Philadelphia Indem. Ins. v. Yachtman's Inn Condo

• Decision Date: 22 January 2009
• Docket Number: Case No. 08-10060-CIV.
• Citation: 595 F.Supp.2d 1319
• Parties: PHILADELPHIA INDEMNITY ISURANCE COMPANY, a Pennsylvania Corporation, Plaintiff, v. YACHTSMAN'S INN CONDO ASSOCATION, INC., and Moss and Associates Property Management, Inc., Defendants.
• Court: U.S. District Court — Southern District of Florida

595 F.Supp.2d 1319

PHILADELPHIA INDEMNITY ISURANCE COMPANY, a Pennsylvania Corporation, Plaintiff, v. YACHTSMAN'S INN CONDO ASSOCATION, INC., and Moss and Associates Property Management, Inc., Defendants.

Case No. 08-10060-CIV.

United States District Court, S.D. Florida, Key West Division.

January 22, 2009.

Gary I. Khutorsky, Esq., Yelena Shneyderman, Esq., Stephens Lynn Klein & McNicholas, Miami, FL, for Plaintiff.

David Harry Rogel, Esq., Becker & Poliakoff, Mark David Feinstein, Esq., Feinstein & Sorota, Miami, FL, Andrew William Bray, Esq., Andrew W. Bray, P.A., Fort Lauderdale, FL, for Defendants.

ORDER GRANTING SUMMARY JUDGMENT FOR PLAINTIFF

JAMES LAWRENCE KING, District Judge.

THIS CAUSE is before the Court upon Defendant Moss and Associates Property Management, Inc. and Plaintiff Philadelphia Indemnity Insurance Company's cross motions for summary judgment (D.E. # 12, # 15), both filed on December 12, 2008.¹

I. BACKGROUND

Plaintiff Philadelphia Indemnity Insurance Company issued a commercial general liability policy No. PHPK 163046 ("the Policy") to Defendant Moss & Associates Property Management, Inc. ("Moss") as the named insured with a separate endorsement naming Yachtsman's Inn Condo Association, Inc. ("Yachtsman") as an additional named insured. (Compl. Dec. Relief ¶¶ 17-18). The Policy was in effect from March 21, 2006 to March 21, 2007 (D.E. # 11).

From June 12, 2006 to June 29, 2006, Milton Dale Boone, Jr. was employed by Moss. (Compl. ¶ 4, Milton Dale Boone, Jr. v. Yachtsman's Inn Condo. Ass'n, Inc., Case No. 08-CA-38P (Fla. 16th Cir.Ct.)) ("St. Ct. Compl."). White working for Moss, he was tasked with pressure cleaning the underground parking areas at Yachtsman's Inn (St. Ct. Compl. ¶¶ 4-6). During this job, Mr. Boone was allegedly "exposed to feces, raw sewage and battery acid which [Yachtsman] had allowed to accumulate and was overflowing on its premises." (St. Ct. Compl. ¶ 6). As a direct result of this exposure, Mr. Boone "suffer[ed] severe dermatological injuries." (St. Ct. Compl. ¶ 11).

On January 11, 2008, Mr. Boone filed suit against Yachtsman in the Circuit Court of the 16th Judicial Circuit in and for Monroe County, Florida alleging that Yachtsman negligently failed "to maintain its premises in a safe manner, free from hazardous condition that would pose a risk of harm to its guests and invitees." (St. Ct. Compl. ¶ 14). Yachtsman filed a Third Party Complaint against Moss in the same state-court action on May 14, 2008. (Third Party Compl., Milton Dale Boone, Jr. v. Yachtsman's Inn Condo. Ass'n, Inc., Case No. 08-CA-38P (Fla. 16th Cir.Ct.)) ("St. Ct. Third Party Compl."). The basis of Yachtsman's pleading was that it had a "contract with Moss to manage, maintain and operate Yachtsman's Inn." (St. Ct. Third Party Compl. ¶ 10). Yachtsman argued that, should it be found liable for Mr. Boone's injuries, Moss must also be held liable because "Moss employed [Mr. Boone] and directed him to perform services at the property operated by Yachtsman." (St. Ct. Third Party Compl. ¶ 6).

Although representing both Yachtsman and Moss in the state-court action pursuant to a reservation of rights (Compl. Dec. Relief ¶¶ 13, 16), Plaintiff filed its Complaint for Declaratory Relief in this Court on September 8, 2008 (D.E. # 1). Plaintiff acknowledges that it issued the Policy to Moss as the named insured, (Compl. Dec. Relief ¶ 17); however, Plaintiff now seeks a declaratory judgment against Yachtsman and Moss that there is no insurance coverage, duty to defend, or duty to indemnify Defendants for the injuries asserted by Mr. Boone in the underlying state-court action.

The Policy clearly provides insurance for liability arising from bodily injury subject to a number of exclusions to coverage (D.E. # 11). One such exclusion, known as an "absolute pollution exclusion," states:

This insurance does not apply to ... "Bodily injury" ... arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants" ... [a]t or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured....

