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Atain Specialty Ins. Co. v. T. Disney Trucking & Grading, Inc.

United States District Court for the Middle District of Florida, Jacksonville Division

September 15, 2023, Decided; September 15, 2023, Filed

Case No.: 3:21-cv-01097-CRK

ATAIN SPECIALTY INSURANCE COMPANY, Plaintiff, EVANSTON INSURANCE COMPANY, Plaintiff-Intervenor v. T. DISNEY TRUCKING AND GRADING, INC. et al., Defendants.

Prior History: Atain Specialty Ins. Co. v. T. Disney Trucking & Grading, Inc., 2022 U.S. Dist. LEXIS 4574, 2022 WL 93536 (M.D. Fla., Jan. 7, 2022)

Core Terms

insured, coverage, duty to defend, independent contractor, Counterclaim, lawsuit, argues, indemnify, declaratory judgment, no duty, ripe, subcontractor, requesting, truck, tractortrailer, bodily injury, summary judgment motion, summary judgment, contractor, employees, reasons, struck, metal, load, declaratory, complaints, reservation of rights letter, duty to indemnify, property damage, motor vehicle

Counsel:  [*1] For Atain Specialty Insurance Company, Plaintiff: Richard E. Zelonka, Jr., Wood, Smith, Henning & Berman, LLP, Atlanta, GA.

For T. Disney Trucking and Grading, Inc., Defendant: Kristen Marie Jarvis Johnson, LEAD ATTORNEY, Taylor Johnson PL, Winter Haven, FL; John Lawrence Marchione, Taylor & Associates, Winter Haven, FL.

For Ruben Sanchez, Defendant: Arlen Mason Weintraub, LEAD ATTORNEY, Law Offices of Anidjar & Levine, P.A., Ft. Lauderdale, FL.

Judges: Claire R. Kelly, Judge*.

Opinion by: Claire R. Kelly

Opinion

OPINION AND ORDER RE: CROSS-MOTIONS FOR SUMMARY JUDGMENT

INTRODUCTION

Before the Court are three motions for summary judgment concerning the obligations of insurer Atain Specialty Insurance Company (“Atain”) and excess insurer Evanston Insurance Company (“Evanston”) towards insured party T. Disney Trucking and Grading, Inc. (“T. Disney”) arising from a construction accident.1 Each party requests declaratory relief establishing its obligations under the commercial general liability policies issued by Atain and Evanston to T. Disney. For the following reasons, Atain and Evanston’s motions for summary judgment are granted, and T. Disney’s motion for summary judgment is denied.

BACKGROUND

The following facts [*2]  are not in dispute.2 On July 28, 2020, T. Disney was involved in a construction project located off of S.R. 19 in Palatka, Florida. See Compl. Ex. B ¶ 36, Sept. 13, 2022, ECF No. 77-2; see also T. Disney Answer ¶ 16, Sept. 27, 2022, ECF No. 79. During the course of construction, several trucks involved in the project were stopped in the continuous left turn lane. Compl. Ex. B ¶ 92; T. Disney Answer ¶ 24. Carlos L. Diaz Figueras was one of the drivers stopped in the middle lane, as was Ruben Sanchez. Compl. Ex. B ¶ 92; T. Disney Answer ¶ 25. Diaz got out of his vehicle and walked to coordinate completion of deliveries with the other drivers. Compl. Ex. B ¶ 92; T. Disney Answer ¶ 25. While Diaz was standing and coordinating the deliveries, a tractortrailer hauling machinery was travelling in the opposite direction in an adjacent lane. Compl. Ex. B ¶ 93; T. Disney Answer ¶ 24-25. A metal piece from the tractortrailer‘s load struck Diaz as the truck was passing by, and killed him. Compl. Ex. B ¶ 93; T. Disney Answer ¶ 26. The tractortrailer also collided with Sanchez, injuring him. Compl. Ex. A ¶ 23, Sept. 13, 2022, ECF No. 77-1; T. Disney Answer ¶ 17.

At the time of the [*3]  accident, T. Disney possessed commercial general liability coverage through a policy issued by Atain. Compl. Ex. G at 1, Sept. 13, 2022, ECF No. 77-7; T. Disney Answer ¶ 36. The policy provides that Atain will “pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Compl. Ex. G at 69; T. Disney Answer ¶ 37. The policy also specifies Atain has a “duty to defend the insured against any ‘suit’ seeking those damages.” Compl. Ex. G at 69; T. Disney Answer ¶ 37. Coverage under the policy is subject to several exclusions, including the “auto exclusion” and “employer exclusion.” The auto exclusion provides that coverage does not apply to:

(2) “Bodily injury” or “property damage” arising out of or in connection with any “auto” unless outlined below; or

(3) “Bodily injury” or “property damage” arising out of or in connection with the “loading or unloading” of any aircraft, “auto” or watercraft by any insured unless as outlined below.

This exclusion applies to “bodily injury” or “property damage” arising out of any aircraft, “auto” or watercraft, whether or not owned, maintained, used, rented, [*4]  leased, hired, loaned, borrowed or entrusted to others or provided to another by any insured.

Compl. Ex. G at 40; T. Disney Answer ¶ 40. The policy defines an “auto” as a “land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment.” Compl. Ex. G at 81; T. Disney Answer ¶ 36. Similarly, the employer exclusion excludes coverage for:

“Bodily injury” to an “employee,” subcontractor, employee of any subcontractor, “independent contractor,” employee of any “independent contractor,” “temporary worker,” “leased worker,” “volunteer worker” of any insured or any person performing work or services for any insured arising out of and in the course of employment by or service to any insured for which any insured may be held liable as an employer or in any other capacity;

Compl. Ex. G at 36; T. Disney Answer ¶ 36. The employer exclusion further specifies that “independent contractors,” as used in the exclusion, also applies to “subcontractors and any employees of a subcontractor.” Compl. Ex. G at 36; T. Disney Answer ¶ 36.

In addition to the Atain policy, T. Disney possesses an excess liability policy issued by Evanston. See Evanston [*5]  Am. Interv. Compl. ¶ 56, Oct. 12, 2022, ECF No. 84; see also [T. Disney’s] Mot. Dismiss ¶ 16, Oct. 26, 2022, ECF No. 87. The Evanston policy provides that Evanston “will pay those sums in excess of the limits [of the Atain policy], provided that the ‘underlying insurance’ also applies . . . .” Evanston Am. Interv. Compl. ¶ 58; [T. Disney’s] Mot. Dismiss ¶ 18. The policy further provides that Evanston is subject to the same terms, conditions, and exclusion as the Atain policy. See Evanston Am. Interv. Compl. ¶ 58, 60, 61; see also [T. Disney’s] Mot. Dismiss ¶ 19.

Following the accident, Sanchez and Laura E. Trujillo, as the personal representative of the Estate of Carlos L. Diaz Figueras (“the Estate”) filed separate lawsuits against T. Disney. On December 2, 2020, Sanchez filed a negligence action, seeking damages from T. Disney for bodily injuries sustained during the accident, serving T. Disney on December 28, 2020. See Compl. Ex. A. On March 8, 2021, in response to Sanchez’ lawsuit, Atain issued a reservation of rights letter to T. Disney, stating that it could deny coverage under the policy, and that Atain would defend T. Disney subject to its reservations. Compl. ¶ 30; T. Disney [*6]  Answer ¶ 30. The attorney appointed by Atain began to represent T. Disney in the Sanchez lawsuit on or about March 22, 2021. T. Disney Answer at 15; Atain Resp. Def. Mot. Summ. J. at 3, Apr. 25, 2023, ECF No. 139. On December 1, 2021, Atain claims the Estate sent it a policy limits demand letter prior to filing suit. Compl. ¶ 20. Atain responded to the policy letter by issuing a supplemental reservation of rights letter to T. Disney, again advising that coverage could be denied. Compl. ¶ 32; T. Disney Answer ¶ 32. On July 27, 2022, the Estate added T. Disney as a defendant in its lawsuit for wrongful death. See Compl. Ex. B. On August 3, 2022, Atain issued a second supplemental reservation of rights letter to T. Disney, again advising that coverage could be denied, and stating that Atain would defend T. Disney in the Estate’s lawsuit. Compl. ¶ 34; T. Disney Answer ¶ 34.

