Oak Ford Owners Ass'n v. Auto-Owners Ins. Co.

• Decision Date: 28 February 2007
• Docket Number: No. 8:05-CV-2136-T-27EAJ.,8:05-CV-2136-T-27EAJ.
• Parties: OAK FORD OWNERS ASSOCIATION, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Florida

Page 812

510 F.Supp.2d 812

OAK FORD OWNERS ASSOCIATION, Plaintiff, v. AUTO-OWNERS INSURANCE COMPANY, Defendant.

No. 8:05-CV-2136-T-27EAJ.

United States District Court, M.D. Florida, Tampa Division.

February 28, 2007.

Mindy L. Miller, Mindy L. Miller, P.A., Tampa, FL for Plaintiff.

William Scott Hamilton, Price, Hamilton & Price, Bradenton, FL, for Defendant.

ORDER

JAMES D. WHITTEMORE, District Judge.

BEFORE THE COURT are: 1) Defendant's Motion for Summary Judgment (Dkts.16, 25), to which Plaintiff has responded in opposition (Dkt.29); and 2) Plaintiff's Motion for Summary Judgment (Dkt.17), to which Defendant has responded in opposition (Dkt.27). Upon consideration, Defendant's motion is GRANTED and Plaintiff's motion is DENIED.

Background

Plaintiff Oak Ford Owners Association, Inc. ("Plaintiff') seeks a declaration that it has coverage under a general liability insurance policy underwritten by Defendant Auto — Owners Insurance Company ("Defendant"). Plaintiff is comprised of the Board of Directors for Phase 1 of the Oak Ford subdivision. Phase 1 of the development is a collection of 80 homesites located on five-acre tracts in Sarasota, Florida. (Cutler Dep. at 6). During the relevant time period, Plaintiff was insured under a Commercial General Liability policy ("CGL"), which included a Directors & Officers endorsement covering the negligent acts of Plaintiff's directors and officers ("D & O"), (Dkt.1, Exh. 1).

Plaintiff seeks coverage for sums it became liable for as a result of a dredging project it undertook on neighboring land. For a number of years preceding the events at issue, Oak Ford residents experienced drainage problems on their individual properties and Oak Ford common property, (Culter Dep. at 26-28). Frank Wesley, who was elected to the Board of Directors in November 2003, formed a Drainage Control Committee comprised of six persons, including himself, to identify the cause of the problem. (Wesley Dep. at 145, 148, 49). Based on their observations, the Committee members determined that Howard Creek, an adjacent waterway, was blocked and causing the drainage problems. (Wesley Dep. at 148; Culter Dep. at 32). The Committee did not seek the assistance of engineers or other environmental professionals in determining the cause of the flooding. (Wesley Dep. at 68). Howard Creek ran north to south, from property owned by the City of Sarasota to property owned by Hi Hat Ranch. (Kastner Dep. at 24). Rick Turner, the owner of Hi Hat Ranch, gave Plaintiff permission to dredge the creek to alleviate what was believed to be the cause of the flooding on Plaintiff's property. (Wesley Dep. at 85-86).

Between April 29, 2004 and May 27, 2004, Plaintiff dredged approximately 3.4 miles of Howard Creek. (Dkt. 17 at 5). Plaintiff's board of directors approved $5000 for the project. (Dkt. 17 at 5). Mr. Wesley rented a track hoe, which he and other Oak Ford residents used to remove fill¹ from the creek and place it on the bank. (Wesley. Dep. at 87, 90, 99, 101). Mr. Turner indicated where they could deposit the fill, so that he could use it at a later date. (Wesley Dep. at 95, 157). Plaintiff did not employ any contractors or subcontractors to perform the work. (Wesley Dep. at 102). Only one volunteer, Fernando Cocoilo, from whom the track hoe was rented, had any heavy equipment experience. (Wesley Dep. at 62). The track hoe was operated from the bank, with fill placed behind the machine as it progressed north to south along the creek. (Dkt. 22-2, Restoration Plan at 1). The fill piles were left at the edge of the creek, in some places reaching twelve to fifteen feet in height. (Kastner Dep. at 65, 79). However, in many places, the overall height of the fill piles included old fill from previous excavation. Specifically, there were 1.2 acres of new fill standing alone, 5.91 acres of new fill placed on old fill, and 2.39 acres of old fill standing alone. (Kastner Dep. at 146; Restoration Plan at 1-2). The overall result of the project was a widened and deepened creek. (Restoration Plan at 1; Kastner Dep. at 42). Ms. Kastner, a senior engineer with the SWFWMD, testified that she had never seen that type of volume removed in an unauthorized dig. (Kastner Dep. at 87). The creek was deepened, on average, two feet. (Kastner Dep. at 33).²

