Travelers Indem. Co. v. PCR INC.

• Decision Date: 09 December 2004
• Docket Number: No. SC03-630.,SC03-630.
• Citation: 889 So.2d 779
• Parties: TRAVELERS INDEMNITY COMPANY, Appellant, v. PCR INCORPORATED, et al., Appellees.
• Court: Florida Supreme Court

889 So.2d 779

TRAVELERS INDEMNITY COMPANY, Appellant, v. PCR INCORPORATED, et al., Appellees.

No. SC03-630.

Supreme Court of Florida.

December 9, 2004.

Andrew E. Grigsby of Hinshaw and Culbertson, Miami, FL, and Allan B. Taylor of Day, Berry and Howard, LLP, Hartford, CT, for Appellant.

John A. DeVault, III and Michael D. Whalen of Bedell, Dittmar, DeVault, Pillans, and Coxe Professional Association, Jacksonville, FL, for Appellee.

BELL, J.

In Turner v. PCR, Inc., 754 So.2d 683 (Fla.2000), we reaffirmed the existence of an intentional-tort exception to the otherwise exclusive nature of the statutory remedy provided by the Workers' Compensation Law. Under the intentional-tort exception, an injured employee can avoid the exclusive-remedy provision of the Workers' Compensation Law and sue his employer in tort if his workplace injury was caused by an intentional tort committed against him by his employer. We held in Turner that an injured employee could satisfy the intentional-tort exception either by demonstrating that his employer actually intended to injure him or by demonstrating that his employer engaged in conduct that was objectively substantially certain to result in injury.¹

The question presented in this case, by way of two questions of Florida law certified by the United States Court of Appeals for the Eleventh Circuit,² is whether an employer's liability insurance policy that provides coverage for liability arising from work-related accidental injuries, but excludes from coverage liability arising from injuries intentionally caused by the employer, provides coverage for a tort claim brought under the objectively-substantially-certain prong of the Workers' Compensation Law's intentional-tort exception. We answer this question in the affirmative. Furthermore, we hold that such insurance coverage does not offend, and is not prohibited by, public policy.

I. BACKGROUND

This case arises out of a 1991 explosion at PCR's chemical plant that killed Paul Turner and seriously injured James Creighton, both of whom were employed by PCR as chemical technicians. See Travelers Indem. Co. v. PCR, Inc., 326 F.3d 1190, 1191 (11th Cir.2003)

; Turner v. PCR, Inc., 754 So.2d 683, 684-86 (Fla.2000) (describing the facts surrounding the explosion). In Turner, we addressed the propriety of the tort suits brought against PCR by the injured employees and held that the trial court erred in granting summary judgment in favor of PCR. 754 So.2d at 691. The issue in this case, on the other hand, is whether Travelers Indemnity Company, the insurer that issued PCR its employer's liability insurance policy (in conjunction with a workers' compensation insurance policy³), is obligated under that policy to defend and indemnify PCR in the underlying tort suits. Travelers Indem. Co.,

326 F.3d at 1191-92.

A. The Underlying Tort Suits

After the explosion, Turner's wife and Creighton both sued PCR. Turner's wife, as the personal representative of Turner's estate, brought a wrongful-death action, and Creighton brought a personal-injury action. PCR moved for summary judgment on the ground that it was immune from suit under the exclusive-remedy provision of the Workers' Compensation Law.⁴ The trial court granted summary judgment in favor of PCR on this ground, and the district court affirmed. Turner v. PCR, Inc., 732 So.2d 342 (Fla. 1st DCA 1998), quashed, 754 So.2d 683 (Fla.2000).

We quashed the district court's decision and held that PCR was not entitled to summary judgment on its exclusive-remedy defense. Turner, 754 So.2d at 684. We began by noting that our case law already recognized that the exclusive-remedy provision of the Workers' Compensation Law did not bar an injured employee from suing his employer in tort if the employee could demonstrate that his injury was the result of an intentional tort committed against him by his employer. Id. at 686-87 (citing Eller v. Shova, 630 So.2d 537 (Fla.1993); Fisher v. Shenandoah Gen. Constr. Co., 498 So.2d 882 (Fla.1986); and Lawton v. Alpine Engineered Prods., Inc., 498 So.2d 879 (Fla.1986)). We also noted that our case law had recognized two alternative methods for satisfying the intentional-tort exception. An injured employee seeking to avoid the exclusive-remedy provision of the Workers' Compensation Law and sue his employer in tort could do so, of course, by demonstrating that his employer "exhibited a deliberate intent to injure" him. Turner, 754 So.2d at 687 (quoting Fisher, 498 So.2d at 883) (alteration omitted). Alternatively, an injured employee could satisfy the intentional-tort exception by demonstrating that his employer "engaged in conduct which [was] substantially certain to result in injury or death." Id. at 687 (quoting Fisher, 498 So.2d at 883) (alteration omitted).