Procedural History

On September 13, 2022, Atain filed its fourth amended complaint against T. Disney, Sanchez, and the Estate, requesting declaratory judgment from the Court as to its obligations to defend and indemnify T. Disney in the two ongoing lawsuits. See Compl. at 17-18. On September 27, 2022, T. Disney and the [*7]  Estate each filed counterclaims against Atain seeking, inter alia, a declaratory judgment that neither policy exclusion cited by Atain applies. See T. Disney Answer at 22-23; [Estate] Answer and Affirm. Defenses Pl.’s Fourth Am. Compl. & Counterclaim, Sept. 27, 2022, ECF No. 80; Atain Answer [Estate’s] Compl. & Counterclaim, Oct. 17, 2022, ECF No. 85; Atain Answer [T. Disney’s] Counterclaim, Oct. 17, 2022, ECF No. 86. On October 12, 2022, Evanston filed an intervening complaint, requesting declaratory judgment that Evanston has no duty to defend or indemnify T. Disney in either the Sanchez or Estate lawsuit. See [Evanston’s] Am. Interv. Compl. for Declaratory J., Oct. 12, 2022, ECF No. 84; see also [Estate’s] Answer & Counterclaim Evanston’s Interv. Compl., Oct. 26, 2022, ECF No. 88; Evanston’s Answer to [Estate’s] Counterclaim, Nov. 30, 2022, ECF No. 94. On October 26, 2022, T. Disney filed a motion to dismiss or stay parts of Evanston’s intervening complaint for lack of subject matter jurisdiction. See [T. Disney’s] Mot. Dismiss, Oct. 26, 2022, ECF No. 87; see also [Evanston’s] Resp. [T. Disney’s] Mot. Dismiss, Nov. 30, 2022, ECF No. 95; [T. Disney’s] Reply Supp. Mot. Dismiss, Jan. [*8]  10, 2023, ECF No. 104.

On March 8, 2023, Atain moved for summary judgment, including summary judgment on T. Disney’s and the Estate’s counterclaims, requesting a declaration that it is not required to indemnify or defend T. Disney, and requesting to recoup its costs already incurred in T. Disney’s defense. See [Atain] Mot. Summ. J. at 24-25, Mar. 8, 2023, ECF No. 111 (“Atain Mot.”); see also [T. Disney’s] Resp. Opp. Pl.’s Mot. Summ. J., Apr. 5, 2023, ECF No. 119 (“T. Disney Resp. Br.”); [Sanchez’] Opp. Pl.’s Mot. Summ. J., Apr. 5, 2023, ECF No. 121; [Estate’s] Opp. Pl.’s Mot. Summ. J., Apr. 24, 2023, ECF No. 137; [T. Disney’s] Reply [Sanchez’] Resp. Opp. Pl.’s Mot. Summ. J., Apr. 19, 2023, ECF No. 127; [T. Disney’s] Reply [Estate’s] Resp. Opp. Pl.’s Mot. Summ. J., May 8, 2023, ECF No. 149. On April 5, 2023, T. Disney moved for summary judgment, requesting a declaration that Atain must defend and indemnify it under the policy. See [T. Disney] Mot. Summ. J. at 25, Apr. 5, 2023, ECF No. 120 (“T. Disney Mot.”); see also [Atain’s] Resp. Def.’s Mot. Summ. J., Apr. 25, 2023, ECF No. 139; [Evanston’s] Resp. Def.’s Mot. Summ. J., May 10, 2023, ECF No. 151; [T. Disney’s] Reply [Atain’s] Resp. [*9]  Opp. Def.’s Mot. Summ. J., May 23, 2023, ECF No. 157; [T. Disney’s] Reply [Evanston’s] Resp. Opp. Def.’s Mot. Summ. J., May 24, 2023, ECF No. 158. T. Disney also requests that the Court enter summary judgment in its favor on its counterclaim and Evanston’s intervening complaint, award it $9,190.98 in attorneys’ fees for its initial defense of the Sanchez lawsuit, and award it reasonable costs and attorney’s fees. See T. Disney Mot. at 25. On May 24, 2023, Evanston moved for summary judgment on its claim as well as T. Disney’s and the Estate’s counterclaims, requesting a declaration that Evanston has no duty to defend or indemnify T. Disney pursuant to the policy exclusions. See [Evanston] Mot. Summ. J. at 5, May 24, 2023, ECF No. 159 (“Evanston Mot.”); see also [T. Disney’s] Resp. [Evanston’s] Mot. Summ. J., July 5, 2023, ECF No. 163; [Estate’s] Resp. [Evanston’s] Mot. Summ. J., June 29, 2023, ECF No. 162; [Evanston’s] Reply [T. Disney’s] Resp. Opp. [Evanston’s] Mot. Summ. J., July 7, 2023, ECF No. 164; [Evanston’s] Reply [Estate’s] Resp. Opp. [Evanston’s] Mot. Summ. J., July 7, 2023, ECF No. 165. All three summary judgment motions have been fully briefed.

JURISDICTION AND APPLICABLE [*10]  LAW

The Court has jurisdiction over “all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between . . . citizens of different States.” 28 U.S.C. § 1332(a).

The Court will grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Issues of fact are genuine “only if a reasonable jury, considering the evidence presented, could find for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). A fact is “material” if it may affect the outcome of the suit under governing law. See id. In order to survive summary judgment, a nonmoving party must set forth specific facts showing there is a genuine issue for trial. See Johnson v. New Destiny Christian Ctr. Church, Inc., 826 F. App’x 766, 770 (11th Cir. 2020) (citing Anderson, 477 U.S. at 249-50).

This action was initiated on the basis of diversity of citizenship, and therefore Florida law applies to any issues not governed by the Constitution or treaties of the United States or acts of Congress. See Mid-Continent Cas. Co. v. Am. Pride Bldg. Co., LLC, 601 F.3d 1143, 1148 (11th Cir. 2010); see also28 U.S.C. § 1652 (2018).

DISCUSSION

The Court considers three cross-motions for summary judgment requesting declaratory relief. The parties’ motions raise three issues: (1) whether Atain and Evanston have a duty to defend T. Disney (2) whether [*11]  Atain and Evanston have a duty to indemnify T. Disney, and (3) whether any party should be awarded attorneys’ fees. The material facts are not disputed. As a preliminary matter, T. Disney argues that some of the claims are not ripe. See T. Disney Mot. at 22-23. For the following reasons, the Court concludes that all of the claims are ripe, grants Atain and Evanston’s motions, and denies T. Disney’s motion.

I. Ripeness

T. Disney argues that Evanston’s request for declaratory judgment on both its duty to defend and its duty to indemnify is premature. Evanston argues that there is a justiciable controversy regarding its duty to defend. See [Evanston’s] Resp. Def.’s Mot. Summ. J. 1t 19-20, May 10, 2023, ECF No. 151. For the following reasons, both of Evanston’s and Atain’s claims are ripe for resolution through declaratory judgment.

The Court has subject matter jurisdiction over Evanston’s and Atain’s claims pursuant to 28 U.S.C. § 1332 and may issue a declaratory judgment pursuant to 28 U.S.C. § 2201. Nonetheless, generally, a claim for indemnification is not ripe for adjudication if there has not been a resolution of the underlying claim. See Mid-Continent Cas. Co. v. Delacruz Drywall Plastering & Stucco, Inc., 766 Fed. Appx. 768, 770-71 (11th Cir. 2019). However, pursuant to the Declaratory Judgment Act, 28 U.S.C. § 2201, et seq., courts determine whether an actual case or controversy [*12]  exists for ripeness purposes on a case-by-case basis. See Hendrix v. Poonai, 662 F.2d 719, 721-22 (11th Cir. 1981). A controversy exists when “the facts alleged, under all the circumstances, show that there is a substantial controversy . . . of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Cas. Co. v. Pacific Coal & Oil Co., 312 U.S. 270, 273, 61 S. Ct. 510, 85 L. Ed. 826 (1941) (citation omitted).

The Eleventh Circuit has recognized “[t]hat the liability may be contingent does not necessarily defeat jurisdiction of a declaratory judgment action.” GTE Directories Pub. Corp. v. Trimen America, Inc., 67 F.3d 1563, 1569 (11th Cir. 1995) (citation omitted); see also Hous. Specialty Ins. Co. v. Titleworks of Sw. Fla., Inc., No. 2:15-cv-219, 2015 U.S. Dist. LEXIS 126780, 2015 WL 5599175 at *7-*11 (M.D. Fla. 2015) (declaratory judgment appropriate when allegations necessarily sought indemnification under a liability policy). The Court further explained that:

It is clear that in some instances a declaratory judgment is proper even though there are future contingencies that will determine whether a controversy ever actually becomes real. The familiar type of suit in which a liability insurer seeks a declaration that it will not be liable to indemnify an insured person for any damages the injured person may recover against the insured is an example. The injured person may not sue or he may not obtain a judgment against the insured, but there is held to be sufficient controversy between the insurer and the injured person that a [*13]  declaratory judgment is permissible.

Id. (quoting Wright, Miller & Kane, Fed. Prac. & Proc. Civ. § 2757 (2nd ed.)).

T. Disney only explicitly opposes as premature Evanston’s request for declaratory judgment on its duty to defend or indemnify. See T. Disney Mot. at 22-23. However, the Court necessarily addresses whether either indemnification claim is ripe. Although Atain does not expressly state that it is seeking a judgment with respect to “indemnity,” the content of Atain’s complaint and its motion for summary judgment require that the Court rule on this issue:

This action is brought pursuant to 28 U.S.C. § 2201 and seeks declaratory relief as to Atain’s obligations for the Underlying Lawsuit to the Insured Party, or any of the other potential defendants, under a policy of insurance issued to the Insured Party. Atain is uncertain as to its duties, rights, and obligations and files this declaratory judgment action to resolve questions of coverage under the insurance policy, including its duty to defend and/or indemnify the Insured Party in the Underlying Lawsuit. An actual and justiciable dispute over those duties, rights, and obligations exists between the parties.

