Reliance Ins. Co. v. Royal Motorcar Corp., 4-86-2817
| Citation | 13 Fla. L. Weekly 2712,534 So.2d 922 |
| Decision Date | 14 December 1988 |
| Docket Number | No. 4-86-2817,4-86-2817 |
| Parties | 13 Fla. L. Weekly 2712 RELIANCE INSURANCE COMPANY, Appellant, v. ROYAL MOTORCAR CORPORATION, etc., and Ronald Lyss, et al., Appellees. |
| Court | Court of Appeal of Florida (US) |
Caroline C. Emery of Harold C. Knecht, Jr., P.A., Coral Gables, for appellant.
Joseph S. Kashi of Conrad, Scherer & James, Fort Lauderdale, for appellee, Royal Motorcar.
Reliance Insurance Company appeals a declaratory judgment holding that it had a duty to defend its insured as well as afford coverage for the accident in question.
Ronald Lyss sued Royal Motorcar Corporation (Royal), Reliance Insurance Company (Reliance), Marine Consulting, Inc. (Marine), Richard L. Walters, president of Royal, and others to recover compensatory damages for personal injuries sustained in a boating accident. The amended complaint alleged that Marine permitted Royal's president, Richard Walters, to possess, maintain and use a certain boat, that "at all times material herein" Richard Walters was acting as an agent of Royal and Marine when engaged in the maintenance, operation and use of the boat, and that the defendants were engaged in a joint venture and/or joint enterprise in negligently entrusting the boat to Richard's brother, William, whose negligent operation of the boat caused the plaintiff's personal injuries.
Royal was the named insured in a comprehensive general liability insurance policy issued by Reliance. The policy contained a watercraft exclusion which states:
This insurance does not apply:
....
5. to personal injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of
(a) any watercraft owned or operated by or rented or loaned to any Insured.
The policy defined an "Insured" as the organization designated as the "Named Insured" on the first page of the policy and any executive officer, director or stockholder thereof while acting within the scope of his duties as such.
Reliance denied coverage and did not defend Royal in the main action, thus forcing Royal to retain its own counsel to defend the case. Royal and Reliance filed cross-claims for declaratory judgment against each other with Royal seeking to establish the existence of insurance coverage and the right to a defense and Reliance seeking to negate it.
During the course of the proceedings Ronald Lyss settled his claim. The case was then tried by the court on the cross-claims. For use in trial of the cross-claims Royal and Reliance filed a stipulation of facts which included a stipulation that Richard Walters, president of Royal, borrowed the boat from Marine to use for his own personal pleasure and that, while it was being so used with his family and operated by his brother, the boat had been involved in the accident injuring Ronald Lyss.
Reliance contends that an insurer's duty to defend is determined by the allegations of the complaint and because Lyss's complaint alleged facts placing the incident within the insurance policy's watercraft exclusion, the duty to defend never arose. Royal, on the other hand, argues that the exclusion relied upon by Reliance is applicable only if Richard Walters was an insured under the Royal policy, and that Richard Walters did not meet the policy definition of an insured because the stipulation of facts filed after settlement of the injured plaintiff's claim established that he was not using the boat within the scope of his duties as an officer of Royal Motorcar Corporation. 1
The duty of an insurer to defend is determined solely by the allegations of the complaint against the insured, National Union Fire Insurance Co. v. Lenox Liquors, Inc., 358 So.2d 533 (Fla.1977); Buckner v. Physicians Protective Trust Fund, 376 So.2d 461 (Fla. 3d DCA 1979); Patriot General Insurance...
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