THIS CAUSE comes before the Court upon Defendant's Motion for Summary Judgment (Dkt. 85), Plaintiff's Motion for Summary Judgment (Dkt. 97), and the respective responses thereto (Dkts. 112 and 109). Upon reviewing the motions and responses, and being otherwise advised in the premises, the Court concludes that Defendant's Motion for Summary Judgment should be granted, and that Plaintiff's Motion for Summary Judgment should be denied, as stated herein.
Plaintiff originally brought this insurance law action for: (1) declaratory judgment; (2) breach of contract; and (3) common law bad faith. The declaratory judgment cause of action has since been dismissed (see Dkt. 12).The bad faith claim has been abated until the determination of the breach of contract claim, the validity of which is the subject of the parties' instant motions for summary judgment.
The breach of contract action now pending before the Court stems from a workplace accident that killed Santana Morales in 1997. Specifically, Morales, working as a landscaper for Lawns Nursery & Irrigation Designs, Inc. ("Lawns"), was crushed to death by a palm tree that was unloaded from a flatbed trailer.
After the accident, Morales' Estate started receivingworkers' compensation benefits from Zenith Insurance Company ("Zenith"), Lawns' workers' compensation insurance carrier. On December 3, 1999, the Estate filed a wrongful death action against Lawns and LNI Designs, Inc. ("LNI")*fn1 in Hillsborough County Circuit Court. The Estate claimed that Lawn and LNI'snegligence resulted in Morales' death. Zenith, under an express reservation of rights, retained attorney J. Gregory Giannuzzi to represent Lawns in the wrongful death action.
According to Zenith, Giannuzzi was unable to effectively communicate with Lawns which made it difficult to defend the suit and to respond to discovery requests. Finding that he was unable to adequately represent his client, Giannuzzi made a motion to withdraw from the underlying state court action, which was granted. The motion stated that Zenith "pulled coverage and a defense" under the Policy based on Lawns' lack of cooperation.
While the wrongful death suit was still ongoing, Zenith continued to pay workers' compensation benefits each month to the Estate until August 21, 2003, when Zenith payed a final lump sum payment in full settlement of the claim. In all, the Estate was paid over $100,000 in benefits. In the settlement, Mrs. Morales signed a general release, releasing Zenith and Lawns from liability, and expressly electing workers' compensation benefits as the Estate's sole remedy. Nonetheless, the Estate continued to prosecute the wrongful death action in Circuit Court (it appears that the Circuit Court was not advised of Mrs. Morales' settlement of the workers' compensation claim and/or her express election of remedies).
As the wrongful death case proceeded, