Zurich Am. Ins. Co. v. Southern-Owners Ins. Co.

• Decision Date: 30 March 2017
• Docket Number: Case No. 3:15-cv-1041-J-34PDB.
• Citation: 248 F.Supp.3d 1268
• Parties: ZURICH AMERICAN INSURANCE COMPANY, Plaintiff, v. SOUTHERN–OWNERS INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Florida

248 F.Supp.3d 1268

ZURICH AMERICAN INSURANCE COMPANY, Plaintiff,

v.SOUTHERN–OWNERS INSURANCE COMPANY, Defendant.

Case No. 3:15-cv-1041-J-34PDB.

United States District Court, M.D. Florida, Jacksonville Division.

Signed March 30, 2017

Dale Scott Dobuler, Douglas M. McIntosh, Ilana Lazarus, Thomas M. Hartwig, Brian Matthew Engel, McIntosh, Sawran & Cartaya, PA, Ft. Lauderdale, FL, for Plaintiff.

Giovanni Stewart, Michael Fox Orr, Taylor Jarman, Dawson Orr, PA, Jacksonville, FL, for Defendant.

ORDER

MARCIA MORALES HOWARD, United States District Judge

THIS CAUSE is before the Court on Defendant, Southern–Owners Insurance Company's Motion to Dismiss Zurich American Insurance Company's Second Amended Complaint for Failure to State a Cause of Action (Doc. 49; Motion), filed on September 1, 2016. Plaintiff, Zurich American Insurance Company (Plaintiff or ZAIC), filed a response on September 15, 2016. See Plaintiff, Zurich American Insurance Company's, Response to Defendant, Southern–Owners Insurance Company's, Motion to Dismiss Zurich's Second Amended Complaint [sic] (Doc. 51; Response). Thereafter, Defendant, Southern–Owners Insurance Company (Defendant or SOIC), filed a reply on October 18, 2016.¹ See Defendant, Southern–Owners Insurance Company's Reply to Plaintiff, Zurich's Response to Defendant's Motion to Dismiss (Doc. 54; Reply). Pursuant to a Court order entered on January 30, 2017, directing the parties to submit supplemental briefs to address whether ZAIC's claim for declaratory relief presents a claim or controversy appropriate for judicial action, see Order (Doc. 61; Order), ZAIC and SOIC each filed supplemental briefs on February 9, 2017, see Defendant Southern–Owners Insurance Company's Supplemental Brief Per January 30, 2017 Court Order (Doc. 64; SOIC Supplemental Brief), and Plaintiff, Zurich American Insurance Company's Supplemental Briefing on Count I of its Complaint (Doc. 65; ZAIC Supplemental Brief). Accordingly, this matter is ripe for review.

I. Background

This dispute between two insurers arises from an underlying premises liability action, Case No. 2012–CA–13359 (Underlying Action), filed by Charles McMillan (McMillan) in the Circuit Court, Fourth Judicial Circuit, In and For Duval County Florida. See Plaintiff, Zurich American Insurance Company's Second Amended Complaint (Doc. 42; Second Amended Complaint), Ex. D: McMillan's Second Amended Complaint in the Circuit Court, Fourth Judicial Circuit, in and for Duval County, Florida, Case No. 2012–CA–13359 (Underlying Complaint). In the Underlying Action, McMillan asserted negligence claims against Catamount Constructors, Inc. (Catamount) and Duval Concrete Contracting, Inc. (Duval; collectively, Underlying Defendants). See generally Underlying Complaint. ZAIC "resolved the Underlying Action on behalf of Catamount." See Second Amended Complaint ¶ 19. In the instant action, ZAIC seeks a declaration that SOIC owed a duty to defend and indemnify Catamount in the Underlying Action, and also brings claims for equitable subrogation or, in the alternative, common law contribution against SOIC, based on the following facts as alleged in the Second Amended Complaint and the attached exhibits. See generally id.

A. The Subcontract Between Catamount and Duval

Catamount served as the general contractor for a construction project in which it contracted to furnish and install a complete gravel/sand sub-base package (the project) at the Dr. Pepper West Point Trade Center, a distribution warehouse, located at 2300 Pickettville Road, Jacksonville, Florida 32220 (the Site). See Second Amended Complaint ¶¶ 6–7; Ex A: Subcontract Agreement Between Catamount and Duval (Subcontract) at 1. On April 12, 2012, Catamount and Duval executed the Subcontract, whereby Duval agreed to "furnish[ ] all labor, materials, tools, equipment and insurance necessary to" complete the project. See Second Amended Complaint ¶ 7. The terms of the Subcontract required Duval to maintain liability insurance naming Catamount as an additional insured, and providing primary coverage, for any liability arising from Duval's work. Id. at ¶ 8; Subcontract at ¶ 11, Attachment C. Specifically, the Subcontract provides:

Paragraph 11. Insurance. Subcontractor shall comply with the insurance requirements as set forth in ATTACHMENT "C" prior to commencing work on the above referenced Project.