Compl. ¶ 13. Additionally, in its [*14]  motion for summary judgment, Atain asks the Court to “issue a declaratory ruling that Atain’s Policy does not provide coverage for the Underlying Lawsuits.” See Atain Mot. at 25. Therefore, consistent with Atain’s request for relief, the Court considers whether Atain, and Evanston have a duty to defend and indemnify T. Disney. The Court also considers whether Evanston’s request for a ruling on its duty to defend is ripe, and whether Atain’s and Evanston’s claims regarding indemnification are ripe.

The facts before the Court demonstrate the existence of a controversy which warrants the issuance of declaratory judgment. Both Sanchez and the Estate have affirmatively sought coverage for losses, and Atain and Evanston have denied that any coverage is due. See [Estate] Answer and Affirm. Defenses Pl.’s Fourth Am. Compl. & Counterclaim at 20, Sept. 27, 2022, ECF No. 80 (requesting a declaration that “the Loss is covered under the Policy”); T. Disney Answer Ex. 5, Sept. 27, 2022, ECF No. 79-5 (letter denial of coverage request for Sanchez lawsuit); Atain Mot. at 24-25; Evanston Mot. at 2-5. Similarly, the Estate has asserted losses against Evanston by counterclaim and argued that Evanston [*15]  is obligated to defend T. Disney. See [Estate] Answer and Affirm. Defenses [Evanston’s] Am. Interv. Compl. at 27, Oct. 26, 2022, ECF No. 88. Both Sanchez and the Estate have commenced actions against T. Disney, see Compl. Ex. B; Compl. Ex. C, which in turn has argued that Atain and Evanston must both defend and indemnify it for any losses resulting from the lawsuits, see T. Disney Mot. at 25. These facts show the existence of a real, substantial controversy between the parties which is ripe for resolution. See Maryland Cas. Co., 312 U.S. at 273, see, also e.g., Titleworks of Sw. Fla., 2015 U.S. Dist. LEXIS 126780, 2015 WL 5599175 at *9-*10 (finding that the existence of multiple contingencies did not undermine the “practical likelihood” that the insured would seek recovery from the insurer). Here, there have already been demands on the insurer to defend and indemnify. See T. Disney Mot. at 23; see also [Estate] Answer and Affirm. Defenses Pl.’s Fourth Am. Compl. & Counterclaim at 20, Sept. 27, 2022, ECF No. 80; T. Disney Answer Ex. 5, Sept. 27, 2022, ECF No. 79-5. If there were a duty to defend, it is possible that it would be premature to issue a declaratory judgment as to indemnification, as the uncertainty regarding liability might make the indemnification issue too remote. However, because [*16]  neither the Sanchez’ nor the Estate’s complaint alleges facts “which would trigger a duty to indemnify,” the controversy here is ripe. Northland Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348, 1360 (M.D. Fla. 2001) Thus, this controversy is ripe for resolution through a declaratory judgment.

II. Duty to Defend

The parties dispute whether Atain and Evanston have a duty to defend T. Disney against the Sanchez and Estate lawsuits. Atain argues that it has no duty to defend because the facts in the Estate’s and Sanchez’ complaints clearly show that coverage would be precluded under the auto and employee exclusions. See Atain Mot. at 14-22. T. Disney counters that the Sanchez and Estate complaints, as the governing pleadings, contain insufficient factual content to show that either exclusion applies. See T. Disney Mot. at 15-22. Evanston supports Atain’s arguments. See Evanston Mot. at 2-5. For the following reasons, Atain and Evanston have no duty to defend T. Disney.3

A. Legal Framework for Duty to Defend

An insurer’s duty to defend an insured is distinct from, and broader than, the duty to indemnify. See Allstate Ins. Co. v. RJT Enterprises, Inc., 692 So.2d 142, 144 (Fla. 1997); see also Lime Tree Vill. Cmty. Club Ass’n v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th Cir. 1993). The duty to defend is established when the underlying complaint alleges facts that “fairly and potentially” bring the suit within policy coverage.  [*17] See Jones v. Fla. Ins. Guar. Ass’n, 908 So.2d 435, 442-43 (Fla. 2005). Because the duty to defend is separate from the duty to indemnify, the insurer may be required to defend a suit even though the facts later reveal there is no coverage for the claims. See Trizec Props., Inc. v. Biltmore Constr. Co., Inc., 767 F.2d 810, 812 (11th Cir. 1985). Any doubts regarding the duty to defend must be resolved in favor of the insured. See Lime Tree Vill., 980 F.2d at 1405. Exclusionary clauses are generally interpreted strictly in favor of the insured. See Westmoreland v. Lumbermens Mut. Cas. Co., 704 So. 2d 176, 179 (Fla. 4th Dist. Ct. App. 1997).

Generally, the allegations in the underlying complaint determine whether an insurer has a duty to defend a claim. See Nat’l Union Fire & Ins. Co. v. Lenox Liquors, Inc., 358 So.2d 533, 536 (Fla. 1997). However, courts may consider uncontroverted facts that would not normally be alleged in the underlying complaint, or that the plaintiff would not likely know at the time of filing suit. See Composite Structures Inc. v. Cont’l Ins. Co., 560 F. App’x 861, 865 (11th Cir. 2014). Thus, “[i]f uncontroverted facts on the record place a claim outside of coverage, and the claimant makes no attempt to plead the fact creating coverage or suggest the existence of evidence establishing coverage,” there is no duty to defend. Nationwide Mut. Fire Ins. Co. v. Keen, 658 So. 2d 1101, 1103 (Fla. 4th Dist. Ct. App. 1995).

B. The Auto Exclusion

Atain argues that it has no duty to defend because coverage is precluded under the auto exclusion. See Atain Mot. at 14-19; see also Evanston Mot. at 2-5. T. Disney counters that the Sanchez and Estate complaints contain insufficient factual content to show [*18]  that the auto exclusion applies. See T. Disney Mot. at 19-22. For the following reasons, the auto exclusion applies.

The auto exclusion provides in pertinent part that it extends to “bodily injury” or “property damage” arising out of any aircraft, “auto” or watercraft, whether or not owned, maintained, used, rented, leased, hired, loaned, borrowed or entrusted to others or provided to another by any insured. Compl. Ex. G at 40. The policy defines an “auto” as a “land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment.” Id. at 81. The policy further specifies that the exclusion applies whether or not the “auto” is owned, leased, rented or otherwise provided to the insured. Id. at 40. The operative phrases “arising out of” and “in connection with” are not defined in the policy; however, these phrases encompass a range of scenarios in which injury was related to an auto. See Taurus Holdings, Inc. v. United States Fid. & Guar. Co., 913 So. 2d 528, 533 (Fla. 2005) (“arising out of” in the context of auto coverage requires “some level of causation greater than coincidence”); see also Government Emples. Ins. Co. v. Novak, 453 So. 2d 1116, 1119 (Fla. 1984) (“It is well settled that “arising out of” does not mean “proximately caused by,” but has a much broader meaning. All that [*19]  is required is some nexus between the motor vehicle and the injury”).

In Martinez, for example, a concrete driveway collapsed while the oil was being changed in an insured person’s vehicle. See Martinez v. Citizens Property Insurance Corp., 982 So.2d 57, 58 (Fla. 3d Dist. Ct. App. 2008). The court held that the automobile was a mere “instrumentality” and lacked sufficient causal connection to the injuries to fall within the auto exclusion. See id. at 59. Similarly, in Almayor v. State Farm Fire & Casualty Co., 613 So.2d 526, 527 (Fla. 3d Dist. Ct. App. 1993), a plaintiff was injured in an explosion caused when a lit cigarette ignited gas the plaintiff siphoned out of a car before making repairs. In Almayor, the court held that that auto was a “legally remote source of a component, the gasoline, which was itself harmless until acted upon by the insured’s negligence.” Id.

Here, the facts are distinguishable from both Martinez and Almayor. In Martinez for example, an auto caused the collapse of a driveway; however, any other sufficiently heavy object could have caused the collapse, as the fault was undisputedly with the driveway itself. See Martinez, 982 So.2d at 58. The present circumstances are the reverse. Diaz was struck by a piece of metal being carried by a moving tractortrailer. See Compl. Ex. B ¶ 36; T. Disney Answer ¶ 26; T. Disney Resp. Br. at 6. Sanchez was struck and injured by the tractortrailer itself. See Compl. Ex. A ¶¶ [*20]  21, 23; see also T. Disney Mot. ¶ 5. Sanchez’ and the Estate’s complaints both invoke the operation of a vehicle as the cause of harm. See Compl. Ex. A, ¶ 23 (“At the aforestated time and place, the Defendant, Billy W. Murray, negligently operated and/or maintained the motor vehicle so that it collided with the Plaintiff Ruben Sanchez’s person and vehicle”); see also Compl. Ex. B, ¶ 23 (“a tractortrailer hauling a machinery load was travelling in the opposite direction in the adjacent lane on S.R. 19, and a metal piece from the load hit Carlos L. Diaz Figueras . . .”).

