Southern-Owners Ins. Co. v. Easdon Rhodes & Assocs. LLC

• Citation: 872 F.3d 1161
• Decision Date: 29 September 2017
• Docket Number: No. 14-15386.,14-15386.
• Parties: SOUTHERN–OWNERS INSURANCE COMPANY, Plaintiff–Counter Defendant–Appellee, v. EASDON RHODES & ASSOCIATES LLC, et al., Defendants–Counter Claimants, Linnie D. Rhodes, Defendant, David W. Moore, Denise Moore, Defendants–Counter Claimants–Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

872 F.3d 1161

SOUTHERN–OWNERS INSURANCE COMPANY, Plaintiff–Counter Defendant–Appellee,

v. EASDON RHODES & ASSOCIATES LLC, et al., Defendants–Counter Claimants,Linnie D. Rhodes, Defendant,David W. Moore, Denise Moore, Defendants–Counter Claimants–Appellants.

No. 14-15386.

United States Court of Appeals, Eleventh Circuit.

September 29, 2017

Gaetan Gerville–Reache, Warner Norcross & Judd, LLP, Grand Rapids, MI, Elizabeth A. Parsons, Wilson Harrell Farrington & Ford, PA, Pensacola, FL, John J. Bursch, Bursch Law PLLC, Caledonia, MI, for Plaintiff–Appellee.

Britt Bethea, Greene & Phillips, LLC, MOBILE, for Defendants–Appellants.

Before TJOFLAT and ROSENBAUM, Circuit Judges, and GOLDBERG,^* Judge.

TJOFLAT, Circuit Judge:

This case arises from a dispute over the scope of the insurance coverage provided by a standard form Hired Auto and Non-Owned Auto Liability Endorsement to a corporate general liability insurance policy (the "Endorsement") issued by Southern–Owners Insurance Company ("Southern–Owners") to Easdon Rhodes & Associates, LLC ("Easdon Rhodes"). Following an auto accident involving one of its members, Joshua Rhodes, Easdon Rhodes was named as one of several defendants in a state court negligence action filed by David Moore, who suffered serious injuries in the crash.¹ Southern–Owners agreed to defend the suit in state court but reserved its rights to deny coverage under the terms of the Endorsement. Subsequently, Southern–Owners filed an action in the United States District Court for the Northern District of Florida seeking a declaratory judgment absolving it of the duty to indemnify or defend Easdon Rhodes, or the other defendants, against Moore's negligence suit. After Southern–Owners moved for summary judgment, the District Court held that the vehicle driven by Joshua Rhodes did not qualify for coverage under the terms of the Endorsement, and, even if the vehicle had qualified, the existence of a separate insurance policy also covering the accident triggered the Endorsement's exclusion clause absolving Southern–Owners of its duties under the policy. Easdon Rhodes appealed, arguing the vehicle driven by Joshua Rhodes qualified for coverage and that the Endorsement's exclusion clause was ambiguous and could not provide Southern–Owners with a basis to deny coverage for the accident under Florida law. With the benefit of oral argument, and after a searching review of the parties' briefs and the record, we affirm the District Court's judgment.

I.

Joshua Rhodes and Mark Easdon formed Easdon Rhodes, a limited liability company, to provide a variety of maintenance- and construction-related services. Shortly after formation, the company purchased a corporate general liability insurance policy from Southern–Owners. Automobiles were specifically excluded from coverage under the original policy, but Easdon Rhodes purchased an Endorsement which expanded coverage to include certain categories of automobiles. The text of the Endorsement included an exclusion clause explaining coverage was only provided under the provision if "you do not have any other insurance available to you which affords the same or similar coverage." The policy limit for bodily injury and property damage claims covered by the Endorsement was $1,000,000.00.

On April 1, 2011, a Chevrolet Silverado driven by Joshua Rhodes collided with a motorcycle driven by David Moore, causing Moore serious injuries. At the time of the accident, the Silverado was protected by a personal auto insurance policy issued by Nationwide Mutual Insurance Company (the "Nationwide policy"). In addition to the Silverado, that policy also insured two other vehicles and provided, among other things, coverage for bodily injury and property damage. The Nationwide policy limit for bodily injury was $25,000.00.

Following the collision, David Moore and his wife Denise Moore filed a negligence suit against Joshua Rhodes in state court. Approximately a year later, the action was amended to name Easdon Rhodes as an additional defendant. In response to Moore's filings, Nationwide tendered its policy limit of $25,000, and, under a reservation of rights, Southern–Owners agreed to provide Easdon Rhodes with a defense. Southern–Owners then filed this action in the United States District Court for the Northern District of Florida seeking a declaration that it has no obligation to defend or indemnify Easdon Rhodes, or the other defendants, against Moore's negligence claim.