Attachment C: Subcontract Agreement Insurance Requirements

Subcontractor hereby agrees to maintain throughout the progress of the Work and to provide evidence of coverage for the following insurance:

Commercial General Liability

   General aggregate for this project         2,000,000
                   Products/Completed Operations aggregate    1,000,000
                   Personal and Advertising Injury            1,000,000
                   Each occurrence                            1,000,000
                

Coverages to be included: Contractual liability, Explosion, Collapse and Underground (XCU), Independent Contractors Coverage, Personal Injury (Agreements A, B, and C), including coverage for suits brought by employees of sub-subcontractors.

Coverage shall be written on an occurrence basis. Subcontractor's insurance shall be primary. Completed operations coverage shall remain in effect for at least two (2) years after substantial completion of the project. Catamount Constructors, Inc.–Atlanta shall be added and endorsed as a named additional insured on the policy.

(emphasis supplied). Accordingly, Duval agreed to have Catamount named as an additional insured under its commercial general liability policy.

B. Duval's Policy with SOIC

As per the Subcontract, Duval purchased a commercial general liability policy from SOIC, effective from June 15, 2011, through June 15, 2012, see Second Amended Complaint ¶ 9, Ex B: Southern–Owners Insurance Company's Certified General Liability Insurance Policy No. 072322–78005160–11 (SOIC Policy), with a blanket additional insured endorsement, see SOIC Policy, Endorsement CGL 55372 (1–07) (Endorsement). The Endorsement provides that "[a] person or organization is an Additional Insured, only with respect to liability arising out of "your work" for that Additional Insured by or for you [Duval]... If required in a written contract or agreement." See Endorsement. The SOIC Policy defines "your work" as "(1) [w]ork or operations performed by you [Duval] or on your behalf; and (2) [m]aterials, parts or equipment furnished in connection with such work or operations." See SOIC Policy, Definitions. The Endorsement specifies that the "insurance is primary for the Additional Insured, but only with respect to liability arising out of 'your work' for that Additional Insured by or for you. Other insurance available to the Additional Insured will apply as excess insurance and not contribute as primary insurance to the insurance provided by this endorsement." See Endorsement. Accordingly, ZAIC alleges Catamount is an additional insured under the SOIC Policy. See Second Amended Complaint ¶¶ 15, 23–24.

C. Catamount's Policy with ZAIC

ZAIC issued a commercial insurance policy to Catamount, effective from March 1, 2012 through March 1, 2013. See Second Amended Complaint, Ex C: Zurich American Insurance Company's Policy No. GLA 5490400–00 (ZAIC Policy). The ZAIC Policy provided excess insurance "over [a]ny other primary insurance available to you [Catamount] covering liability for damages arising out of the premises or operation, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement." See ZAIC Policy, Commercial General Liability Form, Section IV—Commercial General Liability Conditions, 4. Other Insurance. ZAIC alleges that "[p]ursuant to the terms and conditions of the Subcontract and the terms and conditions of the SOIC Policy and the ZAIC Policy, SOIC [wa]s the primary insurer for Catamount, and the ZAIC Policy [wa]s ... excess to the SOIC [P]olicy." See Second Amended Complaint ¶ 26.

D. The Underlying Complaint

In the Underlying Complaint, McMillan alleged that on May 30, 2012, he "slipped and fell due to an accumulation of debris as he walked ... towards a port-o-let² where Defendant Catamount had begun construction work and established a construction site," and where "Duval had previously begun concrete cutting." See Underlying Complaint ¶¶ 28, 37. McMillan alleged that "[t]he accumulation of debris ... was a defectively dangerous condition and/or the causes and/or origins thereof were created by and/or known to ... [the Underlying Defendants], or had existed for a sufficiently long period of time that ... [the Underlying Defendants], in the exercise of reasonable care, should have known of." Id. at ¶ 30. McMillan claimed that Catamount and Duval, "for themselves or by and through their respective agents, employees or servants acting within the course and scope of their respective employments and authorities," caused McMillan's injuries by breaching their duties of care. Id. at ¶¶ 31–32, 40–41. Specifically, the Underlying Defendants allegedly breached their duties by: (1) "failing to properly instruct" their employees and agents "as to the proper care and maintenance" of the [S]ite; (2) "failing to provide reasonable and adequate warnings of the actually or constructively known dangerous condition(s)"; (3) "failing to operate or maintain the premises in a reasonably safe condition"; and (4) "failing to maintain" the area where McMillan slipped by "failing to provide a safe, slip-free walkway surface." Id. at ¶¶ 31, 40

E. Catamount's Request for a Defense

ZAIC initially assumed Catamount's defense because it "was not aware at that time that Catamount was a primary insured under the SOIC Policy." See Second Amended Complaint ¶ 15. On April 15, 2014, pursuant to the Subcontract, ZAIC tendered the defense and indemnity of Catamount to Duval and requested that Duval notify its insurer. See Second Amended Complaint ¶ 16, Ex. E: Letter dated April 15, 2014, from Tom Finch, Claim Specialist, with Zurich American...