Pacific Employers Ins. v. Wausau Business Ins.

• Decision Date: 14 June 2007
• Docket Number: No. 3:05-cv-850-J-16TEM.,3:05-cv-850-J-16TEM.
• Citation: 508 F.Supp.2d 1167
• Parties: PACIFIC EMPLOYERS INSURANCE COMPANY, and Berman Brothers, Inc., a Florida Corporation, Plaintiffs, v. WAUSAU BUSINESS INSURANCE COMPANY, a Wisconsin Insurance Company, and Employers Insurance of Wausau, a mutual company, Defendants.
• Court: U.S. District Court — Middle District of Florida

508 F.Supp.2d 1167

PACIFIC EMPLOYERS INSURANCE COMPANY, and Berman Brothers, Inc., a Florida Corporation, Plaintiffs, v. WAUSAU BUSINESS INSURANCE COMPANY, a Wisconsin Insurance Company, and Employers Insurance of Wausau, a mutual company, Defendants.

No. 3:05-cv-850-J-16TEM.

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

June 14, 2007.

Angelia Lucille Mercer, B. Richard Young, Young, Bill, Fugett & Roumbos, PA, Pensacola, FL, Joseph Stroud, Jr., Rogers Towers, PA, Jacksonville, FL, for Plaintiffs.

Thomas Edward Bishop, Tanner Bishop, Jacksonville, FL, for Defendants.

ORDER

JOHN H. MOORE, II, District Judge.

This matter comes before the Court upon Plaintiffs (Pacific Employers Insurance Company ("Pacific") and Berman Brothers, Inc. ("Berman")) filing of Motion for Summary Judgment (Dkt. 80) (the "Motion"). Defendants (Wausau Business Insurance Company ("Wausau Business") and Employers Insurance of Wausau ("Employers") (collectively, "Defendants")) filed a Response in Opposition (Dkt. 100) (the "Response").

I. Background

On August 18, 2000, Mr. Hart was injured while working at Berman. Mr. Hart was assigned to work at Berman by Action Labor, an employment agency. At the time of Mr. Hart's accident, Action Labor was insured by Pacific¹ and Berman had two insurance policies in place with Defendants (the "Wausau Policies").² Mr. Hart filed a suit for damages stemming from his injuries in Florida's Fourth Judicial Circuit (the "Florida Action").³ Defendants denied coverage under their policies but continued briefly to defend Berman under a reservation of rights. On May 29, 2003, Defendants tendered defense of Berman to Pacific. Due to an "Alternate Employer Endorsement" providing coverage to Berman of $500,000 per accident, Pacific accepted coverage without a reservation of rights and agreed to defend and indemnify Berman. On June 10, 2004, a $2,913,574.28 award was entered against Berman in the Florida Action. On February 16, 2006, following all appeals of the Florida Action,⁴ Berman assigned Pacific all rights to pursue all claims against Defendants.

On August 17, 2005, prior to assigning Pacific all rights to pursue claims against Defendants, Berman filed a declaratory judgment action against Wausau Business in Florida's Fourth Judicial Circuit. Citing diversity as grounds for jurisdiction, Wausau Business removed the case to federal court on September 8, 2005. (Dkt. 1). On July 31, 2006, Berman filed an Amended Complaint (Dkt. 23) that added Pacific as an additional Plaintiff to the action and Employers as an additional Defendant. The Amended Complaint asked the Court to determine Defendants' obligations to Berman and Pacific under the applicable Wausau Policies.

On April 2, 2007, Plaintiffs filed the Motion asking the Court to grant them summary judgment on the issues raised in the Amended Complaint. Specifically, Plaintiffs claim that they are entitled to summary judgment on the issue of whether Defendants owe coverage to Berman for Mr. Hart's injury because as a "temporary worker" he was covered under the Wausau Policies and they also claim that the Defendants' affirmative defenses are inapplicable to the instant action. (Dkt. 80 at p. 1).

Defendants respond that there are genuine issues as to material fact that preclude summary judgment, including whether "(1) [Mr. Hart] was a "temporary" worker entitled to coverage; (ii) [Mr. Hart] was a direct or a `leased worker' employee excluded from coverage; (iii) and, Berman's prior admission that it was [Mr. Hart's]. worker's compensation statutory employer bar[s] coverage." (Dkt. 100 at p. 1). Defendants further claim that their third, fourth, seventh, twenty-eighth, thirty-first, thirty-sixth and thirty-seventh affirmative defenses are valid.

II. Summary Judgment Standard

Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, 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." Fed.R.Civ.P. 56(c).

In determining whether to grant summary judgment, the Court must view the evidence and inferences drawn from the evidence in the light most favorable to the non-movant and resolve all reasonable doubts in that party's favor. Augusta Iron & Steel Works, Inc. v. Employers Ins. of Wausau, 835 F.2d 855, 856 (11th Cir.1988); WSB-TV v. Lee, 842 F.2d 1266, 1270 (11th Cir.1988). The Eleventh Circuit explained in Lee that:

In deciding whether an inference is reasonable, the Court must "cull the universe of possible inferences from the facts established by weighing each against the abstract standard of reasonableness." [citation omitted]. The opposing party's inferences need not be more probable than those inferences in favor of the movant to create a factual dispute, so long as they reasonably may be drawn from the facts. When more than one inference can be reasonably drawn, it is for the trier of fact to determine the proper one.

