Travelers Prop. Cas. Co. of Am. v. H.E. Sutton Forwarding Co.

• Docket Number: 2:21-cv-719-JES-KCD
• Decision Date: 24 August 2023
• Parties: TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Petitioner, v. H.E. SUTTON FORWARDING CO., LLC, D/B/A TEX SUTTON EQUINE AIR TRANSPORTATION, Respondent.
• Court: U.S. District Court — Middle District of Florida

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TRAVELERS PROPERTY CASUALTY COMPANY OF AMERICA, Petitioner, v. H.E. SUTTON FORWARDING CO., LLC, D/B/A TEX SUTTON EQUINE AIR TRANSPORTATION, Respondent.

No. 2:21-cv-719-JES-KCD

United States District Court, M.D. Florida, Fort Myers Division

August 24, 2023

OPINION AND ORDER

JOHN E. STEELE, SENIOR UNITED STATES DISTRICT JUDGE

This case comes before the Court on petitioner's Second Motion for Final Summary Judgment (Doc. #44) filed on June 16, 2023. Respondent filed a Response in Opposition (Doc. #47) on July 17, 2023, to which Petitioner Replied (Doc. #51) on July 31 2023. With permission of the Court, Respondent filed a Sur-Reply in Opposition (Doc. #54) on August 14, 2023. For the reasons set forth below, the motion is granted.

This action arises in the context of an insurance coverage dispute. Petitioner Travelers Property Casualty Company of America (Petitioner or Travelers) seeks a declaration that it does not owe a duty to defend or a duty to indemnify respondent H.E. Sutton Forwarding Co., LLC, D/B/A Tex Sutton Equine Air Transportation (Respondent or Tex Sutton) in a particular aircraft versus tractor trailer accident case filed in state court. (Doc. #1; Doc #1-2.) Travelers moves for summary judgment for a second time, arguing that there is no coverage for damages sought in the state lawsuit due to an Aircraft Liability Exclusion, and that the Exclusion is not “illusory.” (Doc. #44.)

I.

Motions for summary judgment should only be granted when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show “there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “An issue of fact is ‘genuine' if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party.” Baby Buddies, Inc. v. Toys “R” Us, Inc., 611 F.3d 1308, 1314 (11th Cir. 2010). A fact is “material” if it may affect the outcome of the suit under governing law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). The moving party bears the initial burden of showing the court, by reference to materials on file, that there are no genuine issues of material fact that should be decided at trial. Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th Cir. 2004) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)). “When a moving party has discharged its burden, the non-moving party must then ‘go beyond the pleadings,' and by its own affidavits, or by ‘depositions, answers to interrogatories, and admissions on file,' designate specific facts showing that there is a genuine issue for trial.” Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir. 1995) (citing Celotex, 477 U.S. at 324). “A court must decide ‘whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'” Hickson, 357 F.3d at 1260 (quoting Anderson, 477 U.S. at 251).

In ruling on a motion for summary judgment, the Court views all evidence and draws all reasonable inferences in favor of the non-moving party. Scott v. Harris, 550 U.S. 372, 380 (2007); Tana v. Dantanna's, 611 F.3d 767, 772 (11th Cir. 2010). However, “if reasonable minds might differ on the inferences arising from undisputed facts, then the court should deny summary judgment.” St. Charles Foods, Inc. v. America's Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir. 1999) (quoting Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983)) (finding summary judgment “may be inappropriate even where the parties agree on the basic facts, but disagree about the factual inferences that should be drawn from these facts.”)).

Under Florida law^[1], the interpretation of an insurance policy is a pure question of law to be decided at the summary judgment stage. AIX Specialty Ins. Co. v. Members Only Mgmt., LLC, 793 Fed.Appx. 1001, 1002 (11th Cir. 2019); Coleman v. Fla. Ins. Guar. Ass'n, Inc., 517 So.2d 686, 690 (Fla. 1988). The Florida Supreme Court has consistently held that "in construing insurance policies, courts should read each policy as a whole, endeavoring to give every provision its full meaning and operative effect." Auto-Owners Ins. Co. v. Anderson, 756 So.2d 29, 34 (Fla. 2000). See also Wash. Nat'l Ins. Corp. v. Ruderman, 117 So.3d 943, 948 (Fla. 2013). Where “a policy provision is clear and unambiguous, it should be enforced according to its terms.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.2d 528, 532 (Fla. 2005).

II.

