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

Decision Date21 May 2018
Docket NumberCase No. 3:15-cv-1041-J-34PDB
PartiesZURICH AMERICAN INSURANCE COMPANY, Plaintiff, v. SOUTHERN-OWNERS INSURANCE COMPANY, Defendant.
CourtU.S. District Court — Middle District of Florida
ORDER

THIS CAUSE is before the Court on (1) Plaintiff, Zurich American Insurance Company's Motion for Final Summary Judgment (Doc. 88; ZAIC's Motion), filed on October 6, 2017; and (2) Defendant, Southern-Owners Insurance Company's Motion for Final Summary Judgment (Doc. 94; SOIC's Motion), filed on November 20, 2017. On October 20, 2017, Defendant Southern-Owners Insurance Company ("SOIC") filed Defendant Southern-Owners Insurance Company's Response in Opposition to Zurich American Insurance Company's Motion for Final Summary Judgment (Doc. 91; SOIC's Response), and on December 1, 2017, Plaintiff Zurich American Insurance Company ("ZAIC") filed Zurich American Insurance Company's Response to Southern Owners Insurance Company's Motion for Final Summary Judgment (Doc. 98; ZAIC's Response). With leave of Court, see Order (Doc. 96), ZAIC filed Zurich American Insurance Company's Reply to Southern Owners Insurance Company's Response to Zurich's Motion for Final Summary Judgment (Doc. 97; ZAIC's Reply) on November 28, 2017. Accordingly, these motions are ripe for review.

I. Background and Undisputed Facts

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. In the Underlying Action, McMillan asserted a negligence claim against Catamount Constructors, Inc. ("Catamount"). See generally Amended Complaint (Doc. 91-1; Underlying Amended Complaint). ZAIC undertook Catamount's defense and settled McMillan's claims against Catamount. See Plaintiff, Zurich American Insurance Company's Third Amended Complaint (Doc. 77; Third Amended Complaint) ¶¶18, 22; see generally ZAIC's Response to SOIC Second Request for Production (Docs. 88-9, 88-10, 88-11 and 88-12; collectively, Bill Analysis Report). In the instant action, ZAIC brings a claim for equitable subrogation to recover its defense costs and indemnity payment made on behalf of Catamount, or in the alternative, a claim for equitable contribution as to ZAIC's indemnity payment, based on the following undisputed facts. See generally Third Amended Complaint ¶24.

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 Subcontract Agreement Between Catamount and Duval (Doc. 88-1; Subcontract) at 2 ¶1. On April 12, 2012,Catamount and Duval Concrete Contracting ("Duval") executed the Subcontract, whereby Duval agreed to "furnish[ ] all labor, materials, tools, equipment and insurance necessary to" complete the Project. Id. Additionally, Duval agreed to "indemnify and hold Contractor [Catamount] harmless from all claims, losses, fines, penalties, assessments of damages arising out of Subcontractor's [Duval's] work or from Subcontractor's breach of any term hereof." Id. at 5 ¶19. Further, Duval agreed to maintain liability insurance which named Catamount as an additional insured, and would provide primary coverage to Catamount for any "liability arising out of" Duval's work. Id. at 4 ¶11, Attachment C.

B. Duval's Policy with SOIC

In accordance with the terms of the Subcontract, Duval purchased, and on April 19, 2011, SOIC issued a commercial general liability policy effective from June 15, 2011, through June 15, 2012. See Southern-Owners Insurance Company's Certified General Liability Insurance Policy No. 072322-78005160-11 (Doc. 88-2; SOIC Policy). According to the Blanket Additional Insured Endorsement (SOIC Policy at 42; the "Endorsement"), "[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 (emphasis added). Further, the SOIC Policy "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." Id. (emphasis added). The SOIC Policy defines "your work" as "(1) [w]ork or operations performed by you or on your behalf; and (2)[m]aterials, parts or equipment furnished in connection with such work or operations." See SOIC Policy at 41 ¶27.

