Vozzcom, Inc. v. Beazley Ins. Co., Inc.

• Decision Date: 17 June 2009
• Docket Number: Case No. 08-62044-CIV.
• Citation: 666 F.Supp.2d 1321
• Parties: VOZZCOM, INC., a Florida corporation, Plaintiff, v. BEAZLEY INSURANCE COMPANY, INC., a foreign profit corporation; and Great American Insurance Company of New York d/b/a Great American Insurance, a foreign profit corporation, Defendants.
• Court: U.S. District Court — Southern District of Florida

666 F.Supp.2d 1321

VOZZCOM, INC., a Florida corporation, Plaintiff, v. BEAZLEY INSURANCE COMPANY, INC., a foreign profit corporation; and Great American Insurance Company of New York d/b/a Great American Insurance, a foreign profit corporation, Defendants.

Case No. 08-62044-CIV.

United States District Court, S.D. Florida.

June 17, 2009.

John Martin Mullin, Paul Octavio Lopez, Tripp Scott, Fort Lauderdale, FL, for Plaintiff.

Gary I. Khutorsky, Yelena Shneyderman, Stephens Lynn Klein & Mcnicholas, Miami, FL, Andrew Tramont, Jr., Tramont Guerra & Nunez, Coral Gables, FL, for Defendants.

ORDER

CECILIA M. ALTONAGA, District Judge.

THIS CAUSE came before the Court on Defendant, Beazley Insurance Company, Inc.'s ("Beazley['s]") Motion for Summary Judgment [D.E. 26], filed on April 14, 2009; Defendant, Great American Insurance Company, Inc.'s ("Great American['s]") Motion for Summary Judgment [D.E. 27], filed on April 21, 2009; and Plaintiff, Vozzcom, Inc.'s ("Vozzcom['s]") Cross-Motion for Summary Judgment [D.E. 45], filed on May 20, 2009. The Court has carefully considered the parties' written submissions and applicable law.

I. BACKGROUND¹

This case arises from an insurance dispute. Plaintiff, Vozzcom, was issued an employment practices liability policy by Beazley. (See Beazley's Motion for Summary Judgment ("Beazley's Mot.") [D.E. 26] at 1). This policy included an endorsement that covered defense costs incurred by Vozzcom in lawsuits by its employees for violations of wage and hour laws. (See id.). The policy period ran from January 1, 2007 through January 1, 2008. (See id.).

On June 4, 2007, a former Vozzcom employee, Claudio Teixeira ("Teixeira"), filed a lawsuit against Vozzcom. Teixeira had been employed by Vozzcom from approximately November 2006 until April 2007, performing cable installation and related services for Vozzcom. (See Teixeira Complaint ("Teixeira Compl."), Exhibit A, [D.E. 27-2]). In his lawsuit, Teixeira claimed that during his employment with Vozzcom, Vozzcom engaged in violations of the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq. (See id.). Beazley secured defense counsel for Vozzcom and paid Vozzcom's legal bills defending the Teixeira claim. (See Beazley's Mot. at 1).

The following year, rather than renewing its policy with Beazley, Vozzcom obtained a similar employment practices liability policy from Great American. (See id.). The Great American policy had a coverage period from January 1, 2008 through December 31, 2008. (See id. at 1-2).

On January 17, 2008, another former Vozzcom employee, Francisco DaSilva, filed suit against Vozzcom alleging FLSA violations. (See Great American Insurance Company's Motion for Summary Judgment ("Great American's Mot.") [D.E. 27] at 3; see DaSilva Complaint ("DaSilva Compl."), Exhibit B [D.E. 27-3]). DaSilva worked for Vozzcom between September 2006 and April 2007, and, like Teixeira, had performed cable installation and related services.

Vozzcom notified Beazley about the DaSilva claim, seeking coverage for the defense of the lawsuit. (See Beazley's Mot. at 4). Beazley denied coverage on the ground that the DaSilva claim was commenced after the expiration of the Beazley policy period. (See id.). Vozzcom then notified Great American of the claim, again seeking coverage for the defense of the claim. (See id.). Great American denied coverage on the ground that the claim "arose" during the Beazley coverage period. (See id.).

The Beazley policy contained the following relevant provisions:

THIS IS A CLAIMS MADE AND REPORTED POLICY. SUBJECT TO ITS TERMS, THIS POLICY APPLIES ONLY TO ANY CLAIM FIRST MADE AGAINST THE INSUREDS DURING THE POLICY PERIOD OR THE EXTENDED REPORTING PERIOD, IF APPLICABLE, PROVIDED SUCH CLAIM IS REPORTED IN WRITING TO THE INSURER AS SOON AS PRACTICABLE. WITHOUT NEGATING THE FOREGOING REQUIREMENTS, SUCH NOTICE OF CLAIM MUST ALSO BE REPORTED NO LATER THAN 60 DAYS AFTER THE END OF THE POLICY PERIOD OR, IF APPLICABLE, THE EXTENDED REPORTING PERIOD....