T. Disney argues that “the Underlying Lawsuits involve no ‘auto.'”4 T. Disney Mot. at 21. Specifically with respect to Diaz, T. Disney argues that no auto was involved because it was a metal piece from the trailer’s load that struck him. See T. Disney Compl. at 19-21. However, T. Disney does not allege, and the facts do not suggest that the unspecified “metal piece” from the load which struck Diaz would have caused an injury regardless of the presence of a tractortrailer. See Compl. Ex. B ¶ 36; T. Disney Mot. at 22. Here the interchangeable “instrumentality” was the metal piece, not the auto. Although any doubts regarding [*21]  the duty to defend must be decided in favor of the insured, see Lime Tree Vill., 980 F.2d at 1405, no ambiguity in the auto exclusion raises such a doubt. Therefore, because coverage is precluded on the face of the complaints due to the auto exclusion, Atain and Evanston have no duty to defend T. Disney in either lawsuit.

C. The Employee Exclusion

Atain argues that it has no duty to defend because coverage is precluded under the employee exclusion. See Atain Mot. at 19-23; see also Evanston Mot. at 2-5. T. Disney counters that the Sanchez and Estate complaints contain insufficient factual content to show that the employee exclusion applies. See T. Disney Mot. at 15-19. For the following reasons, the employee exclusion applies.5

The employee exclusion applies to direct relationships, such as T. Disney employees, as well as attenuated relationships, such as “any person providing work or services for any insured.” Compl. Ex. G at 36. The policy states that coverage is excluded for bodily injury to an “employee, subcontractor, employee of any subcontractor, independent contractor, employee of any independent contractor . . . or any person performing work or services for any insured arising out of and in the course of employment [*22]  by or service to any insured.” Compl. Ex. G. at 36. The policy also specifies that the phrase “independent contractors” includes “subcontractors and any employees of a subcontractor.” Id. The language of this employee exclusion is broad, excluding coverage for a spectrum of potential working relationships with T. Disney.

Here, the independent contractor agreements unambiguously establish that Diaz and Sanchez were performing work for T. Disney. See [Atain] Answer to Counterclaim Ex. 1 at 14, Oct. 17, 2022, ECF No. 86-1; see also Compl. Ex. C at 2-3, Sept. 13, 2022, ECF No. 77-3. These agreements are referenced by the allegations in the underlying lawsuits, and T. Disney does not contest their authenticity. See T. Disney Mot. at 15-19; T. Disney Resp. Br. at 3-5. Uncontroverted facts on the record which establish a lack of coverage may be considered, even if such facts are not included in the complaint. See, e.g., Nationwide Mut. Fire Ins. Co. v. Keen, 658 So. 2d 1101, 1103 (Fla. 4th Dist. Ct. App. 1995) (uncontroverted fact that claimant used a 40-hp engine excluded coverage, despite absence of fact in complaint); Acosta, Inc. v. Nat’l Union Fire Ins. Co., 39 So. 3d 565, 574-75 (Fla. Dist. Ct. App. 2010) (duty to defend nullified by result of prior litigation which was not referenced in complaint); Stephens v. Mid-Continent Cas. Co., 915 F. Supp. 2d 1320, 1333-34 (Fla. So. Dist. Ct. 2013) (employee exclusion applied when claimant did not assert employment [*23]  relationship in complaint, but admitted that he had been hired to build on insured premises).

The uncontroverted facts of the accident are similar to the fact pattern in Mid-Continent, in which the court considered suggestive language in the complaint, as well as uncontroverted extrinsic evidence. See Mid-Continent, 915 F. Supp. 2d at 1333. There is no dispute that Diaz and Sanchez were making deliveries in a T. Disney work zone, see Compl. Ex. B ¶ 91-93; ; Compl. Ex. A ¶ 12, 15, 23; T. Disney Answer ¶ 24-25, which by itself establishes that both men were “providing work or services for the insured,” per the policy. Compl. Ex. G at 36. Additionally, as in Keen, the Court may consider extrinsic evidence, such as the independent contractor agreements, which are uncontroverted and preclude coverage. See Keen, 658 So. 2d at 1103.

Sanchez and Diaz stopped their vehicles in the middle lane of S.R. 19 in a work zone operated by T. Disney. See Compl. Ex. B ¶ 64, 85, 92; see also Compl. Ex. A ¶ 12, 15, 23. Diaz then got out of his truck to “coordinate completion of the deliveries at the Construction Project as instructed” with Sanchez and the other driver. Compl. Ex B. ¶ 92-93. T. Disney states that as “members of the public at large,” Diaz and Sanchez [*24]  should be covered under the policy. See T. Disney Mot. at 19. This characterization of Sanchez and Diaz is contradicted by the undisputed facts, which show that Diaz and Sanchez were driving trucks under contract with T. Disney, in a T. Disney work zone, to complete deliveries to a T. Disney construction project. See Compl. Ex. B ¶ 91-93; Compl. Ex. A ¶ 12, 15, 23; T. Disney Answer ¶ 16-18. From these facts, no trier of fact could reasonably conclude that Sanchez and Diaz were “members of the public” who happened to be injured while stopping trucks near a T. Disney worksite. Regardless of the exact contractual nature of their relationship with T. Disney, the facts show that Sanchez and Diaz were “providing work or services for the insured.” Compl. Ex. G at 36.

Additionally, T. Disney conflates the scope of the employee exclusion with the existence of a personal contractual relationship. T. Disney argues that Sanchez and Diaz, individually, were not employees or independent contractors of T. Disney. See T. Disney Mot. at 16-19. Therefore, T. Disney argues, the agreements are merely evidence of an independent contractor relationship, and do not establish without dispute that both men [*25]  were contractors. See T. Disney Resp. at 5; see also [Estate’s] Opp. Pl.’s Mot. Summ. J. at 5, Apr. 24, 2023, ECF No. 137. Concerning the Estate’s lawsuit, for example, T. Disney states that Diaz “in his individual capacity was not an employee, contractor, or independent contractor [of T. Disney].” T. Disney Mot. at 17 (quoting Compl. Ex. B ¶ 51). However, Atain does not allege that Sanchez and Diaz were employees or contractors in their individual capacity. Rather, Atain points to the independent contractor agreements to show that Sanchez and Diaz through their respective companies La Cidra Corp. and Diaz-Trujillo Corp. were providing services to T. Disney when the accident occurred. See Atain Compl. at 19-20. According to the “Independent Contractor Agreement” signed and initialed by Sanchez, the company “La Cidra Trucking Corp.” agreed to supply trucking services to T. Disney as of July 24, 2020. See [Atain] Answer to Counterclaim Ex. 1 at 14, Oct. 17, 2022, ECF No. 86-1. On the agreement, Sanchez gives his title as “La Cidra trucking corp. (president),” and the “driver name” field in the agreement is filled out “Ruben Sanchez.” See id. at 14, 15. T. Disney protests Atain’s characterization [*26]  of Sanchez’ contractor status based on this agreement, but does not dispute the agreement’s authenticity. See T. Disney Resp. Br. at 3-5. Similarly, according to an identical “Independent Contractor Agreement” signed and initialed by Diaz, a company named “Diaz-Trujillo Corp.” began supplying trucking services to T. Disney on July 29, 2019. See Compl. Ex. C at 2-3, Sept. 13, 2022, ECF No. 77-3. Diaz is listed as the company’s “owner” on the agreement, and he is also listed as the driver. See id. Again, T. Disney contests whether this agreement establishes that Diaz was an independent contractor of T. Disney, but does not dispute its authenticity or applicability. See T. Disney Resp. Br. at 3-5. Therefore, considering both the facts alleged in the underlying complaints and the uncontroverted contractor agreements on the record, see T. Disney Resp. Br. at 3-5, the Court concludes that Atain and Evanston have no duty to defend T. Disney because of the employee exclusion.

III. Duty to Indemnify

Atain argues that the “auto exclusion” and “employee exclusion” apply pursuant to the language of the policy, and therefore it has no duty to indemnify T. Disney for the potential costs of the Sanchez [*27]  and Estate lawsuits. See Atain Mot. at 14-22. T. Disney counters that neither exclusion applies, based on the facts of the accident. See T. Disney Mot. at 15-22. Evanston reiterates Atain’s arguments, and See Evanston Mot. at 2-5; [T. Disney’s] Resp. [Evanston’s] Mot. Summ. J., July 5, 2023, ECF No. 163. For the following reasons, the indemnity dispute is ripe and Atain and Evanston have no duty to indemnify T. Disney.

A. The Auto Exclusion

The parties dispute whether the “auto exclusion” applies to damages resulting from the Estate’s or Sanchez’ lawsuit. See Atain Mot. at 15-19; T. Disney Mot. at 19-22. Atain argues that it makes no difference whether Diaz was stuck by the tractortrailer, or part of the load being carried by the tractortrailer, as in either case the accident involved an “auto.” See Atain Mot. at 18. T. Disney argues that because a metal piece sticking out of the tractortrailer, and not the trailer itself, struck Diaz the auto was “a mere instrumentality of the injuries.” See T. Disney Mot. at 22. The plain language of the policy bars coverage for injury in connection with “any auto,” and Diaz’ and Sanchez’ accidents were directly connected with an “auto.”