In Turner, however, we went one step further. We held that the latter method of satisfying the intentional-tort exception, the substantial-certainty method, calls for an objective inquiry: the relevant question is not whether the employer actually knew that its conduct was substantially certain to result in injury or death but, rather, whether the employer should have known that its conduct was substantially certain to result in injury or death. 754 So.2d at 688. Accordingly, we held that under the substantial-certainty method of satisfying the intentional-tort exception, "the employer's actual intent is not controlling." Id. Rather, this method requires a court to look to the totality of the circumstances "to determine whether a reasonable person would understand that the employer's conduct was substantially certain to result in injury or death to the employee." Id. (internal quotation marks omitted).⁵ Applying this standard, we held that PCR was not entitled to summary judgment because genuine issues of material fact existed as to whether its conduct had been objectively substantially certain to cause injury or death. Id. at 691.⁶

B. The Employer's Liability Insurance Policy

At the time of the explosion, PCR was insured by Travelers Indemnity Company (Travelers) under a "Workers Compensation and Employers Liability Policy." As its name suggests, this was a dual-coverage policy. Part One, entitled "Workers Compensation Insurance," provided that Travelers would "pay promptly when due the benefits required of [PCR] by the workers compensation law." Part Two, entitled "Employers Liability Insurance," provided that Travelers would "pay all sums [PCR] legally must pay as damages because of bodily injury to [PCR's] employees, provided the bodily injury is covered by this Employers Liability Insurance." Part Two's coverage applied only to claims of "bodily injury by accident ... aris[ing] out of and in the course of the injured employee's employment by [PCR]." Additionally, Part Two enumerated several exclusions from coverage, one of which was that "[t]his insurance does not cover ... bodily injury intentionally caused or aggravated by [PCR]."⁷

After our decision in Turner, Travelers brought a declaratory-judgment action in the federal district court to determine whether it was obligated under Part Two of the Workers Compensation and Employers Liability Policy to defend or indemnify PCR against the claims brought by PCR's injured employees in the underlying tort suits. The district court granted summary judgment in favor of PCR, holding that the claims in the underlying tort suits were covered by the policy because the injury-intentionally-caused exclusion applied only if the insured specifically intended to cause injury. See Travelers Indem. Co.,326 F.3d at 1192. On appeal, the federal court of appeals was unsure how Florida law would interpret the policy. The court recognized that two of Florida's district courts of appeal had interpreted identical exclusionary clauses to apply only when the insured acted with the specific intent to cause injury. Id. at 1193-94 (citing Cloud v. Shelby Mut. Ins. Co., 248 So.2d 217 (Fla. 3d DCA 1971), and Phoenix Ins. Co. v. Helton, 298 So.2d 177 (Fla. 1st DCA 1974)). The court, however, was unsure whether our decision in Turner affected this line of cases. The court noted that if Cloud and Helton controlled, "Travelers could remain liable for what might be interpreted [under Turner] as PCR's `intentional' torts if the torts were committed without specific intent to cause injury to the employees." Id. at 1194. Because "[t]he law of Florida on point seem[ed] debatable," the court certified the following questions:

1. Does Florida insurance law require a reading of specific intent into an insurance clause excepting from liability coverage "[b]odily injury intentionally caused or aggravated" by the insured?

2. Is PCR in this case entitled to liability coverage based on the language of this policy agreement, read in the light of Florida's law of interpreting insurance policies?

Id.

II. DISCUSSION

This case raises two separate issues. The first issue is one of contract interpretation. Does the insurance policy, properly interpreted, extend coverage to the claims brought against PCR in the underlying tort suits. Specifically, does an employer's liability insurance policy, which provides coverage for "bodily injury by accident" and excludes from coverage "injur[ies] intentionally caused" by the insured, extend coverage to a claim brought under Turner's objectively-substantially-certain standard, where the injured employee does not allege that the employer actually intended to cause injury. We answer this question in the affirmative. The second issue is one of public policy. Does public policy prohibit an employer from insuring against the risk of liability arising under Turner's objectively-substantially-certain standard. We answer this question in the negative. We will address each of these issues below.

A. Interpreting the Policy

We must begin by looking to the language of the policy. If the language used in an insurance policy is plain and unambiguous, a court must...