Xl Ins. America, Inc. v. Ortiz
| Decision Date | 06 November 2009 |
| Docket Number | Case No. 09-20630-CV. |
| Citation | 673 F.Supp.2d 1331 |
| Parties | XL INSURANCE AMERICA, INC., a foreign corporation, Plaintiff, v. Mark ORTIZ, Schratter Foods, Inc., d/b/a Corman Ship Supplies, a foreign corporation, and Floyd More, a Florida resident, Defendants. |
| Court | U.S. District Court — Southern District of Florida |
Julie Karen Linhart, Phelps Dunbar, LLP, Tampa, FL, for Plaintiff.
Christopher J. Lynch, Hunter Williams & Lynch, Coral Gables, FL, Derek Eduardo Leon, Joshua C. Prever, Morgan Lewis & Bockius, Miami, FL, for Defendants.
ORDER GRANTING SUMMARY JUDGMENT
This matter came before the Court on XL Insurance America, Inc.'s (the "Insurer") Motion for Summary Judgment (D.E. #41) and Mark Ortiz's Motion for Summary Judgment (D.E. # 40). The Court has reviewed the motions and associated responses, the record, and is otherwise duly advised in the premises. For the reasons set forth below, the Court determines that the Insurer is entitled to summary judgment in its favor and against the insured, Schratter Foods, Inc., and Ortiz, the judgment creditor and assignee of Alain Rodriguez's rights against the Insurer. Ortiz's motion is therefore denied.
This case is about the interpretation and application of the provisions of a commercial general liability insurance contract to a workplace accident resulting in the injury of one of Schratter Foods' employees. As with all contractual matters, the launching point of the Court's analysis is the text of the insurance contract it will interpret.
The Insurer issued a policy to Schratter Foods' parent corporation, Soparind Bongrain, providing Commercial General Liability coverage to Schratter Foods subject to certain terms, conditions, limitations, definitions, and exclusions. The CGL policy in question is divided into five sections and includes a series of endorsements that modify the terms of the coverage specified in the body of the policy. For purposes of the parties' dispute, the relevant policy sections are Sections I, II, IV, and V.1 Section I of the policy describes the coverage offered under the policy. The policy offers three types of coverage, two of which are at issue in this case.
Coverage A of the policy covers claims that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which the insurance applies. Coverage B of the policy covers claims that the insured becomes legally obligated to pay as damages because of "personal and advertising injury" to which the insurance applies.
Section II of the policy identifies who is eligible for coverage under Coverages A and B of the policy. That section, in pertinent part, defines the insureds as Schratter Foods' employees,
a. ... but only for acts within the scope of their employment by [Schratter Foods] or while performing duties related to the conduct of [Schratter Foods'] business. However, none of these "employees" ... are "insureds" for:
(1) "Bodily injury" or "personal and advertising injury":
(a) To ... a co-"employee" while in the course of his or her employment or performing duties related to the conduct of [Schratter Foods'] business ....
Coverages A and B both contain certain exclusions. Under those exclusions, the Insurer is not required to cover a claim, even if the policy would appear to apply to one of the insureds identified in Section II of the policy. One relevant exclusion that appears in Coverage A is the "Workers' Compensation and Similar Laws" exclusion. Under that exclusion the policy does not cover "[a]ny obligation of the insured under a workers' compensation, disability benefits or unemployment compensation law or any similar law." Another exclusion is known as the "Employer's Liability Exclusion." That exclusion excludes coverage for bodily injury to
(1) An "employee" of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured's business; or ....
This exclusion applies:
(1) Whether the insured may be liable as an employer or in any other capacity; and
(2) To any obligation to share damages with or repay someone else who must pay damages because of the injury.
Section IV of the policy sets forth the conditions under which the insurance policy applies. One of those conditions— known as the "Duties in the Event of Occurrence, Offense, Claim or Suit" condition—requires the insured to notify the Insurer "as soon as practicable of an `occurrence' or an offense which may result in a claim."2 And "[i]f a claim is made or `suit' is brought against any insured," the insured must "[i]mmediately record the specifics" of the lawsuit and "[n]otify the Insurer as soon as practicable." This obligation to notify the Insurer includes an obligation to supply certain information and cooperate in the Insurer's investigation of the claim. Finally, the notice provision provides that "[n]o insured will, except at the insured's cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without [the Insurer's] consent."