A. Factual Background

The Court's Opinion and Order on Travelers' first motion for summary judgment (Doc. #31) sets forth the basic background facts^[2]:

On March 12, 2020, Antonio de Jesus Zepeda (Mr. Zepeda) was injured when operating a tractor trailer in the course of his employment with Brook Ledge Horse Transportation. (Doc. #24, ¶ 1; Doc. #1-2.) Mr. Zepeda was picking up horses and equipment for his employer from an aircraft at Blue Grass Airport in Lexington, Kentucky. (Doc. #1-2, ¶¶ 12-14.) The aircraft - a Boeing 727-200 known as “Air Horse One” - was owned by Kalitta Charters, II, LLC (Kalitta) and chartered by Tex Sutton. (Doc. #24, ¶ 2; Doc. #24-1.) After picking up his load, Mr. Zepeda began exiting the premises and, due to an obscured view, collided with the aircraft's wing and sustained injuries. (Doc. #1-2, ¶¶ 17-19.)

On August 31, 2020, Mr. Zepeda and Victoria Zepeda (the Underlying Plaintiffs) filed a personal injury action, Antonio DeJesus Zepeda v. H.E. Sutton Forwarding Co., LLC, et al., Case No. 20-CI-02602, Fayette Circuit Court Division, Commonwealth of Kentucky (the Underlying Action). (Doc. #24, ¶ 3; Doc. #1-2.) In the Underlying Action, the Underlying Plaintiffs seek damages from Tex Sutton for negligence; negligent hiring, retention, entrustment, supervision and training; negligent infliction of emotional distress; and gross negligence, willful or wanton misconduct, malice and recovery of punitive or exemplary damages.

Relevant to this lawsuit is an Excess Follow-Form and Umbrella Policy (Excess Policy) issued by Travelers to Clark Aviation Corporation (“Clark”) for a period of May 21, 2019 through May 21, 2020. (Doc. #24, ¶ 4; Doc. #24- 2.) The Excess Policy includes two separate coverage parts, Coverage A - Excess Follow-Form Liability and Coverage B - Umbrella Liability. (Doc. #24-2, pp. 1113.)

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The underlying insurance to the Excess Policy is Policy No. 3589-79-35 ECE (Underlying Policy), which was issued by Federal Insurance Company (Chubb) to Clark. (Id. p. 64.) On February 25, 2021, Tex Sutton requested coverage under the Underlying Policy and the Excess Policy for the damages sought in the Underlying Action. (Doc. #1, ¶ 17; Doc. #8, ¶ 17.) Chubb agreed to defend Tex Sutton under a reservation of rights. (Doc. #24, ¶ 14, Doc. #28, ¶ 8.) Travelers, also reserving its rights, recognized that Tex Sutton was a covered insured for purposes of Coverage A because Tex Sutton was a covered insured under the Underlying Policy, but advised Tex Sutton that coverage was barred based on the aircraft exclusions. (Doc. #1, ¶ 11; Doc. #8, ¶ 11; Doc. #1-4, p. 9.)

(Id., pp. 3-7.)

B. Procedural Background

On September 28, 2021, Travelers filed a Petition For Declaratory Relief with the Court pursuant to 28 U.S.C. § 2201. (Doc. #1.) Respondent filed their Answer (Doc. #8) on January 25, 2022. Travelers moved for summary judgment on April 28, 2022, arguing that no coverage for damages sought in the Underlying Action is available to Tex Sutton under the Excess Policy and that Travelers is entitled to judgment as a matter of law. (Doc. #24.) Upon consideration of Travelers' motion for summary judgment, this Court found that denial of the motion was appropriate. (Doc. #31.) The Court agreed with Travelers that Tex Sutton qualified as a covered insured under Coverage A of the Excess Policy and that the “Aircraft Liability Exclusion” applied to the Underlying Action. (Id., pp. 9-12.) The Court, however, found there was merit to Tex Sutton's argument - that Travelers' interpretation of the Aircraft Liability Exclusion “would render the coverage illusory” since it would eliminate virtually all coverage as Tex Sutton's business involves the use of an aircraft. (Id., p. 12.) The Court noted that

The intent of Coverage A is to provide excess liability coverage to the insured provided that the “underlying insurance” would apply to such damages. (Doc. #24-2, p. 11.) The Underlying Policy is not part of the record, so the Court cannot determine, as a matter of law, whether the policy is or is not illusory. For example, if the intent of the Underlying Policy is to cover Tex Sutton's liabilities arising out of the use of an aircraft, the Aircraft Liability Exclusion would completely negate any claim for excess coverage, rendering the policy “complete nonsense.” Purrelli v. State Farm Fire & Cas. Co., 698 So.2d 618, 620 (Fla. 2d DCA 1997) (citation omitted) (policy which purported to cover certain intentional torts, but excluded intended acts, illusory).

(Id., p. 14.) In sum, the Court found that while the Policy may ultimately not be illusory, Travelers failed to carry its summary judgment burden of showing there are no genuine issues which may be resolved as a matter of law. (Id.)

On September 21, 2022, Travelers filed a Motion for Reconsideration, or Alternatively, Leave to File Second Motion For Summary Judgment. (Doc. #32.) Travelers sought reconsideration of the Court's Opinion and Order denying summary judgment asserting that the “intent” of the Underlying Policy was irrelevant to the resolution of...