As previously [*28]  explained, it is well-settled that an insurer’s duty to indemnify is narrower than its duty to defend, and that an insurer need only indemnify its insured for occurrences covered by the policy. See EmbroidMe.com, Inc. v. Travelers Prop. Cas. Co. of Am., 845 F.3d 1099, 1107 (11th Cir. 2017). An insurance policy is a contract, and therefore interpretation of an insurance policy is a question of law. See id. First, the policy must be construed in accordance with its plain language. See Chandler v. Geico Indem. Co., 78 So. 3d 1293, 1300 (Fla. 2011). If the policy language is “susceptible to more than one reasonable interpretation . . . the insurance policy is considered ambiguous.” Id. (quoting Auto-Owners Ins. Co. v. Anderson, 756 So. 2d 29, 34 (Fla. 2000)). Any ambiguous language is construed against the drafter and in favor of the insured. See id. However, ambiguity does not exist solely because an insurance contract is complex and requires analysis to interpret it. See General Star Indem. v. W. Fla. Vill. Inn, 874 So. 2d 26, 30 (Fla. 2d Dist. Ct. App.).

The policy states that “[t]his insurance does not apply to: (2) ‘Bodily injury’ or ‘property damage’ arising out of or in connection with any ‘auto,’ unless as outlined below.” Compl. Ex. G at 40. The policy defines an “auto” as a “land motor vehicle, trailer or semitrailer designed for travel on public roads, including any attached machinery or equipment.” Id. at 81. The phrases “arising out of” and “in connection with” encompass a range [*29]  of scenarios in which injury was related to an auto. See Taurus Holdings, 913 So. 2d at 533 (“arising out of” in the context of auto coverage requires “some level of causation greater than coincidence”); see also Novak, 453 So. 2d at 1119 (“It is well settled that ‘arising out of’ does not mean ‘proximately caused by,’ but has a much broader meaning. All that is required is some nexus between the motor vehicle and the injury”). Here, as previously discussed, it is undisputed that Diaz was struck by a piece of metal being carried by a moving tractortrailer, and Sanchez was struck by the truck itself. See Compl. Ex. B ¶ 21, 23, 36; T. Disney Answer ¶ 26; T. Disney Resp. Br. at 6; T. Disney Mot. ¶ 5. Therefore, according to the plain meaning of the policy terms, Diaz’ and Sanchez’ injuries were occurrences both “arising out of” and “in connection with” the auto carrying the load. See Chandler, 78 So. 3d 1293 at 1300.

B. The Employee Exclusion

The parties dispute whether the employee exclusion applies. See Atain Mot. at 19-22; T. Disney Mot. at 15-19; Evanston Mot. at 2-3. Atain argues that the exclusion applies because both Sanchez and Diaz were independent contractors for T. Disney, as evidenced by their contractor agreements. See Atain Mot. at 19-22. T. Disney argues that [*30]  the pleadings allege no facts showing that Sanchez or Diaz were employees or contractors at the time of the accident. See T. Disney Mot. at 15-19. Because the uncontested facts demonstrate that Sanchez and Diaz were performing work for T. Disney through their respective companies, the employee exclusion applies.

The employee exclusion applies to direct relationships, such as T. Disney employees, as well as attenuated relationships, such as “any person providing work or services for any insured.” Compl. Ex. G at 36. The policy states that coverage is excluded for bodily injury to an “employee, subcontractor, employee of any subcontractor, independent contractor, employee of any independent contractor . . . or any person performing work or services for any insured arising out of and in the course of employment by or service to any insured.” Id. The policy also specifies that the phrase “independent contractors” includes “subcontractors and any employees of a subcontractor.” Id. The language of the employee exclusion is broad, excluding coverage for a spectrum of potential working relationships with T. Disney.

As previously discussed, the undisputed facts, namely that both Sanchez and Diaz [*31]  were coordinating deliveries to a T. Disney jobsite, contradicts T. Disney’s characterization of both men as “members of the public at large.” See T. Disney Mot. at 19. T. Disney argues that there is insufficient evidence to show that Diaz or Sanchez were employees or contractors for T. Disney when the accident occurred. See id. at 16-19. However the events surrounding the accident and the existence of independent contractor agreements show that Diaz and Sanchez were working for T. Disney, as envisioned by the broad language of the employee exclusion. See Compl. Ex. B ¶ 91-93; T. Disney Answer ¶ 24-25; see also Compl. Ex. C at 2-3, Sept. 13, 2022, ECF No. 77-3; [Atain] Answer to Counterclaim Ex. 1 at 14, Oct. 17, 2022, ECF No. 86-1.

IV. Defense Costs

Atain requests that the Court enter an order allowing it to withdraw from T. Disney’s defense and recoup defense costs. See Atain Mot. at 25. T. Disney does not indicate that it opposes this request, in the event that the Court finds no duty to defend. See T. Disney Mot. at 23-24; see also T. Disney Resp. at 19-21. For the following reasons, Atain’s request is granted.

Insurers may recover attorneys’ fees incurred in defending an insured [*32]  when there is no duty to defend, and when the insurer timely issues a reservation of rights letter. See State Farm Mut. Auto. Ins. Co. v. Coker, 505 Fed. Appx. 824, 826 (11th Cir. 2013) (citing Colony Ins. Co. v. G & E Tires & Serv., Inc., 777 So. 2d 1034, 1039 (Fla. 1st Dist. Ct. App. 2000)). Generally, the law of contracts governs, the right to reimbursement such that an insured’s acceptance of an insurer’s offer to defend under reservation entitles the insurer to fees, if reimbursement was a condition of the reservation. See Nationwide Mut. Fire Ins. Co. v. Royall, 588 F. Supp. 2d 1306, 1317 (M.D. Fla. 2008) (collecting cases).

Here, Atain offered to defend T. Disney in the Estate and Sanchez lawsuits under reservation. On March 8, 2021, Atain issued a reservation of rights letter, informing T. Disney that it would defend the Sanchez lawsuit, but that it “expressly reserves the right . . . to recoup any defense costs incurred from Disney should it be determined that there is no coverage for the Lawsuit.” Compl. Ex. D at 3, Sept. 13, 2022, ECF No. 77-4; T. Disney Answer ¶ 30. On August 3, 2022, Atain issued a second reservation of rights letter, informing T. Disney that it would defend the Estate lawsuit, but retained the right to “recoup any costs incurred.” Compl. Ex. F at 3, Sept. 13, 2022, ECF No. 77-6; T. Disney Answer ¶ 32. Because T. Disney accepted Atain’s tenders of defense under reservation, see T. Disney Mot. at 10, 11, it agreed [*33]  to reimburse costs in the event that Atain had no duty to defend. See Royall, 588 F. Supp. 2d at 1317. Additionally, T. Disney has not indicated that it opposes Atain’s request to recoup defense costs. See T. Disney Mot. at 23-24; see also T. Disney Resp. at 19-21. Therefore, Atain’s request is granted, and Atain may withdraw from T. Disney’s defense and recoup its defense costs.

CONCLUSION

For the foregoing reasons, Atain’s motion for summary judgment, see ECF No. 111, and Evanston’s motion for summary judgment, see ECF No. 159, are granted with respect to their individual claims as well as T. Disney’s and the Estate’s counterclaims. See T. Disney Answer at 22-23; see also [Estate] Answer and Affirm. Defenses Pl.’s Fourth Am. Compl. & Counterclaim, Sept. 27, 2022, ECF No. 80; [Estate] Answer and Affirm. Defenses [Evanston’s] Am. Interv. Compl., Oct. 26, 2022, ECF No. 88. T. Disney’s motion for summary judgment on Atain’s complaint, its own counterclaim, and the Estate’s counterclaim, see ECF No. 120, is denied, and T. Disney’s motion to dismiss Evanston’s intervening complaint, see ECF No. 87, is denied as moot. The Court will enter a separate judgment in accordance with Federal Rule of Civil Procedure 58.

/s/ Claire R. Kelly

Claire R. Kelly, Judge [*34] *

Dated: September 15, 2023

New York, New York


End of Document

* Judge Claire R. Kelly, of the United States Court of International Trade, sitting by designation.

1 Also before the Court is T. Disney’s motion to dismiss Evanston’s intervening complaint. See [T. Disney] Mot. Dismiss Am. Interv. Compl., Oct. 26, 2022, ECF No. 87; see also Evanston Am. Interv. Compl. ¶ 56, Oct. 12, 2022, ECF No. 84. T. Disney’s motion to dismiss is denied as moot.

2 T. Disney lists three “disputed facts” in its response to Atain’s motion. See T. Disney Resp. Pl.’s Mot. Summ. J. at 3-6, Apr. 5, 2023, ECF No. 119. However, T. Disney is not disputing the facts, but rather Atain’s characterization of Sanchez and Diaz as “independent contractors,” and Atain’s failure to mention the cause of Diaz’ death. See id. Similarly, Atain lists one “disputed fact,” which protests T. Disney’s conclusion that Atain “owes” it attorney’s fees. See Atain Resp. Def. Mot. Summ. J. at 3, Apr. 25, 2023, ECF No. 139. Because neither response identifies a material fact which is contested, summary judgment is appropriate. See Wright & Miller, Fed. Prac. & Proc. Civ. § 2725.1, 2725.2 (4th ed.).