Id.

Thus, if a reasonable fact finder evaluating the evidence could draw more than one inference from the facts, and if that inference introduces a genuine issue of material fact, then the court should not grant the summary judgment motion. See Augusta Iron & Steel Works, Inc., 835 F.2d at 856.

In ruling on a motion for summary judgment, it is well-established that the court may neither adjudge the credibility of the witnesses nor weigh the evidence. See Pita v. State Street Bank and Trust Co., 666 So.2d 268, 268 (Fla.3d Dist.Ct.App. 1996) (holding that "[o]n a motion for summary judgment, it is settled that a trial court is not permitted to weigh material conflicting evidence or pass upon the credibility of the witnesses."); Juno Indus, Inc. v. Heery Int'l, 646 So.2d 818, 822 (Fla. 5th Dist.Ct.App.1994) (stating that "[t]he trial court may not determine factual issues nor consider either the weight of the conflicting evidence or the credibility of witnesses in determining whether a genuine issue of material fact exists in a summary judgment proceeding."); Shapiro v. Barron, 538 So.2d 1319, 1320 (Fla. 4th Dist.Ct.App.1989) (reasoning that "[j]udging the credibility of witnesses or weighing the evidence are not proper subjects of a motion for summary judgment."); Kuczkir v. Martell, 480 So.2d 700, 701 (Fla. 4th Dist.Ct.App.1985) (stating that "[w]here the issue of credibility is present, summary judgment is inappropriate."); State Farm Mut. Auto. Ins. Co. v. Gant, 460 So.2d 912, 913 (Fla.2d Dist.Ct.App.1984) (holding that "[i]t goes without saying that a trial judge may not, on motion for summary judgment, make evidentiary determinations involving the credibility of witnesses."); Strickland v. Strickland, 456 So.2d 583, 584 (Fla.2d Dist.Ct.App.1984) (reasoning that "[a] trial judge may not, on a motion for summary judgment, make determinations involving the weight of the evidence or the credibility of witnesses.").

III. Undisputed Facts

The Parties

Berman is a scrap metal company located in Jacksonville, Florida founded in the late 1940's by Mr. Milton Berman. (Charles Berman Depo., p. 10, lines 12-19). Pacific is a Pennsylvania corporation doing business in the State of Florida (Dkt. 23, ¶ 5) and is a member of the ACE Group of companies. (Dkt. 100-11 at p. 1). Wausau Business and Employers are both Wisconsin corporations doing business in the State of Florida. (Dkt. 23, ¶¶ 3-4). Action Labor is an employment or staffing agency, headquartered in West Palm Beach, Florida with local branches in Florida cities, including Jacksonville, Florida. (T. Brown Depo., p. 31, line 25 — p. 32, lines 1-2; p. 32, lines 5-25 — p. 33, lines 1-4).⁵ Action Labor specializes in providing industrial clients with daily workers. (T. Brown Depo. at p. 14, lines 24-25 — p. 15, lines 1-11). Action Labor also provides both short-term and long-term employees to its clients. (T. Brown Depo., p. 35, lines 5-8).

Mr. Charles Berman ("Mr. Berman") is the President of Berman. (Charles Berman Depo., p. 8, line 5). Berman's business involves processing scrap metal to mill specifications, so it can be melted and recycled, as well as distributing new steel. (Sworn Stmt. of Peter Krufchinski, p. 6, lines 3-4). Berman has three divisions — ferrous (scrap iron, steel and cast iron), nonferrous (copper, brass and aluminum) and new steel. (Sworn Stmt. of Peter Krufchinski, p. 5, lines 24-25-p. 6, lines 1-13). Berman's ferrous division cut up scrap iron, steel and cast iron, to process it for sale to mills. (Dkt. 100, p. 3). Berman used Action Labor to provide it with skilled and unskilled labor. (Charles Berman Depo., p. 79, lines 24-25 — p. 80 lines 1-3).

The Railcar Project

In the mid-1990's, Berman began to receive rail cars and dismantle them for scrap. (Sworn Stmt. of Peter Krufchinski, p. 8, lines 20-21). In 2000, Berman began cutting up an increasing number of railcars for scrap to be sold to steel mills (the "Railcar Project"). (Charles Berman Depo., p. 23, lines 4-21). Berman stopped processing rail, cars for scrap in 2003. (Sworn Stmt. of Peter Krufchinski, p. 5, lines 24-25-p. 6, lines 1-13). Berman stopped processing railcars due to lack of profits and the rising cost of railcars. (Sworn Stmt. of Peter Krufchinski, p. 11, lines 3-4; Charles Berman Depo., p. 24, lines 23-25 — p. 25, line 1). Mr. Berman stated that if the price of railcars dropped, he would consider processing railcars again. (Charles Berman Depo., p. 25, lines 3-4).

Prior to beginning the railcar cutting and following the conclusion of the cutting in 2003, Berman employed two full time burners. (Charles Berman Depo., p. 65 line 20 — p. 66, lines 1-3). When processing railcars Berman employed three "burners," i.e., a worker who uses a cutting torch to cut large pieces of metal into smaller pieces suitable for sale. (Charles Berman Depo., p. 21, line 13 — p. 22, line 17). The third burner, Mr....