On May 12, 2004, Robert Keyser, an Oak Ford resident and former member of the board of directors, contacted the Southwest Florida Water Management District (SWFWMD) and the County of Sarasota ("County") about the project. (Keyser Dep. at 26-27; Dkt. 1, Exh. 4 at 3). Plaintiff had not obtained any of the necessary permits from SWFWMD or the County. (Dkt. 17 at 5). SWFWMD and the County investigated and initiated enforcement actions against Plaintiff, the City of Sarasota, and Hi Hat Ranch. (Dkt. 17 at 5). The project violated SWFWMD and County regulations, which prohibited removal of fill and placement of fill in wetland areas and tree lines. (Dkt. 1, Exh. 2, Notice of Ordinance Violation at 2; Kastner Dep. at 52, 54, 101; Pluta Dep. at, 37).

Following the investigation, Oak Ford, Hi Hat, and the City of Sarasota entered into consent decrees and a settlement agreement with SWFWMD and the County. (Dkt.1, Exhs.3-5). As part of the settlement, Plaintiff developed an approved restoration plan, which included replacing fill back into the creek in order to restore its former depth and width. (Restoration Plan at 4; Pluta Dep. at 72). Plaintiff paid $261,874.14 for engineering services, environmental consulting services, and contracting services to create and implement the restoration plan. (Dkt. 17 at 6). Plaintiff also paid $34,088 to SWFWMD for fines and penalties and $4,000 for enforcement costs. (Dkt. 17 at 6).³ Ms. Kastner testified that the penalty was based on a matrix that took into account the impact of Plaintiff's project on water quality, water quantity, and the wetland. (Kastner Dep. at 105-06). Plaintiff received $80,000 from the City and Hi Hat Ranch toward settlement of the actions. (Dkt. 17 at 6).

Standard

Summary judgment is proper if following discovery, the pleadings, depositions, answers to interrogatories, affidavits and admissions on file show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Fed.R.Civ.P. 56. "An issue of fact is `material' if, under the applicable substantive law, it might affect the outcome of the case." Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir.2004). "An issue of fact is `genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party." Id. at 160. All the evidence and factual inferences reasonably drawn from the evidence must be viewed in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Jackson v. BellSouth Telecomms., 372 F.3d 1250, 1280 (11th Cir. 2004).

Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific fasts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 323-24, 106 S.Ct. 2548. Plaintiff's evidence must be significantly probative to support the claims. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

The Court will not weigh the evidence or make findings of fact. Anderson, 477 U.S. at 249, 106 S.Ct. 2505; Morrison v. Amway Corp., 323 F.3d 920, 924 (11th Cir. 2003). Rather, the Court's role is limited to deciding whether there is sufficient evidence upon which a reasonable juror could find for the nonmoving party. Id.

Discussion

Plaintiff's claim turns on the language of the CGL policy and applicable exclusions and the D & O endorsement. Under Florida law, "[i]nsurance contracts are construed according to their plain meaning." See Taurus Holdings, Inc. v. U.S. Fid. and Guar. Co., 913 So.2d 528, 532 (Fla.2005). "[I]f the relevant policy language is susceptible to more man one reasonable interpretation, one providing coverage and the [other] limiting coverage, the insurance policy is considered ambiguous." Id. (citations omitted). Ambiguous coverage provisions are construed strictly against the insurer, and ambiguous exclusionary clauses "are construed even more strictly against the insurer than coverage clauses." Fayad v. Clarendon Nat. Ins. Co., 899 So.2d 1082, 1086 (Fla.2005). However, "[o]nly when a genuine inconsistency, uncertainty, or ambiguity in meaning remains after resort to the ordinary rules of construction is [this] rule apposite." Arawak Aviation, Inc. v. Indem. Ins. Co. of N. Am., 285 F.3d 954, 956 (11th Cir.2002) (quoting State Farm Mut. Auto. Ins. Co. v. Pridgen, 498 So.2d 1245, 1248 (Fla.1986)).

Plaintiff's policy included CGL coverage, which covers property damage, and a D & O endorsement, which the parties agree excludes coverage for property damage. Plaintiff's primary argument is that the claim does not involve property damage and that it is not excluded by the D & O endorsement. Defendant's primary argument is that the claim is property damage under the CGL, but is excluded from coverage. Thus, the threshold issue is whether the actions for which coverage is sought constitute "property damage." As discussed below, the Court finds that the relevant acts constitute property damage and therefore fall under the CGL policy.

1. Property damage

"Property damage" is defined by the CGL as "physical injury to tangible property, including all resulting loss of use of that property" or "loss of use of tangible property that is not physically injured." (CGL at 14). The...