3 As an excess insurer, Evanston has no duty to defend or indemnify T. Disney unless the limits of the Atain policy have been reached, and the Court determines that Atain also has a duty to defend or indemnify. See Evanston’s Am. Interv. Compl. for Declaratory J. at ¶¶ 56-58, Oct. 12, 2022, ECF No. 84. The Court determines that Atain has no duty to defend or indemnify. For these reasons, Evanston also has no duty to defend or indemnify.

4 T. Disney also briefly argues that the exclusion does not apply because there was no auto “owned or controlled” by T. Disney involved in the accident. T. Disney Mot. at 22. However, the policy does not specify that T. Disney must own or control the involved auto for the exclusion to apply. To the contrary, the policy specifies that the auto exclusion applies to any auto “whether or not owned, maintained, used, rented, leased, hired, loaned, borrowed or entrusted to others.” Compl. Ex. G at 40. Therefore, it is irrelevant that the tractortrailer was not owned by T. Disney for the purposes of the exclusion.

5 If the Court concludes that Atain has no duty to defend under the auto exclusion, Atain argues that the Court need not address T. Disney’s alternate argument on insufficiency of support for the employee exclusion. See Atain Mot. at 19. The Court nevertheless addresses this argument for completeness.

* Judge Claire R. Kelly, of the United States Court of International Trade, sitting by designation.

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

United States District Court for the Middle District of Florida, Fort Myers Division

August 24, 2023, Decided; August 24, 2023, Filed

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

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

Prior History: Travelers Prop. Cas. Co. of Am. v. H.E. Sutton Forwarding Co., 620 F. Supp. 3d 1165, 2022 U.S. Dist. LEXIS 140768, 2022 WL 3155402 (M.D. Fla., Aug. 8, 2022)

Counsel:  [*1] For Travelers Property Casualty Company of America, Plaintiff: Matthew J. Lavisky, LEAD ATTORNEY, Butler Weihmuller Katz Craig LLP, Tampa, FL; Latasha Lordes Chanell Scott, Butler Weihmuller Katz Craig, Tampa, FL.

For H.E. Sutton Forwarding Co., LLC, doing business as Tex Sutton Equine Air Transportation, Defendant: Robert W. Boos, LEAD ATTORNEY, Adams and Reese LLP, Tampa, FL; Donald A. Mihokovich, Adams and Reese, Tampa, FL.

Judges: JOHN E. STEELE, SENIOR UNITED STATES DISTRICT JUDGE.

Opinion by: JOHN E. STEELE

Opinion


OPINION AND ORDER

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, [*2]  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, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (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, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (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, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). “When a moving party has discharged its burden, the non-moving party must then ‘go beyond [*3]  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, 127 S. Ct. 1769, 167 L. Ed. 2d 686 (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 law1 , 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 F. App’x 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 [*4]  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 facts2 :

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 [*5]  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. 11-13.)

. . .

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 [*6]  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 [*7]  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. [*8] )

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 Tex Sutton’s illusory coverage argument, and that the Aircraft Liability Exclusion does not “completely contradict” the insuring provision of the Excess Policy such that it would render the policy illusory. (Id., pp. 5-7.) In the alternative, Travelers requested leave to file a second motion for summary judgment to address the illusory coverage argument raised by Tex Sutton. (Id., p. 10.) The Court denied Travelers’ motion for reconsideration (Doc. #43, p. 11), but in the interest of judicial economy, granted its request for leave to file a second motion for summary judgment.

Petitioner moves a second time for summary judgment arguing that it is entitled to a declaration that it owes no duty to defend or indemnify Tex Sutton under Coverage A of the Excess Policy because the “Aircraft Liability Exclusion” does not render coverage “illusory.” (Doc. #44, pp. 2-3.) [*9]  Respondent Tex Sutton argues that Travelers has failed to carry its summary judgment burden of showing there are no genuine issues of fact which may be resolved as a matter of law regarding whether the coverage at issue is illusory. (Doc. #47, p. 1.)


III.

As noted above, Travelers’ Excess Policy includes two separate coverage parts, Coverage A — Excess Follow-Form Liability and Coverage B3 – Umbrella Liability.

Coverage A of the Travelers Excess Policy provides:

SECTION I – COVERAGES

A. COVERAGE A – EXCESS FOLLOW-FORM LIABILITY

1. We will pay on behalf of the insured those sums, in excess of the “applicable underlying limit”, that the insured becomes legally obligated to pay as damages to which Coverage A of this insurance applies, provided that the “underlying insurance” would apply to such damages but for the exhaustion of its applicable limits of insurance. If a sublimit is specified in any “underlying insurance”, Coverage A of this insurance applies to damages that are in excess of that sublimit only if such sublimit is shown for that “underlying insurance” in the Schedule Of Underlying Insurance.

2. Coverage A of this insurance is subject to the same terms, conditions, agreements, exclusions [*10]  and definitions as the “underlying insurance”, except with respect to any provisions to the contrary contained in this insurance [emphasis added].

(Doc. #24-2, p. 11.)

Coverage A is subject to the Aircraft Liability Exclusion:

With respect to COVERAGE A — EXCESS FOLLOW-FORM LIABILITY, the following exclusion is added to SECTION IV-EXCLUSIONS:

Aircraft

Damages arising out of the ownership, maintenance, use or entrustment to others of any aircraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading”.

This exclusion applies even if the claims against any insured allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that insured, if the “occurrence” which caused the “bodily injury” or “property damage” involved the ownership, maintenance, use or entrustment to others of any aircraft that is owned or operated by or rented or loaned to any insured.

(Id., p. 42.)

The Underlying (Chubb) Policy that was issued by Federal Insurance Company to Clark and endorses Tex Sutton, as a named insured, provides general liability coverage as follows:

COVERAGES

Bodily Injury and Property Damage Liability [*11]  Coverage

Subject to all of the terms and conditions of this insurance, we will pay damages that the insured becomes legally obligated to pay by reason of liability:

• imposed by law; or

• assumed in an insured contract;

for bodily injury 4 or property damage 5 caused by an occurrence 6 to which this coverage applies.

This coverage applies only to such bodily injury or property damage that occurs during the policy period.

. . .

Advertising Injury and Personal Injury Liability Coverage

Subject to all terms and conditions of this insurance, we will pay damages that the insured becomes legally obligated to pay by reason of liability:

• imposed by law; or

• assumed in an insured contract;

for advertising injury 7 or personal injury to which this coverage applies.

This coverage applies only to such advertising injury or personal injury 8 caused by an offense that is first committed during the policy period.

. . .

(Doc. #44-2, p. 34)(emphasis in original)(footnotes added.)

The Underlying Policy also contains the following exclusions:

BODILY INJURY/PROPERTY DAMAGE EXCLUSIONS 9

Aircraft, Autos Or Watercraft

This insurance does not apply to bodily injury or property damage arising out of the ownership, maintenance, use (use includes operation and loading and unloading) or entrustment to other of any:

• aircraft;

. . .

owned or operated by or loaned or rented to any insured.

(Id., pp. 91-92)(emphasis in original.)


IV.


A. Duty to Defend Principles

Since Travelers’ “duty to defend [under Florida law] is separate and distinct from its duty to indemnify, and it is more extensive” the Court begins its analysis [*13]  here. Advanced Sys., Inc. v. Gotham Ins. Co., 272 So. 3d 523, 526-27 (Fla. 3d DCA 2019) (citation omitted). As the Eleventh Circuit has recently summarized:

Under Florida law, “an insurer’s duty to defend its insured against a legal action arises when the complaint alleges facts that fairly and potentially bring the suit within policy coverage.” Jones v. Fla. Ins. Guar. Ass’n, 908 So. 2d 435, 442-43 (Fla. 2005). The duty to defend is a broad one, broader than the duty to indemnify, and “[t]he merits of the underlying suit are irrelevant.” Mid-Continent Cas. Co. v. Royal Crane, LLC, 169 So. 3d 174, 181 (Fla. 4th DCA 2015). We determine whether an insurer has a duty to defend its insured based only on “the eight corners of the complaint and the policy,” id. at 182, and only as the complaint’s alleged facts are “fairly read,” Fun Spree Vacations, Inc., 659 So. 2d at 421. The “facts” we consider in evaluating the duty to defend come solely from the complaint, regardless of the actual facts of the case and regardless of any later developed and contradictory factual record. Jones, 908 So. 2d at 442-43. “Any doubts regarding the duty to defend must be resolved in favor of the insured,” id. at 443, and “where a complaint alleges facts that are partially within and partially outside the coverage of an insured’s policy, the insurer is not only obligated to defend, but must defend that entire suit,” Sunshine Birds & Supplies, Inc. v. U.S. Fid. & Guar. Co., 696 So. 2d 907, 910 (Fla. 3d DCA 1997). But of course, because the lawsuit must be for something covered by the insurance policy, “the insurer has no [*14]  duty to defend” when “the pleadings show the applicability of a policy exclusion.” State Farm Fire & Cas. Co. v. Tippett, 864 So. 2d 31, 35 (Fla. 4th DCA 2003).

