate victim constitutes a separate occurrence. Therefore, we answer the certified question in the affirmative.

BACKGROUND

George N. Koikos, the insured, is the owner of a restaurant where shootings occurred that resulted in multiple injuries. The Eleventh Circuit's opinion sets forth the facts of the underlying case as follows:

On April 25, 1997, George Koikos rented his restaurant to the Florida A & M chapter of Alpha Kappa Psi Fraternity for a graduation party. During the party, Charles Bell and Antonio Anderson attempted to enter the restaurant. They were turned away after a heated exchange with several fraternity members who were collecting an admission charge for the affair. When Bell and Anderson returned a few minutes later, a fight broke out in the restaurant's lobby between Anderson and some of the fraternity members gathered there. After Anderson was knocked to the ground, Bell brandished a handgun and began firing as he helped Anderson to his feet.

Bell fired in two separate—but nearly concurrent—rounds. Brian Armstrong and DeJuan Harris were each hit by a single bullet while standing in the lobby. In addition, three other guests were injured. The record indicates that the shots injuring Armstrong and Harris came from the first round of shots.

Koikos, 240 F.3d at 1331.

The two shooting victims, Harris and Armstrong, filed separate lawsuits in state court against Koikos claiming negligent failure to provide security. Koikos in turn brought a declaratory action in state court against Travelers Insurance Company, which removed the case to the United States District Court for the Northern District of Florida.

In the declaratory judgment proceedings, the parties filed cross-motions for summary judgment, essentially asking the federal district court to decide whether the underlying shooting incident constituted one occurrence, subject to a limit of $500,000, or comprised two separate occurrences, for which Travelers would be liable for $500,000 per occurrence. Travelers asserted that the injuries resulted from Koikos's alleged negligence and that the negligence constituted a single "occurrence" under the terms of the policy. Koikos argued that the force that caused the injuries was the gunshots and, therefore, each shot injuring a victim was a separate occurrence.

The federal district court judge ruled that as a matter of law the underlying shooting incident constituted one occurrence. The district court judge reasoned that the claims at issue arose out of one basic event or series of events for which the insured was allegedly liable. Based on the fact that Koikos's liability arose out of his alleged negligence in failing to provide adequate security for the victims on the evening in question, the judge concluded that the underlying shooting incident constituted a single occurrence.

Koikos appealed the judge's ruling to the Eleventh Circuit, relying primarily upon American Indemnity Co. v. McQuaig, 435 So.2d 414 (Fla. 5th DCA 1983). The Eleventh Circuit concluded that McQuaig did not resolve the issue in this case for two reasons:

First, it is unclear what effect—if any— this policy's definition of "occurrence" would have under Florida law. Second, it is unclear whether in using the "cause theory," we should focus on Koikos's alleged negligence or on Bell's separate gunshots. Furthermore, decisions of other Florida courts are difficult to square with the court's approach in McQuaig. See, e.g., Southern Int'l Corp. v. Poly Urethane Indus., Inc., 353 So.2d 646 (Fla.Dist.Ct.App.1977) (holding that defective application of roof sealant to several buildings over the course of several days was a single occurrence).

Koikos, 240 F.3d at 1332. Having determined that this case involved an unanswered question of state law and having found no clear, controlling precedent in the decisions of this Court, the Eleventh Circuit certified the question of law to this Court. See id.

ANALYSIS

The focus of the certified question is whether the incidents that gave rise to the litigation constitute one occurrence, or multiple occurrences as that term is defined in the policy of liability insurance issued by Travelers to Koikos, the insured. The resolution of a dispute regarding insurance coverage begins with a review of the plain language of the insurance policy as bargained for by the parties. See Prudential Prop. & Cas. Ins. Co. v. Swindal, 622 So.2d 467, 470 (Fla.1993). Thus, the Eleventh Circuit's first inquiry—the "effect—if any" of the policy's definition of "occurrence"—constitutes the threshold question.

The terms of the "Commercial General Liability" policy issued by Travelers to Koikos provide in pertinent part:

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies.

....

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "bodily injury" or "property damage" is caused by an "occurrence" that takes place in the "coverage territory."

(2) The "bodily injury" or "property damage" occurs during the policy period.

The Policy Declarations provide that the "Each Occurrence Limit" is $500,000. The policy explains that the "Each Occurrence Limit is the most we will pay for damages and medical expenses because of all `bodily injury' or `property damage' arising out of any one occurrence." There is also a "General Aggregate Limit" of $1,000,000 that is the limit of insurance for each annual twelve-month period.²

"Occurrence" is defined in the policy as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." However, the term "accident" is not itself defined in the policy. In State Farm Fire & Casualty Co. v. CTC Development Corp., 720 So.2d 1072 (Fla.1998), we had occasion to discuss the use of the term "accident" in general liability insurance policies:

The difficulty in precisely defining the scope of coverage in liability policies providing coverage for "accidents" is not a problem of recent vintage.... [F]ew insurance policy terms have "provoked more controversy in litigation than the word `accident.'" In the forty-five years since [Hardware Mutual Casualty Co. v.] Gerrits [65 So.2d 69 (Fla.1953)], the courts of this state have given varying interpretations and definitions to the term "accident," when not otherwise explicitly defined or clarified by language in the policy itself....

....

The policy in this case, like the policy in Gerrits, leaves the term "accident" undefined. The lack of a definition of an operative term in a policy does not necessarily render the term ambiguous and in need of interpretation by the courts. However, where policy language is subject to differing interpretations, the term should be construed liberally in favor of the insured and strictly against the insurer. In addition, "when an insurer fails to define a term in a policy, ... the insurer cannot take the position that there should be a `narrow, restrictive interpretation of the coverage provided.'"

In this case, we conclude that the term "accident" within a liability policy is susceptible to varying interpretations and should be construed in favor of the insured. Rather than defining the term most favorably to the insured, this Court in its 1953 Gerrits opinion adopted a more restrictive definition—a definition that was improperly derived from tort law. Moreover, the definition of "accident" set forth by this Court in Gerrits is contrary to the standardized language found in comprehensive general liability policies since 1972. We therefore recede from Gerrits and its outmoded definition of "accident" in liability policies.

We hold that where the term "accident" in a liability policy is not defined, the term, being susceptible to varying interpretations, encompasses not only "accidental events," but also injuries or damage neither expected nor intended from the standpoint of the insured. This definition comports with the language used in standard comprehensive general liability policies and with the definition of the term "accidental" set forth in Dimmitt [Chevrolet, Inc. v. Southeastern Fidelity Ins. Corp., 636 So.2d 700 (Fla.1993),] as "unexpected or unintended."

Id. at 1075-76 (...