SCOTTSDALE Ins. Co. v. GFM OPERATIONS INC.
| Decision Date | 12 April 2011 |
| Docket Number | CASE NO. 10-20204-CIV-KING |
| Parties | SCOTTSDALE INSURANCE COMPANY, Plaintiff, v. GFM OPERATIONS, INC., TONNIE STEEN, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE comes before the court upon the Parties' Cross-Motions for Summary Judgment (DE #20; DE #21). The Court has been fully briefed on the matter.1
This is a declaratory judgment action related to an insurance coverage dispute. Plaintiff Scottsdale Insurance Company ("Scottsdale") seeks interpretation of an insurance policy it issued to Defendant GFM Operations, Inc. ("GFM"). More specifically, Plaintiff seeks a judgment declaring that it has no duty to defend its insured, GFM, in an ongoing state court lawsuit revolving around a shooting that occurred on GFM's premises in 2006.2 (DE # 1). Plaintiff alsoseeks judgment declaring that it has no duty to indemnify its insured against any claims or losses resulting from the 2006 shooting, or, alternatively, that any coverage under the policy is limited to $50,000 pursuant to a sub-limit clause in the policy. Id. The Court initially ordered the Parties to engage in limited discovery and submit briefs on the relevant legal issues. (DE #12). Upon review of the briefs, the court ordered further discovery and set deadlines for filing summary judgment motions. (DE #18). The instant Cross Motions for Summary Judgment followed.
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 (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 (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 (1970); Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (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; see also Chanel, Inc. v. Italian Activewear of Fla., Inc., 931 F.2d 1472, 1477 (11th Cir. 1991) ().
On a motion for summary judgment, the court must view the evidence and resolve allinferences in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., All U.S. 242, 255 (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. 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.
Defendant GFM owns and operates a flea market. Defendant Tonnie Steen worked for GFM at the flea market. He worked in maintenance, which entailed welding, electrical and plumbing repairs, carpentry, and occasionally collecting money from patrons entering the flea market. Defendant Steen worked three twelve-hour shifts at GFM each week, on Friday, Saturday and Sunday. He ran his own welding business during the remaining four days each week, and GFM permitted Defendant Steen to keep some of his welding equipment on the flea market premises. Although Steen had a regular work schedule, GFM occasionally asked him to perform tasks on days Steen was not scheduled to work.
On Wednesday, June 7,2006, Defendant Steen was not scheduled to work. Nonetheless, GFM's general manager asked Steen to move a concrete barrier with a forklift if Steen was going to be on the GFM premises that day. Steen was in fact going to GFM that day to pick up his welding tools, and he moved the barrier with a forklift while he was there. Steen, who is a salaried employee, was not paid extra for what he characterized as this "favor." GFM's general manager also described the task as a "favor," but explained that Steen could have moved the barrier on Wednesday while he was there, or simply waited to do it until he was scheduled to work later in the week.
After moving the barrier, Steen returned the forklift to its storage location and began to leave the GFM premises. Steen had recently purchased a new pickup truck, and wanted to show it to a friend on the way out. About two to five minutes after moving the barrier, Steen and his friend walked toward the truck. Suddenly, Steen heard a woman screaming and saw a man running. Steen instinctively grabbed the man as he ran by, and attempted to hold the man down. During this struggle, a second unidentified man shot Steen in the stomach. The unidentified men, who were attempting to rob an automatic teller machine ("ATM") on the GFM premises, fled the scene. Steen was rushed to the hospital by one of the flea market's merchants. Although Steen was later told by GFM's manager that Florida's workers' compensation laws would not apply to his case, GFM applied for workers' compensation benefits on Steen's behalf. Subsequently, GFM's workers' compensation insurance carrier paid Steen's medical bills. Steen continued to receive his salary for several months after the shooting, but he never returned to work at GFM and GFM ultimately stopped paying him.
Scottsdale issued Policy number BCS001126 ("the policy") to Defendant GFM. (DE #21-1). The policy, which covers "general commercial liability," was in effect from September 19, 2005 to September 19, 2006. Id. By its terms, the policy provides insurance coverage for "bodily injury" if the injury is caused by an "occurrence" that takes place within the "coverage territory" during the policy period.3 There is no dispute that Steen sustained "bodily injury"caused by an "occurrence" within the "coverage territory" while the policy was in effect.
However, the policy also limits coverage through a list of exclusions. (DE #1, Section I(2)). At issue here are the exclusions titled "Workers' Compensation and Similar Laws" and "Employer's Liability," which narrow the coverage available for injuries to GFM employees. The policy provides:
This insurance does not apply to:
Workers' Compensation and Similar Laws.
Any obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law.
"Bodily injury" to:
(1) An "employee" of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured's business.
This exclusion applies:
(1) Whether the insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.
(DE #1, Form CG 00 01 12 04, Section I(2)(d)-(e))- In addition, the policy caps the coverage available for injuries or damage resulting from assault and battery. The policy limit for such injury is $50,000. (DE #1, Form GLS-215s (4-00)).4
Defendants GFM and Tonnie Steen are opposing parties in the underlying lawsuit, Tonnie Steen v. Opa Locka Hialeah Flea Market Association, Inc., and GFM Operations, Case No. 0779811-CA-06, filed on or about December 24, 2008. In the underlying lawsuit, Tonnie Steen asserted several negligence causes of action arising out of the shooting on the GFM premises. According to the allegations in the underlying complaint, on or about June 7, 2006, Mr. Steen was a business invitee on the premises of Opa Locka Hialeah Flea Market Association, Inc., and/or GFM, when a gunman allegedly entered one of the shops on the property and shot Mr. Steen in the stomach. (DE #1). Plaintiff Scottsdale has been defending Defendant GFM in the Underlying Lawsuit subject to a reservation of rights under the policy.
In its Complaint for Declaratory Judgment, Scottsdale seeks declaration of its obligations to GFM in the underlying lawsuit. Specifically, Scottsdale alleges that it owes neither a duty to defend GFM in the underlying lawsuit, nor a duty to indemnify it against losses arising from the shooting of Tonnie Steen. An insurer's duty to defend its insured and its duty to indemnify its insured are distinct issues that are governed by different standards. Accordingly, they will be addressed separately here.
In Florida, an insurer's duty to defend is broader than the duty to indemnify. Sinni v. Scottsdale Ins. Co., 676 F.Supp. 2d 1319, 1323 (M.D. Fla. 2010). Whether an insurer has a dutyto defend its insured "is determined solely by the claimant's complaint if suit has been filed." Higgins v. State Farm Fire and Casualty Co., 894 So. 2d 5, 9-10 (Fla. 2004). It is well settled that the insurer's duty to defend against a legal action is, triggered "when the complaint alleges facts that fairly and potentially bring the suit within policy coverage." Jones v. Florida Ins. Guar. Ass'n, Inc., 908 So. 2d 435, 442-43 (Fla. 2005). Furthermore, the insurer must defend even if the allegations in the complaint are factually incorrect or meritless." Smithers Constr., Inc. v. Bituminous Casualty Corp., 563 F.Supp. 2d 1345, 1348-49 (S.D. Fla. 2008). In fact, "when the actual facts are inconsistent with the allegations in the complaint, the allegations in the complaint control in determining the insurer's duty to defend." Jones, 908 So. 2d at 443. Moreover, "any doubts regarding the duty to defend...
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