Lincoln Ins. Co. v. Home Emergency Services, Inc.

• Decision Date: 17 January 2001
• Docket Number: No. 3D99-1806.,3D99-1806.
• Citation: 812 So.2d 433
• Parties: LINCOLN INSURANCE COMPANY, Appellant, v. HOME EMERGENCY SERVICES, INC., Keller Ladders, Inc., Albert Milian, Rose Milian, Home Depot USA, Inc., and PCA Solutions, Inc., Appellees.
• Court: Florida District Court of Appeals

812 So.2d 433

LINCOLN INSURANCE COMPANY, Appellant, v. HOME EMERGENCY SERVICES, INC., Keller Ladders, Inc., Albert Milian, Rose Milian, Home Depot USA, Inc., and PCA Solutions, Inc., Appellees.

No. 3D99-1806.

District Court of Appeal of Florida, Third District.

January 17, 2001.

Opinion on Rehearing March 6, 2002.

George, Hartz, Lundeen & Fulmer and Esther E. Galicia (Ft.Lauderdale), for appellant.

Langbein & Langbein and Evan J. Langbein (Aventura); Kenneth E. Cohen, for appellees.

Before SCHWARTZ, C.J., and LEVY and GREEN, JJ.

Opinion on Rehearing En banc March 6, 2002.

PER CURIAM.

This is an appeal from a Summary Final Judgment entered against Lincoln Insurance Company ("Lincoln") on the basis that the general liability policy issued to Home Emergency Services, Inc. (HES) provides coverage for, and the duty to defend and indemnify, a spoliation of evidence claim which was filed against HES.

Lincoln issued a general liability policy to HES that provides coverage for any "bodily injury" or "property damage" liability which HES becomes legally obligated to pay. Albert Milian ("Milian"), a HES employee during the coverage period in question, was injured when a ladder (manufactured by Keller Ladders, Inc. and purchased by HES at Home Depot USA) collapsed causing him to fall. Milian collected workers' compensation benefits for his injuries and later filed a products liability action against Keller Ladders and Home Depot, the manufacturer and distributor of the ladder, for his injuries. In his Complaint, Milian also claimed damages against HES for spoliation of evidence. The Complaint sets out a claim for Spoliation of Evidence and for Statutory Violations under section 440.39(7), which requires employers to aid the plaintiff in all third party actions undertaken by the plaintiff for injuries sustained while employed. Specifically, Milian alleged that HES entered into an agreement with Milian's counsel to maintain the ladder in its possession during the pendency of the proceedings and that HES negligently or intentionally destroyed or abandoned said evidence.

Lincoln filed this declaratory action to determine its duties and responsibilities for the claims alleged against HES. Subsequently, Lincoln moved for Final Summary Judgment alleging that Milian's spoliation of evidence claims against HES were not covered under the policy and, therefore, Lincoln was not obligated to defend the claims against HES. HES responded with its own Motion for Summary Judgment alleging that Lincoln had a duty to defend on the spoliation claims. The trial court denied Lincoln's Motion for Summary Judgment and granted HES' cross-motion finding that the policy covered the Milian's claims against HES. We reverse, concluding that the policy does not provide coverage for the spoliation claims.

A claim for spoliation of evidence has been recognized in Florida jurisprudence as an independent cause of action for negligence where a party is unable to prove their case due to the loss or destruction of key evidence. See Bondu v. Gurvich, 473 So.2d 1307 (Fla. 3d DCA 1984)

; see also Miller v. Allstate Ins. Co., 573 So.2d 24 (Fla. 3d DCA 1990). Because of the nature of the claim, liability for spoliation does not arise until the underlying action is completed. See Continental Ins. Co. v. Herman, 576 So.2d 313 (Fla. 3d DCA 1990). A spoliation claim, therefore, compensates the plaintiff for the loss of recovery in the underlying case due to the plaintiff's inability to prove the case because of the lost or destroyed evidence and not for the "bodily injury" or "property damages" actually sustained. The Fourth District Court of Appeal has described the basis of a cause of action for spoliation of evidence as "an intangible and beneficial interest in the preservation of the evidence." DiGiulio v. Prudential Prop. & Cas. Co., 710 So.2d 3 (Fla. 4th DCA 1998)(emphasis supplied).

