Maxum Indem. Co. v. 3rd Generation Plumbing, Inc.
| Decision Date | 06 July 2018 |
| Docket Number | Case Number: 16-10044-CIV-MARTINEZ-GOODMAN |
| Parties | MAXUM INDEMNITY COMPANY, a Foreign Corporation, Plaintiff, v. 3RD GENERATION PLUMBING, INC., James Massaro and Maria Del Carmen Solis, as Personal Representative of the Estate of Pedro Jose Sanchez, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Eric Hiller, Sina Bahadoran, Michele Aimee Vargas, Clyde & Co., Miami, FL, John Joseph Cavo, Kaufman Dolowich & Voluck, Chicago, IL, for Plaintiff.
Christopher J. Lynch, Christopher J. Lynch, P.A., Howard Brodsky, Coral Gables, FL, Francisco R. Angones, Angones McClure & Garcia, Miami, FL, for Defendants.
ORDER GRANTING PLAINTIFF MAXUM INDEMNITY CO.'S MOTION FOR SUMMARY JUDGMENT [ECF No. 45] AND DENYING DEFENDANT ESTATE OF PEDERO JOSE SANCHEZ'S MOTION FOR SUMMARY JUDGMENT [ECF No. 46]
THIS CAUSE is before the Court on Plaintiff Maxum Indemnity Company ("Maxum")'s Motion for Summary Judgment [ECF Nos. 45] and Defendant Maria Del Carmen Solis, Personal Representative of the Estate of Pedro Jose Sanchez ("the Estate")'s Motion for Summary Judgment [ECF No. 46]. The Court has reviewed the motions, related briefing [ECF Nos. 58, 57, 60, 61], the record, and is otherwise duly advised in the premises. For reasons set forth below, the Court determines that Maxum is entitled to summary judgment in its favor. The Estate's motion is therefore denied.
At all relevant times, James Massaro ("Massaro") was the president, secretary and sole director of 3rd Generation Plumbing, Inc. ("3rd Generation"), a plumbing contractor with principal place of business in Monroe County, Florida. Maxum issued a commercial general liability policy (Policy No. BDG-0080104-02) that named 3rd Generation as the insured and covered the period from February 21, 2015 through February 21, 2016.
On May 15, 2015, Pedro Jose Sanchez ("Sanchez"), a laborer for 3rd Generation, was crushed by a backhoe on a job site and died as a result. It is undisputed that 3rd Generation maintained workers' compensation insurance and that its workers' compensation insurance carrier paid benefits to the Estate of Pedro Jose Sanchez. The Estate thereafter filed a wrongful death action in the Sixteenth Judicial Circuit in and for Monroe County against 3rd Generation and James Massaro, contending, in its original pleading, that the Defendants failed to provide and maintain a reasonably safe workplace in conformity with all applicable governmental safety standards and engaged in misconduct which was "substantially and virtually certain to result in injury or death to the decedent." On this premise, the Estate contended the defendants forfeited their ability to invoke workers' compensation immunity under the intentional tort exception of the Florida Workers' Compensation Act set forth at § 440.11(b) (2), Fla. Stat.1
After 3rd Generation was dismissed as a defendant from the state court suit, the Estate filed a Second Amended Complaint which named Massaro as sole defendant and dropped the "virtually certain" language previously pled to circumvent workers' compensation immunity. In this pleading, the Estate alleged that Massaro's negligent conduct (including his alleged alteration of equipment to bypass safety features which would have prevented Mr. Sanchez's death)2 constituted a willful violation of 29 U.S.C. § 666 (e),3 a provision of the Occupational Safety and Health Act (OSHA), applicable only to "employers," which criminalizes willful violations of any OSHA standard that results in the death of an employee. The Estate alleged that Massaro is liable for violating § 666(e) as an "employer," because of the "pervasive and total" control he exerted as a principal in the corporation, see United States v. Cusack , 806 F.Supp. 47 (D. N.J. 1992) (). Consequently, the Estate alleged that Massaro forfeited the protections of workers' compensation immunity by failing to avoid the commission of criminal law violations in the course of his managerial and policy-making duties undertaken on behalf of the corporation pursuant to § 440.11(1) (b) (2), Fla. Stat. [ECF No. 44-3, ¶ 15]. This exception to the Florida Workers' Compensation Act's exclusivity provision provides in relevant part:
The same immunity provisions enjoyed by an employer shall also apply to any sole proprietor, partner, corporate officer or director, supervisor, or other person who in the course and scope of his or her duties acts in a managerial or policymaking capacity and the conduct which caused the alleged injury arose within the course and scope of said managerial or policymaking duties and was not a violation of law, whether or not a violation was charged, for which the maximum penalty which may be imposed does not exceed 60 days' imprisonment as set forth in s. 775.082.
§ 440.11(1) (b) (2), Fla. Stat. Put another way, the Estate claimed that Massaro, acting in the course and scope of his managerial and policy-making duties as an executive officer of 3d Generation, became criminally liable for the commission of OSHA violations resulting in Mr. Sanchez's death and thereby forfeited workers' compensation immunity under operation of § 440.11(1)(b)(2).
Maxum assumed the defense of 3rd Generation and Massaro in the underlying tort action under a reservation of rights [ECF No. 1, ¶ 19], and then proceeded to file this declaratory judgment action to determine whether it is obligated to defend and indemnify Massaro and 3rd Generation in that proceeding. Maxum's initial complaint identifies various exclusions, definitions and conditions which it contends preclude coverage under the Policy for the claims asserted against Massaro in the underlying state court action.4
The relevant exclusions invoked in Maxum's instant motion for summary judgment are the Employer's Liability Exclusion and the Workers' Compensation Law Exclusion. Under the Employer's Liability Exclusion, the insurer is generally not liable for injuries that occur to employees while they are performing duties related to the insured's business. Under the Workers Compensation Law Exclusion, coverage does not extend to "any obligation of the insured under a workers' compensation ... law or similar law."
Maxum issued a policy extending commercial general liability coverage to 3rd Generation subject to certain terms, conditions, limitations, definitions, and exclusions ("the Policy"). The Policy provides limits of $1,000,000 per occurrence, subject to a $2500 per claim deductible for bodily injury. The relevant policy sections implicated in this summary judgment proceeding are found at Section I, Coverage A, "Bodily Injury and Property Damage Liability," Section II, "Who is an Insured," and Section IV, "Commercial General Liability Conditions."
Coverage A of the Policy sets forth the essential "Insuring Agreement" between the parties, and recites Maxum's undertaking "to 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." [Section I, Coverage A, ¶ 1.a] [ECF 44-6 p. 17]. The insurance applies to "bodily injury" and "property damage" only if it is caused by an "occurrence"5 that takes place in the defined coverage territory and during the policy period. [Section I, Coverage A, ¶ 1.b.]. By this agreement, Maxum further undertook "the right and duty to defend the insured against any ‘suit’ seeking those damages," but assumed "no duty to defend the insured against any ‘suit’ seeking damages for ‘bodily injury’ or ‘property damage’ to which this insurance does not apply." [Section I, Coverage A, ¶ 1.a].
At Section II ("Who Is An Insured"), the Policy defines who is eligible to claim the coverages extended under the Policy. Section II, ¶ 1, recites that the person or entity designated in the Declarations is an insured, in addition to certain categories of individuals associated with the operation of the named insured's particular form of business organization.
As relevant here, the Policy provides at Section II, ¶ 1.d:
Section I, Coverage A, Paragraph 2, of the Policy states in relevant part:
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