(Beazley Employment Practices Liability Insurance Coverage ("Beazley Policy"), Exhibit A[D.E. 26-2] at 2) (all emphasis in the text of the policy is in the original). NOTICE: This Coverage is Provided on a Claims Made and Reported Basis. Except to such extent as may otherwise be provided herein, the coverage afforded under this insurance policy is limited to liability for only those Covered Claims that are first made against an Insured and reported to us (in accordance with the provisions regarding notice) while the insurance is in force....

(Id. at 16).

I. COVERAGE: WHAT IS COVERED

A. We will pay Loss amounts that an Insured is legally obligated to pay on account of a Claim because of an Insured Event, provided such Claim is first made during the Policy Period or, if applicable, the Extended Reporting Period, and reported in writing to us as soon as practicable but in no event later than sixty (60) days after any Insured who is a principal, partner, officer, director, trustee, in-house counsel, Employee(s) within the Human Resources of Risk Management department of Employee(s) with personnel and risk management responsibilities, becomes aware that a Claim has been made. Without negating the foregoing requirements, such notice of Claim must also be reported no later than sixty (60) days after the end of the Policy Period or, if applicable, the Extended Reporting Period. The amount we will pay is limited as described in the LIMIT OF LIABILITY and SELF INSURED RETENTION sections of this policy.

(Id.).

III. WHEN COVERAGE IS PROVIDED

A. Claims are considered to be first made on the date the Claim is first commenced by the claimant and not the date any Insured is served or first receives notice of a Claim.

All Claims because of One Insured Event or, if purchased One Third Party Insured Event, will be considered to have been made on the date that the first of those Claims was first made.

(Id. at 20).

J. Insured Event means actual or alleged acts of Discrimination, Harassment, Retaliation and/or Inappropriate Employment Conduct, by an Insured against an Employee or former Employee or applicant for employment with an Insured entity. Insured Event shall not include Claims for actual or alleged violations of any federal, state or local Wage and Hour Laws or regulations.

(Id. at 29).

L. One Insured Event means (1) one or more covered allegations of Discrimination, Harassment, Retaliation and/or Inappropriate Employment Conduct which are related by an unbroken chain of events or (2) class action or multiple claimant or multiple plaintiff suits arising out of related Insured Events.

(Id. at 31).

As stated, the policy also contains a "Wage and Hour Enhancement Endorsement," which reads, in relevant part, as follows:

Effective date of this Endorsement: 01-January-2007

This Endorsement is attached to and forms a part of Policy Number:

V15FF207PNTE

Insurer: Beazley Insurance Company, Inc.

WAGE AND HOUR ENHANCEMENT ENDORSEMENT

This endorsement modifies insurance provided under the following

EMPLOYMENT PRACTICES LIABILITY POLICY

In consideration of the premium charged for the Policy, it is hereby understood and agreed that

1. Notwithstanding Section II WHAT IS NOT COVERED, Exclusions E, the Insurer agrees to provide Defense Costs coverage for Wage and Hour Claims.

For purposes of this endorsement, Wage and Hour Claim shall mean any Claim solely alleging violations of any Wage and Hour Law.

(Id. at 12).

The Great American policy also contains certain relevant provisions:

Section I. Insuring Agreements

A. The Insurer shall pay on behalf of the Insured Persons all Loss which the Insured Persons shall be legally obligated to pay as a result of a Claim (including an Employment Practices Claim or a Securities Claim) first made against the Insured Persons during the Policy Period or the Discovery Period for a Wrongful Act, except for any Loss which the Company actually pays as indemnification.

B. The Insurer shall pay on behalf of the Company all Loss which the Insured Persons shall be legally obligated to pay as a result of a Claim (including an Employment Practices Claim or a Securities Claim) first made against the Insured Persons during the Policy Period or the Discovery Period for a Wrongful Act, but only to the extent the Company is required or permitted by law to indemnify the Insured Persons.

(Great American Insurance Companies Policy ("Great American Policy"), Exhibit D [D.E. 27-5] at 4) (all emphasis in original).

A. "Claim" shall mean:

(1) a written demand for monetary or non-monetary relief made against any Insured and reported to the Insurer pursuant to Section VIII.A.(l);or

(2) a civil, criminal, administrative or arbitration proceeding made against any Insured seeking monetary or non-monetary relief and commenced by the service of a complaint or similar pleading, the return of an indictment, or the receipt or filing of notices of charges or similar document, including any proceeding initiated against any Insured before the Equal Employment Opportunity Commission or any similar governmental body.

(Id. at 5)

O. "Related Wrongful Acts" shall mean Wrongful Acts which are logically or causally connected by reason of any common fact, circumstance, situation, transaction, casualty, event or decision.

* * *

R. "Wrongful Act" shall mean:

(1) any actual or alleged act, omission, error, misstatement, misleading statement, neglect or breach of duty, or Employment Practices Wrongful Act, by any Insured Person in their capacity with the Company;

(2) any actual or alleged act, omission, error, misstatement, misleading statement, neglect or breach of duty by the Insured Entity, but only with respect to Insuring Agreement I.C;....

(Id. at 6).

Section IV. Exclusions

The Insurer shall not be liable to make any payment for Loss in connection with any Claim made against any Insured:

* * * B. based upon, arising out of, relating to, directly or indirectly resulting from or in...