Milian's Complaint seeks damages from the manufacturer and distributor of the ladder for "bodily injuries" sustained when he fell from the ladder. Alternatively, Milian claims that any inability to prove the underlying products liability claim is due to HES' negligence in destroying or losing crucial evidence. In essence, the damages sought against HES stem from the "bodily injury" suffered in the underlying claim but which Milian is unable to prove because of the lost or destroyed evidence. The claims raised against HES, therefore, seek damages for injuries on the theory that HES damaged Milian's ability to fully recover his damages in the underlying products liability claim against the manufacturer and distributor of the ladder. In considering whether a party has a duty to defend an underlying suit, the trial court is limited to reviewing the allegations raised by the underlying Complaint and the pertinent contract or policy between the parties. See McCreary v. Florida Residential Prop. & Cas. Joint Underwriting Ass'n, 758 So.2d 692 (Fla. 4th DCA 1999)

. We recognize that the duty to defend and the duty to indemnify are distinct and that the analysis is different, however, for purposes of our analysis here the concern is with whether a spoliation claim is one covered under the general liability policy and not so much with the distinction between the two duties. If the spoliation claim is not covered under the policy, there can obviously be no duty to defend.

Lincoln's policy provides that the insurer "will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury' or `property damage' to which th[e] insurance applies." The policy defines "bodily injury" as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time." "Property damage" is defined as "[p]hysical injury to tangible property, including all resulting loss of use of that property."

Recently in Norris v. Colony Ins. Co., 760 So.2d 1010 (Fla. 4th DCA 2000), the Fourth District Court of Appeal considered a similar issue, under the terms of a comparable policy, and determined that a spoliation claim is not covered as "bodily injury" or "property damage" in a general liability contract. The Court explained that pursuant to the policy, "bodily injury" or "property damage" must be caused by an "occurrence", or accident. The Court found that because there was no link between the "occurrence", i.e., the destruction of evidence, and the "bodily injury", the spoliation claim does not come within the coverage contemplated by the insurance contract. The Court then considered the issue of whether the destruction of the evidence caused "property damage" within the limits of the policy. The Court first noted a provision in the policy excluding damage to the insured's own property. Then, looking to the definition of "property damage", the Court held that there was no damage to tangible property and, therefore, there was no coverage for the spoliation claim. Applying the Fourth District's analysis to the instant case, we find that the spoliation claim is not covered under the policy. With regard to coverage for "bodily injuries", we find that the causal relation between the "bodily injuries" sustained and the destruction of property is lacking, thereby precluding coverage for "bodily injuries" under the policy. With regard to coverage for damage to the destroyed evidence, we find that the only possible interest to the plaintiff is an intangible interest which is excluded from coverage. Consequently, there is also no coverage for "property damage".

Accordingly, we reverse the Final Summary Judgment entered below and hold that the policy does not provide coverage for the damages sought against HES. The matter is remanded with instructions to enter Final Summary Judgment in favor of Lincoln consistent with our holding. Our decision today in no way limits HES' responsibility to the plaintiff.

Reversed and remanded with instructions.

LEVY and GREEN, JJ., concur.

SCHWARTZ, Chief Judge (dissenting).

The approach to policy interpretation taken by Norris and the majority in this case embodies the kind of pettifoggery and hairsplitting which would have undoubtedly delighted Miss Snow,¹ my seventh grade English teacher, who taught us how to rip sentences into unrecognizable (but diagrammable) shreds. It is, unfortunately, completely contrary to the way insurance contracts are supposed to be construed. Berkshire Life Ins. Co. v. Adelberg, 698 So.2d 828, 830 (Fla.1997)("[The insured] was entitled to a clear explanation of terms rather than a fine distinction which was never written into his contract for insurance coverage.")²; Stuyvesant Ins. Co. v. Butler, 314 So.2d 567 (Fla.1975); Firemans Fund Ins. Co. v. Boyd, 45 So.2d 499 (Fla.1950); Poole v. Travelers Ins. Co., 130 Fla. 806, 179 So. 138 (1937).

What is more, the opinions are wrong even on their own terms. Both are bottomed upon the conclusion that there is no coverage because the claim for bodily injury³ was not caused by "this occurrence, the destruction of evidence," Norris, 760 So.2d at 1012 [e.s.]; see majority slip opinion at 6 ("we find that the causal relation between the `bodily injuries' sustained and the destruction of property is lacking, thereby precluding coverage for `bodily injuries' under the policy"). Again unfortunately, that is not what the policy says. It actually provides that the bodily injury must be caused by "an occurrence," defined as "an accident."⁴[e.s.] Because, even when policy interpretation is not involved, and all the more when it is, the term "an" or "a" means "any," State v. Hershkowitz, 714 So.2d 545 (Fla. 3d DCA 1998); Izadi v. Machado Ford, Inc., 550 So.2d 1135, 1138 n. 3 (Fla. 3d DCA 1989); United States Fidelity & Guaranty Co. v. State Farm Mut. Auto. Ins. Co., 369 So.2d 410 (Fla. 3d DCA 1979), the "occurrence" or "accident" referred to must include the July 7, 1995 ladder collapse which injured the plaintiff, rather than only the...