Travelers Indem. Co. v. Pcr Inc., No. 02-12829.

• Decision Date: 04 April 2003
• Docket Number: No. 02-12829.
• Citation: 326 F.3d 1190
• Parties: TRAVELERS INDEMNITY COMPANY, Plaintiff-Counter-Defendant-Appellant, v. PCR INCORPORATED, Defendant-Counter-Claimant-Appellee, Debra Turner, As Personal Representative of the Estate of Thomas Paul Turner III, James Creighton, et al., Defendants.
• Court: U.S. Court of Appeals — Eleventh Circuit

326 F.3d 1190

TRAVELERS INDEMNITY COMPANY, Plaintiff-Counter-Defendant-Appellant, v. PCR INCORPORATED, Defendant-Counter-Claimant-Appellee, Debra Turner, As Personal Representative of the Estate of Thomas Paul Turner III, James Creighton, et al., Defendants.

No. 02-12829.

United States Court of Appeals, Eleventh Circuit.

April 4, 2003.

Allan B. Taylor, Day, Berry & Howard, LLP, Hartford, CT, for Travelers Indem. Co.

Michael D. Whalen, John A. DeVault, Bedell, Dittmar, DeVault & Pillans, P.A., Jacksonville, FL, for PCR Inc.

Appeal from the United States District Court for the Northern District of Florida.

Before EDMONDSON, Chief Judge, and KRAVITCH and GIBSON^*, Circuit Judges.

PER CURIAM:

This case involves a determination by the district court that an insurance company is obligated to provide coverage to an insured because an ambiguous exclusionary clause must be read to require specific intent by the insured to invoke the intentional-tort exclusion from liability coverage. The Florida Supreme Court, after considering these same facts in the context of the Florida workers' compensation statute, concluded that intentional torts included acts which involved substantial certainty that death or injury would befall an employee. Before we decide if Travelers Indemnity Company must provide liability coverage to PCR Incorporated, we need to ask the Florida Supreme Court for some advice about Florida law.

BACKGROUND

In 1991, an explosion at the PCR chemical plant killed Paul Turner and seriously injured James Creighton, chemical technicians for PCR. Two experts opined that the chemicals used to develop a replacement coolant for freon were "highly reactive" and "prone to spontaneous and violent decomposition when heated or compressed." The explosion seemingly occurred when the chemicals were mixed in containers that were ill-suited for the chemical reaction. One expert stated that a "substantial certainty" existed that placing large quantities of these volatile substances in a rudimentary propane tank rather than in a suitably equipped reactor would result in an explosion. Turner v. PCR, Inc., 754 So.2d 683, 685 (Fla.2000).

Creighton and Turner's wife brought suit in a Florida court for the damages they suffered. PCR invoked immunity from suit on the grounds that the only recourse for damages available to Creighton and Turner was through workers' compensation. PCR claimed its behavior constituted no intentional tort that would permit Creighton and Turner to bring suit against it outside of workers' compensation.

The Florida Supreme Court eventually determined that a subjective, specific intent was not required to overcome tort immunity under the workers' compensation statute. After considering the facts of this case, the Florida Supreme Court concluded that a substantial certainty of death or injury adequately supported an intentional tort to overcome employer immunity from suit.

[The] intentional tort exception includes an objective standard to measure whether the employer engaged in conduct which was substantially certain to result in injury. This standard imputes intent upon employers in circumstances where injury or death is objectively "substantially certain" to occur. To hold otherwise would virtually encourage a practice of "willful blindness" on the part of employers who could ignore conditions that under an objective test would be found to be dangerous, and later claim lack of subjective knowledge or intent to harm an employee.

Turner, 754 So.2d at 691. The Florida Supreme Court concluded that there were issues of fact about whether PCR engaged in conduct substantially certain to cause injury or death and remanded the case to the trial court.

Before the explosion, Travelers had issued an insurance policy to PCR. Travelers brought an action for declaratory judgment in the district court to determine the coverage scope of the insurance policy. Travelers contended that it bore no responsibility in defending or indemnifying PCR against the suit brought by Creighton and Turner because the policy covered no intentional torts. Part One of the policy provides workers' compensation coverage. That coverage extends only to injuries to employees that result from accident or disease. Part Two of the policy provides employers' liability insurance. The terms of the policy require Travelers to 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." But the liability coverage is limited to accidental injury: "This employers liability insurance applies to bodily injury by accident...." Coverage for accidental injury is subject to exclusions, including "bodily injury intentionally caused or aggravated by [PCR]." Travelers is required by the policy to defend against any suit brought for damages payable under the terms of the policy (such as damages for accidental, unintentional injuries).

The district court determined that the insurance law of Florida required any ambiguity in an insurance contract to be resolved in favor of the insured. Because earlier Florida caselaw allowed an insurance carrier to avoid coverage only where an intentional tort was supported by a specific intent to cause harm, the district court concluded there existed, at least, some ambiguity in the clause "bodily injury intentionally caused or aggravated" by PCR. The district court granted the motion for judgment on the pleadings by PCR.

DISCUSSION

In the earlier case before the Florida Supreme Court, PCR claimed it owed no liability to Turner and Creighton because "workers' compensation is the exclusive remedy for `accidental injury or death arising out of work performed in the course and scope of employment.'" Turner, 754 So.2d at 686 (quoting Fla. Stat. § 440.09(1) (1997)). The Florida Supreme Court, however, "reaffirmed" in the Turner decision that "workers' compensation law does not protect an employer from liability for an intentional tort against an employee." Id. at 687. The high court also stressed that in the workers' compensation context, two alternative bases exist for an employee to demonstrate an intentional tort sufficient to avoid tort immunity: the employer must have either "exhibit[ed] a deliberate intent to injure or engage[d] in conduct which is substantially certain to result in injury or death." Id. (internal quote marks and citation omitted)(emphasis in original). The second part of the disjunctive test is viewed objectively and "imputes intent upon employers in circumstances where injury or death is objectively `substantially certain' to occur." Id. at 691.

Travelers claims that the insurance policy with PCR specifically excluded "bodily injury intentionally caused or aggravated by you." Based on this exclusion, Travelers denies a duty on their part to defend or to indemnify PCR against the suits by Turner and Creighton. Travelers argues that injuries intentionally caused by PCR include those injuries (or death) that are substantially certain to occur, consistent with the conclusion of the Florida Supreme Court about workers' compensation. The Turner case, according to...