C. Catamount's Policy with ZAIC

ZAIC issued a commercial insurance policy to Catamount, effective from March 1, 2012 through March 1, 2013. See Zurich American Insurance Company's Policy No. GLA 5490400-00 (Docs. 88-3 and 88-4; collectively, 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." Id. (Doc. 88-3) at 58 ¶4(1)(b). Further, the ZAIC Policy provided that "[w]hen this insurance is excess, we will have no duty . . . to defend the insured against any 'suit' if any other insurer has a duty to defend the insured against that 'suit.'" Id. at 58 ¶4(2).

D. The Underlying Action and ZAIC's Defense of Catamount

McMillan initiated the Underlying Action on December 13, 2012. See Underlying Action Docket (Doc. 90-2). On May 6, 2013, the state court granted McMillan's motion to file an amended complaint to add Catamount as a defendant. See Underlying Action Docket; Underlying Amended Complaint. On April 15, 2014, with leave of court, Catamount filed a third-party complaint against Duval for indemnification, contribution, and negligence.1 See Underlying Action Docket at 6. On January 6, 2015, McMillan, with Duval's consent, sought leave to file the Second Amended Complaint (Doc. 88-5;Underlying Second Amended Complaint) to add Duval as a defendant. See Plaintiff's Motion for Leave to Amend Complaint (Doc. 91-2; McMillan's Motion to Amend). The Underlying Action Docket shows no order resolving McMillan's Motion to Amend. See generally Underlying Action Docket. Nevertheless, on February 10, 2015, Duval filed an answer to the Underlying Second Amended Complaint, and then, as reflected by the filings on the Underlying Action Docket, Duval and the other named defendants litigated the Underlying Action based upon the Underlying Second Amended Complaint until the parties reached a settlement. See id.

In the Underlying Second Amended Complaint, McMillan asserted negligence claims against Catamount and Duval based on the following allegations. See Underlying Second Amended Complaint ¶¶25-42. On May 30, 2012, McMillan visited the Site and "slipped and fell due an accumulation of debris as he walked across an outside parking lot area of the bottling plant towards a port-o-let2 where Defendant Catamount had begun construction work and established a construction site," id. ¶28, and where "Duval had previously begun concrete cutting work and had established a construction site," id. ¶37. "The accumulation of debris on the outside walk ways was a defectively dangerous condition and/or the causes and/or origins thereof were created by and/or known to" Catamount and Duval, "or had existed for a sufficiently long period of time that said Defendant[s] in the exercise of reasonable care, should have known of said condition." Id. ¶¶30, 39. Catamount and Duval, each acting "for themselves or by and through their respective agents, employees or servants acting within the course and scope of theirrespective employments and authority," breached their respective duties of care owed to McMillan by:

a) failing to properly instruct their respective employees, agents, and/or servants as to the proper care and maintenance of the outer areas and walkways, and thereby knowingly permitting a dangerous condition(s) to remain on the premises to the peril of the Plaintiff, and/or
b) failing to provide reasonable and adequate warnings of the actually or constructively known dangerous condition(s) and/or the potential for danger and injury to the Plaintiff, and/or
c) failing to operate or maintain the premises in a reasonably safe condition for protection of the Plaintiff. [sic]
d) failing to maintain the outer area of the Defendant's business was [sic] caused a debris/slip condition and failing to provide a safe, slip-free walkway surface.

Id. ¶¶31, 40.

ZAIC initially assumed Catamount's defense. See Letter dated April 15, 2014, from Tom Finch, Claim Specialist, with Zurich American Insurance Company to Duval Concrete Contracting (Doc. 77-6; First Tender) at 2. Having done so, ZAIC hired the law offices of Conroy Simberg to represent Catamount. See generally Bill Analysis Report.

On the same day that Catamount filed the third-party complaint against Duval, ZAIC, pursuant to the Subcontract, tendered the defense and indemnity of Catamount to Duval and requested that Duval notify its insurer. See First Tender at 2-3. Upon ZAIC's discovery that SOIC issued a commercial general liability policy to Duval, ZAIC made a second tender to Duval, and a first tender to SOIC, on June 22, 2015. See Letter dated June 22, 2015 from Michele Mecca, MCU Specialist with Zurich American Insurance Company to O'Hara Law Firm, Southern-Owners Insurance Company and All Lines Insurance Agency, Inc.(Doc. 77-7; Second Tender).3 SOIC denied the Second Tender on July 30, 2015. See Letter dated July 30, 2015 from Mark F....

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