Travelers Indem. Co. of Conn. v. Richard Mckenzie & Sons, Inc., 10 F.4th 1255, 1261 (11th Cir. 2021). See also Westchester Gen. Hosp., Inc., 48 F.4th at 1302 (citing Keen v. Fla. Sheriffs’ Self-Ins. Fund, 962 So. 2d 1021, 1024 (4th Fla. DCA 2007)(“However, an insurer does not need to defend an insured if a policy exclusion applies.”)).


B. Illusory Coverage Principles

An insurance policy can, without creating a conflict or ambiguity, both provide coverage and exclude some things that might otherwise fall within that coverage. Cynergy, LLC v. First Am. Title Ins. Co., 706 F.3d 1321, 1327 (11th Cir. 2013). On the other hand, an insurance policy’s coverage becomes illusory if it “grants coverage with one hand and then with the other completely takes away the entirety of that same coverage. Completeness is key. When limitations or exclusions completely contradict the insuring provisions, insurance coverage becomes illusory.” Richard Mckenzie & Sons, Inc., 10 F.4th at 1265-66 (citing Warwick Corp. v. Turetsky, 227 So. 3d 621, 625 (Fla. 4th DCA 2017)(internal quotations omitted)(emphasis in original)). Put another way, a policy is illusory: (1) “only if a policy exclusion ‘swallow[s] up’ an insuring provision”, or (2) when an exclusion “eliminates all——or at least virtually all——coverage in a policy.” Zucker v. U.S. Specialty Ins. Co., 856 F.3d 1343, 1352 (11th Cir. 2017); Posada v. Aspen Specialty Ins. Co., No. 8:22-cv-1578-CEH-AAS, 2023 WL 2711538, 2023 U.S. Dist. LEXIS 55419, at *49 (M.D. Fla. Mar. 30, 2023).

If the policy is found to be illusory or ambiguous, it is resolved “by ignoring the exclusion.” Zucker, 856 F.3d at 1352 (citing Tire Kingdom, Inc. v. First S. Ins. Co., 573 So. 2d 885, 887 (Fla. 3d DCA 1990)). “But if the policy’s coverage and exclusion provisions do not negate one another, the coverage is not illusory, [*15]  and there is no ambiguity, so the plain language of the exclusion controls.” See Richard Mckenzie & Sons, Inc., 10 F.4th at 1265 (citing Warwick Corp., 227 So. 3d at 625-26).

In its Opinion and Order on Petitioner’s first motion for summary judgment, the Court found that Tex Sutton qualified as a covered insured under Coverage A of the Excess Policy, and that the Aircraft Liability Exclusion applies to the Underlying Action (Doc. #31, pp. 9-11). Tex Sutton does not dispute that the Aircraft Liability Exclusion applies. Instead, it claims that this Exclusion is so broad that it renders coverage illusory because Tex Sutton’s entire business involves one thing — the use of an aircraft for the transportation of horses. Therefore, the sole remaining issue before the Court is whether the coverage provided by the Underlying Policy and Coverage A of the Excess Policy is rendered “illusory” by the Aircraft Liability Exclusion, thus invoking Travelers’ duty to defend or duty to indemnify.


V.

Travelers argues that while the Aircraft Liability Exclusion applies in this case, the Exclusion does not render the Excess Policy’s coverage illusory because it does not “swallow up” an insuring provision nor does it “eliminate[] all——or at least virtually all——coverage in a policy”; rather, [*16]  the Excess Policy (Coverage A) and the Underlying Policy provide potential coverage for a variety of damages outside the scope of the Exclusion. (Doc. #44, p. 2; Doc. #51, p. 3.) Plaintiff argues that under either type of illusory coverage, Travelers’ motion for summary judgment fails. The Court will address the parties’ arguments in turn below.


A. Whether The Aircraft Liability Exclusion “Swallows Up” An Insuring Provision

Travelers argues that application of the Excess Policy’s Aircraft Liability Exclusion to the Underlying Policy does not completely “swallow up” coverage because there is a myriad of other claims within the broad insuring grant “for bodily injury or property damage” that do not arise out of the “ownership, maintenance or use” of an aircraft. (Doc. #51, p. 2.) Tex Sutton, on the other hand, argues that the Aircraft Liability Exclusion’s language – “damages arising out of the ownership, maintenance, use or entrustment to others of any aircraft” – is so broad that it “swallows up” the entire bodily injury coverage provision and renders coverage illusory. (Doc. #47, pp. 12-13.) Tex Sutton’s argument is based on its theory that since it is in the business of transporting [*17]  horses via aircraft, any claim for bodily injury would necessarily “aris[e] out of” the use of aircraft, and thus be barred under the Exclusion.

Tex Sutton’s argument fails, though, because the Aircraft Liability Exclusion does not “swallow up” coverage. To render coverage illusory, the exclusion must “completely contradict the insuring provisions.” Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 966 (11th Cir. 2014). If an exclusion does not “completely swallow” the insuring provision, the policy is not illusory, even if it is a significant exclusion. Warwick Corp.,227 So. 3d at 625.

While the Aircraft Liability Exclusion may exclude “damages arising out of the ownership, maintenance, use or entrustment to others of any aircraft . . . rented . . . to any insured” (including “loading and unloading”) for coverage provided by the Underlying Policy for damages because of “bodily injury” and “property damage” caused by an “occurrence” (i.e., an accident), it does not swallow every claim under the insuring provision. For example, as Travelers notes, the Policy covers — and the Aircraft Liability Exclusion does not negate coverage — for bodily injuries such as slips and falls at Tex Sutton’s leased premises10 , or property damage due to Tex Sutton’s negligent maintenance of its leased premises. [*18]  (Doc. #44, pp. 12-13; Doc. #51, p. 4.) See, e.g., AIX Specialty Ins. Co., 793 F. App’x at 1004 (a liquor liability exclusion in a general liability policy issued to a night club was a “significant exclusion” given the night club’s business, but did not swallow up coverage); Goldberg v. Nat’l Union Fire Ins. Co., 143 F. Supp. 3d 1283, 1301-02 (S.D. Fla. 2015)(a professional services exclusion in a policy issued to a company offering banking services was not illusory because it provided coverage for claims not involving professional services); Md. Cas. Co. v. Smartcop, Inc., No. 4:11-cv-10100-KMM, 2012 U.S. Dist. LEXIS 141757, at *20 (S.D. Fla. September 21, 2012)(a computer software exclusion in a policy issued to a company whose primary responsibilities relate to providing computer software to its customers was not illusory). “[A]n insurance policy can both provide coverage and also exclude some things that might otherwise fall within that coverage. That’s not a conflict. It’s just an exclusion, and those are par for the insurance course.” Richard McKenzie & Sons, Inc., 10 F.4th at 1265. Thus, even though the Aircraft Liability Exclusion may take “a nibble, or even a big bite, out of [coverage],” it does not swallow Tex Sutton’s coverage whole. Id. at 1266.


B. Whether The Aircraft Liability Exclusion “Eliminates All— —Or At Least Virtually All——Coverage In A Policy”

The parties also disagree as to whether this case falls under the common law “illusory coverage” doctrine that the Eleventh [*19]  Circuit has indicated is part of Florida’s insurance law. Interline Brands, Inc. v. Chartis Specialty Ins. Co., 749 F.3d 962, 966-67 (11th Cir. 2014) (applying Florida law). “In order for an exclusion to render a policy’s coverage illusory it must eliminate all—or at least virtually all—coverage in a policy.” Zucker, 856 F.3d at 1352, citing Inerline Brands, Inc., 749 F.3d at 966-67) (“According to Interline, the Exclusion’s broad scope reduces the coverage Chartis sold to Interline to a ‘façade’ . . . . Interline overstates the extent to which the Exclusion limits coverage. Even with the broad Exclusion, the policy still contains extensive coverage.”); Great Am. E & S Ins. Co. v. End Zone Pub & Grill of Narragansett, Inc., 45 A.3d 571, 576 (R.I. 2012) (“We will deem an exclusion to an insurance policy illusory only when it would preclude coverage in almost any circumstance.”) (quotation marks omitted); McGregor v. Allamerica Ins. Co., 449 Mass. 400, 868 N.E.2d 1225, 1228 (Mass. 2007) (“As long as an insurance policy provides coverage for some acts, it is not illusory simply because it contains a broad exclusion.”); Point of Rocks Ranch, LLC v. Sun Valley Title Ins. Co., 143 Idaho 411, 146 P.3d 677, 680 (Idaho 2006) (“An insurance policy’s coverage is illusory if it appears that if any actual coverage does exist it is extremely minimal and affords no realistic protection to any group or class of injured persons.”) (quotation marks omitted)).

The Aircraft Liability Exclusion negates a lot of coverage, but not “all—or at least virtually all—coverage.” As set forth above, the Underlying Policy provides for damages resulting [*20]  from bodily injury, property damage, advertising injury, and personal injury. Tex Sutton not only operates a business, but also occupies leased premises at the Blue Grass Airport. The Aircraft Liability Exclusion would not necessarily exclude claims based on premises liability, bodily injury or property damage sustained at Tex Sutton’s offices, or injury resulting from trademark or tradename infringement, or defamation. Accordingly, the Travelers Policy is not illusory under Florida law. See Interline Brands, 749 F.3d at 967 (exclusion was not void for being against public policy where “[e]ven with the broad [e]xclusion, the policy still contains extensive coverage”).