(D.E. # 11). The Policy supplements the terms of the exclusion with a definition of "pollutants" as "any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste." (D.E. # 11). The Policy further defines "waste" to include "materials to be recycled, reconditioned or reclaimed." (D.E. # 11).

The Parties' pleadings both address the interpretation of the Policy's pollution exclusion. Plaintiff contends that the claims in the underlying, action that have been asserted against Yachtsman and Moss are not covered under the Policy due to the language of the pollution exclusion (Mot. Summ. J. 2). Defendants argue that summary judgment in favor of Plaintiff is inappropriate because there are issues of fact as to "the ambiguous provisions and/or terms in the [Policy's] pollution exclusion." (Def. Yachtsman's Resp. Summ. J. 9); (Def. Moss's Resp. Summ. J. 2-3).²

II. STANDARD OF REVIEW

Summary judgment is appropriate where the pleadings and supporting materials establish 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. See Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the record as a whole could not lead a rational fact-finder to find for the nonmoving party, there is no genuine issue of fact for trial. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

The moving party bears the burden of pointing to the part of the record that shows the absence of a genuine issue of material fact. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); Allen v. Tyson Foods, Inc., 121 F.3d 642, 645 (11th Cir.1997). Once the moving party establishes the absence of a genuine issue of material fact, the burden shifts to the nonmoving party to go beyond the pleadings and designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. 2548; see also Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir.1991) (holding that, to meet its burden, the nonmoving party must "come forward with significant, probative evidence demonstrating the existence of a triable issue of fact.").

On a motion for summary judgment, the court must view the evidence and resolve all inferences in the light most favorable to the nonmoving party, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); however, a mere scintilla of evidence in support of the nonmoving party's position is insufficient to defeat a motion for summary judgment. See id. at 252, 106 S.Ct. 2505. If the evidence offered by the nonmoving party is merely colorable or is not significantly probative, summary judgment is proper. See id. at 249-50, 106 S.Ct. 2505.

Contract interpretation is generally a question of law. Lawyers Title Ins. Corp. v. JDC (America) Corp., 52 F.3d 1575, 1580 (11th Cir.1995). "Questions of fact arise only when an ambiguous contract term forces the court to turn to extrinsic evidence of the parties' intent ... to interpret the disputed term." Id.

III. ANALYSIS

Under Florida law,³ the duty to defend is much broader than the duty to indemnify. See, e.g., Jones v. Fla. Ins. Guar. Ass'n, Inc., 908 So.2d 435, 443 (Fla. 2005). As a result, a court's determination that the insurer has no duty to defend requires a finding that there is no duty to indemnify. See, e.g., Nova Cas. Co. v. Waserstein, 424 F.Supp.2d 1325, 1332 (S.D.Fla.2006) (citing Fun Spree Vacations, Inc. v. Orion Ins., 659 So.2d 419, 421 (Fla. 3d DCA 1995)). When a Florida court makes a determination as to whether an insurer's duty to defend the insured exists, it must look to the allegations contained within the four corners of the complaint in the underlying action against the insured. See, e.g., Lawyers Title Ins. Corp. v. JDC (America) Corp., 52 F.3d 1575, 1580 (11th Cir.1995). Where the complaint against the insured alleges any facts which actually, or even potentially, fall within the scope of coverage under the policy, the insurer is obligated to defend the entire suit. See Kopelowitz v. Home Ins. Co., 977 F.Supp. 1179, 1185 (S.D.Fla. 1997) (citing MCO Envtl., Inc. v. Agric. Excess & Surplus Ins. Co., 689 So.2d 1114, 1115 (Fla. 3d DCA 1997)). Thus, to make a determination as to the insurer's duty to defend, the Court must apply the language of the Policy to the facts of the underlying complaint.

It is undisputed that no Florida court has addressed the language of a similar pollution exclusion clause specifically in terms of its application to raw sewage or to battery acid. (Pl.'s Mot. Summ. J. 9, 10); (Def. Moss Resp. Mot. Summ. J. 3). In such a situation, this Court must discern how Florida courts would decide the issue if confronted with it and interpret the Policy accordingly. "In interpreting insurance contracts, the Florida Supreme Court has made clear that `the language of the policy is the most important factor.'" James River Ins. Co., 540 F.3d at 1274 (quoting Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 537 (Fla. 2005).) "Under Florida law, insurance contracts are construed according to their plain meaning." Taurus, 913 So.2d at 532. Where the policy's language is "plain and unambiguous, there is no special construction or interpretation required, and the plain language of the policy will be given the meaning it clearly expresses.'" Fla. Farm Bureau Ins. v. Birge, 659 So.2d 310, 312 (Fla. 2d DCA 1994). If the language of the policy contains any "genuine inconsistency, uncertainty or ambiguity in meaning," such language must be construed in favor of the insured. State...