At the center of this insurance coverage dispute is an accident that occurred at Schratter Foods' warehouse in Miami on April 14, 2005. The accident involved Mark Ortiz and Alain Rodriguez, co-workers at Schratter Foods' warehouse. While Ortiz and Rodriguez were working at the warehouse, four of Ortiz's fingers on his right hand were severed as he climbed off of a forklift. The parties disagree, and there is contradicting evidence, on some facts surrounding the accident.
For example, Ortiz claims that working with pallet jacks and forklifts was within his normal scope of work. (D.E. # 41-9 at 13:22-25-14:1.) His explanation of the accident is as follows:
Q. Can you explain to me what happened?
A. I had asked—I went to the back room and I had asked Alain [Rodriguez] if I could use the forklift. Then he said sure. I waited for him to finish. As soon as he was done, he told me to jump on the forks to take him to his pallet job.[3] Once we got there, he started lifting me up, put—you know, lifted the forks full range to the top and left me up there and went to the back room. When he came out of the back room, there was—I guess he was getting other people. When he came out of the back room, I was climbing down, he jumped on the forklift and started moving the forks down.
(Id. at 15:23-25-16:1-10.) When Rodriguez began to lower the forks, Ortiz's fingers became entangled in the machinery, causing the amputation of four of his fingers. Ortiz testified that he never knew that Rodriguez intended to lift him up on the forks, and if he had known that, he would not have gotten on the forks. (Id. at 38:15-19.)
Rodriguez has a different version of the forklift accident. Specifically, Rodriguez testified:
Q. Please describe for me what happened on April 14, 2005, with Mark Ortiz?
....
A. I was at the machinery using a double reacher when Mark tried to help me pick up a box. And I lifted him up to the machine that was on top and he thought I was going to leave it up here. He goes behind the machinery and when I look up I saw he was coming down from the back.
And I start lower the machinery because I saw he was coming down and I heard him scream. And I got scared when I heard him and I stop and I look up.
He was standing on the roof. Well, this is the kind of equipment you can—that you have to operate it standing. And then when I look up I saw him standing on the roof and when he comes down to the floor I see his hand was hurt, his fingers were hurt.
(D.E. # 41-12 at 17:2-21.) Rodriguez reiterates that using the forklift for transportation was common practice. (Id. at 24:1-10.) Throughout his deposition, Rodriguez denies that he intended to play a prank on Ortiz when he lifted him in the air, although he acknowledges that other employees had played such pranks in the past. (Id. at 52:24-25-53:1-11.) At the conclusion of his deposition, Rodriguez testifies that, on the day of the accident, he had a conversation with Ortiz to create a story that would make Rodriguez seem less culpable because Rodriguez was scared that he would lose his job at Schratter Foods. (Id. at 62:7-25-63:1-11.)
The accident reports prepared by a Schratter Foods employee have yet another version of the accident. One states that Ortiz approached Rodriguez "to ask him to use the forklift for a minute" and while Ortiz spoke to Rodriguez, Ortiz rested his hand "on the hydraulic scissor part of the extended fork" which was out of Rodriguez's view. At some point, Rodriguez lowered the forks and heard Ortiz scream. (D.E. #41-17.) The same story is repeated in an accident report prepared on the forklift's lessor's form. (D.E. # 41-18.)
Whether the accident occurred as the result of Rodriguez's prank or in the course of the employees' ordinary scope of work is a disputed fact. But the common thread in all of the stories is that Ortiz was engaged in his regular duties as a warehouse employee when the forklift accident occurred.4 The uncontroverted evidence presented to the Court is that Ortiz and Rodriguez were alone when the incident began. Accordingly, no other witness is available to contradict Ortiz and Rodriguez's testimony that Ortiz was engaged in his normal job duties when the events leading to his injury commenced.
Officials at the warehouse were aware of the accident resulting in Ortiz's injury on the same day it occurred. (D.E. # 49-1 at 26:23-24-27:1-13.) Schratter Foods' corporate affairs officer, Adeline Schlesinger, apparently prepared at least one of the above-mentioned accident reports on the day of the forklift accident. The accident report that Schratter Foods submitted to the forklift's lessor is dated April 27, 2005. (D.E. # 41-18.) Although the record is unclear as to when Schratter Foods' general cou...
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