Accordingly, the Aircraft Liability Exclusion does not render the coverage under the Excess Policy illusory, and Travelers is entitled to summary judgment as to the same.


VI.

In its Complaint for Declaratory Judgment, Travelers sought judgment declaring its obligations to Tex Sutton under the Excess Policy, specifically its obligation to defend Tex Sutton in the Underlying Action and its obligation to indemnify Tex Sutton against loss for the damages sustained by Mr. Zepeda on March 12, 2020. For the reasons discussed below, the Court finds Travelers does [*21]  not have a duty to defend or to indemnify Tex Sutton in the Underlying Action.


A. Travelers’ Duty to Defend Tex Sutton In the Underlying Action

Since the Aircraft Liability Exclusion does not render the coverage provided by the Excess Policy illusory as a matter of Florida law, “the plain language of the [E]xclusion controls”, Richard Mckenzie & Sons, Inc., 10 F.4th at 1265 (citing Warwick Corp., 227 So. 3d at 625-26), and is applicable to the Underlying Action. Travelers thus has no duty to defend Tex Sutton in the Underlying Action. See Richard Mckenzie & Sons, Inc., 10 F.4th at 1261 (citing Tippett, 864 So. 2d at 35) (The lawsuit must be for something covered by the insurance policy, “the insurer has no duty to defend” when “the pleadings show the applicability of a policy exclusion.”)).


B. Travelers’ Duty To Indemnify Tex Sutton Against Loss For The Damages Sustained By Mr. Zepeda

“[T]he duty to defend is broad and based on the allegations in the complaint, the duty to indemnify is determined by the facts adduced at trial or during discovery.” Pa. Lumbermens Mut. Ins. Co. v. Ind. Lumbermens Mut. Ins. Co., 43 So. 3d 182, 188 (Fla. 4th DCA 2010). See also Pub. Risk Mgmt. of Fla. v. Munich Reinsurance Am., Inc., 38 F.4th 1298, 1306 (11th Cir. 2022). Therefore, unlike the duty to defend, the trial court must look beyond the allegations in the underlying complaint to decide whether an insurer has a duty to indemnify. The duty to indemnify arguably may not become fully ripened until the merits of the underlying litigation are resolved. [*22]  Aetna Ins. Co. v. Borrell-Bigby Elec. Co., 541 So.2d 139, 141 (Fla. 2d DCA 1989).

Courts in this circuit have overwhelmingly held that the question of an insurer’s duty to indemnify is not ripe until the underlying lawsuit is resolved, or the insured’s liability is established, because unless and until that occurs there is no judgment to indemnify. See, e.g., Nat’l Union Fire Ins. Co. of Pittsburgh, Pa. v. Shaw Dev., LLC, 2:21-cv-658-SPC-NPM, 2021 U.S. Dist. LEXIS 202973, 2021 WL 4913357, *1 (M.D. Fla. Oct. 21, 2021) (duty to indemnify claim is unripe until state court case ends); Cont’l Ins. Co. v. Nationwide Ins. Co. of Am., 6:20-cv-1439-WWB-DCI, 2021 U.S. Dist. LEXIS 259064, 2021 WL 8894460, *5 (M.D. Fla. Sept. 28, 2021) (entering a summary judgment finding that there is a duty to defend, and dismissing duty to indemnify claim without prejudice as premature until underlying litigation is resolved); AIX Specialty Ins. Co. v. Everett, 543 F. Supp. 3d 1321, 1333 (M.D. Fla. 2021) (declaratory judgment proceeding on duty to indemnify is premature until resolution of underlying litigation).

However, an exception to the prematurity of the indemnity issue arises when “the court can determine that the allegations in the complaint could under no circumstances lead to a result which would trigger the duty to indemnify.” Northland Cas. Co. v. HBE Corp., 160 F. Supp. 2d 1348, 1360 (M.D. Fla. 2001) (emphasis added). See Amerisure Ins. Co. v. Walker, 11-61480-CV, 2011 U.S. Dist. LEXIS 132959, 2011 WL 5597325, *3 (S.D. Fla. Nov. 17, 2011) (no duty to defend or indemnify where the injured party stated in underlying complaint that he was an employee, triggering employer’s liability exclusion); see also Scottsdale Ins. Co. v. GFM Operations, Inc., 789 F. Supp. 2d 1278, 1288-89 (S.D. Fla. 2011) (finding no duty to indemnify because employer’s liability exclusion applied where there was no evidence in the record that injured party, who [*23]  was operating a forklift, was on the premises as a patron rather than as an employee).

Here, the parties do not dispute the facts giving rise to the Underlying Action, namely, that Mr. Zepeda was injured while operating a tractor trailer to pick up horses and equipment unloaded from an aircraft chartered by Tex Sutton, when his truck collided with the aircraft’s wing. As this Court has found, the Aircraft Liability Exclusion applies to the Underlying Action and based upon the undisputed allegations in the underlying complaint there are “no circumstances” that “trigger [Travelers’] duty to indemnify.” Northland Cas. Co., 160 F. Supp. 2d at 1360.

Accordingly, it is now

ORDERED:

1. Petitioner Travelers Property Casualty Company of America’s Second Motion for Final Summary Judgment (Doc. #44) is GRANTED.

2. Petitioner has no duty to defend Respondent H.E. Sutton Forwarding Co., LLC, D/B/A Tex Sutton Equine Air Transportation in the underlying 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.

3. Petitioner has not duty to indemnify Respondent for the damages sustained by Mr. Zepeda on March 12, 2020.

4. The Clerk of the Court shall [*24]  enter judgment in favor of Petitioner, terminate any pending deadlines, and close the file.

DONE and ORDERED at Fort Myers, Florida, this 24th day of August, 2023.

/s/ John E. Steele

JOHN E. STEELE

SENIOR UNITED STATES DISTRICT JUDGE


End of Document

1 This is a diversity action and the parties do not dispute that the challenged contract was issued and delivered in Florida, so Florida law controls. Westchester Gen. Hosp., Inc. v. Evanston Ins. Co., 48 F.4th 1298, 1302 (11th Cir. 2022); Tech. Coating Applicators, Inc. v. U.S. Fid. & Guar. Co., 157 F.3d 843, 844 (11th Cir. 1998). See also State Farm Mut. Auto. Ins. Co. v. Roach, 945 So. 2d 1160, 1163 (Fla. 2006).

2 The background facts which were set forth in the Opinion and Order on Petitioner’s first motion for summary judgment are either undisputed or read in the light most favorable to Respondent as the nonmoving party.

3 In its previous Opinion and Order on Travelers’ first motion for summary judgment, the Court found Tex Sutton failed to address Travelers’ argument that Coverage B did not apply to Tex Sutton because Tex Sutton was not listed as a “Named Insured” for purposes of Coverage B, and in doing so, waived any argument to the contrary. (Doc. #31, p. 5 n. 2.) While Travelers reiterates the same argument as to Coverage B in its second motion for summary judgment, Tex Sutton again offers no countervailing argument. Thus, the Court omits any discussion of Coverage B.

4 “Bodily Injury” is defined as physical “injury; sickness; or disease; sustained by a person, including death, humiliation, mental anguish, mental injury, sickness or disease that caused it.” (Doc. #44-2, p. 56.)

5 “Property Damage” means “physical injury to tangible property, including the resulting loss of use of that property . . . or “loss of use of tangible property that is not physically injured.” (Doc. #44-2, pp. 61-62.)

6 “Occurrence” is defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” (Doc. #44-2, p. 60.)

7 “Advertising Injury” means “injury, other than bodily injury, property damage, or personal injury, sustained by a person or organization and caused by an offense of infringing, in that particular part of your advertisement about your goods, products or services, upon their: copyrighted advertisement; or registered collective mark, registered service mark or other registered trademarked name, slogan, symbol or title.” (Doc. #44-2, p. 56)(emphasis in original.)

8 “Personal Injury” means injury, other than bodily injury, property, damage, or advertising injury, caused by an offense of:

A. false arrest, false detention or other false imprisonment;

B. malicious prosecution;

C. wrongful entry into, [*12]  wrongful eviction of a person from or other violation of a person’s right of private occupancy of a dwelling, premises or room that such person occupies, if committed by or on behalf of its landlord, lessor or owner;

D. electronic, oral, written or other publication of material that:

1. libels or slanders a person or organization (which does not include disparagement of goods, products, property or services); or

2. violates a person’s right of privacy; or

E. discrimination, harassment or segregation based on a person’s age, color, national origin, race, religion or sex.

(Doc. #44-2, pp. 60-61)(emphasis in original.)

9 As amended by the “Exclusion — Non-Owned Aircraft” endorsement. (Doc. #44-2, pp. 91-92.)

10 The complaint in the Underlying Action alleges that Tex Sutton maintains a facility at Blue Grass Airport, which it leases from the Lexington-Fayette Urban County Airport Board. (Doc. #1-2, ¶ 10.)

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