Southern–Owners moved for summary judgment on April 1, 2014, arguing the Nationwide policy provided coverage similar to that available under the Endorsement and consequently relieved Southern–Owners of any duty to defend or indemnify Easdon Rhodes under the plain terms of the insurance contract. Southern–Owners also argued the Silverado driven by Joshua Rhodes was not covered by the Endorsement in the first instance because it did not meet the policy's definition of a hired or non-owned auto. The District Court agreed with Southern–Owners' interpretation of the Endorsement and, on October 30, 2014, granted summary judgment in Southern–Owners' favor, absolving the insurer of any duty to defend or indemnify Easdon Rhodes against Moore's underlying negligence suit.

II.

We review "a district court's grant of summary judgment de novo applying the same legal standards used by the district court."

Galvez v. Bruce , 552 F.3d 1238, 1241 (11th Cir. 2008). "Summary judgment is appropriate where ‘there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law.’ " Wooden v. Bd. of Regents of the Univ. Sys. of Ga. , 247 F.3d 1262, 1271 (11th Cir. 2001) (quoting Fed. R. Civ. P. 56(c) ). We also review de novo a district court's interpretation of contract language. Nat'l Fire Ins. Co. v. Fortune Constr. Co. , 320 F.3d 1260, 1267 (11th Cir. 2003).

III.

A.

In this diversity action, we must apply "the substantive law of the forum state." Tech. Coating Applicators, Inc. v. U.S. Fid. & Guar. Co. , 157 F.3d 843, 844 (11th Cir. 1998). Here, we look to Florida law to determine whether Southern–Owners owed a duty to indemnify or defend its insured against Moore's suit in state court. In Florida, the terms used in an insurance contract are given their ordinary meaning, and the policy must be construed as a whole "to give every provision its full meaning and operative effect." Auto–Owners Ins. Co. v. Anderson , 756 So.2d 29, 34 (Fla. 2000). The Florida Supreme Court has emphasized the necessity of interpreting the "terms of an insurance policy ... in their ordinary sense [to provide] a reasonable, practical and sensible interpretation consistent with the intent of the parties." Siegle v. Progressive Consumers Ins. Co. , 819 So.2d 732, 736 (Fla. 2002) (quoting Gen. Accident Fire & Life Assurance Corp. v. Liberty Mut. Ins. Co. , 260 So.2d 249, 253 (Fla. Dist. Ct. App. 1972) ). An unambiguous policy provision is "enforced according to its terms whether it is a basic policy provision or an exclusionary provision." Hagen v. Aetna Cas. & Sur. Co. , 675 So.2d 963, 965 (Fla. Dist. Ct. App. 1996).

If policy language is susceptible to multiple, reasonable interpretations, however, the policy is considered ambiguous and must be "interpreted liberally in favor of the insured and strictly against the drafter who prepared the policy."² Auto–Owners , 756 So.2d at 34. To allow for such a construction, the insurance policy "must actually be ambiguous." Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co. , 913 So.2d 528, 532 (Fla. 2005). Courts are not authorized "to put a strained and unnatural construction on the terms of a policy in order to create an uncertainty or ambiguity." Jefferson Ins. Co. of N.Y. v. Sea World of Fla., Inc. , 586 So.2d 95, 97 (Fla. Dist. Ct. App. 1991). The mere fact that an insurance provision is "complex" or "requires analysis" does not make it ambiguous. Swire Pac. Holdings, Inc. v. Zurich Ins. Co. , 845 So.2d 161, 165 (Fla. 2003).

B.

The central interpretative question presented here is whether the existence of a separate insurance policy, which paid policy limits for the underlying claim at issue, qualifies as "similar insurance" under the Endorsement's exclusion clause thereby absolving Southern–Owners of any duty toward its insured, Easdon Rhodes. The exclusion clause provides that insurance protection is only available under the Endorsement "if you do not have any other insurance available to you which affords the same or similar coverage." The parties do not dispute that the Nationwide policy insuring the Silverado driven by Joshua Rhodes qualifies as "other insurance" and that the Nationwide policy does not offer the "same" coverage as the Endorsement. So, whether the Endorsement's exclusion clause applies to relieve Southern–Owners of a duty to defend or indemnify Easdon Rhodes depends on the meaning of "similar coverage," a term left undefined by the policy.³

Southern–Owners contends the phrase "similar coverage" is susceptible to only a single reasonable interpretation within the context of the Endorsement's exclusion clause: "that it triggers whenever another policy ... is available to pay for the same liability claimed under the policy at issue." Moore disagrees and argues the "similar coverage" language is ambiguous because it could also be reasonably interpreted to require the presence of another insurance policy covering the same overall set of risks as the Southern–Owners corporate general liability policy, not just the specific liability claimed. As Florida law requires the interpretation of ambiguous insurance policies in favor of coverage, Moore asserts Southern–Owners cannot use the Endorsement's exclusion clause to justify disclaiming its duty to defend and indemnify Easdon Rhodes. Because we find only a single reasonable interpretation of the Endorsement's exclusion clause exists, we decline Moore's invitation to manufacture uncertainty and now hold that the clause unambiguously...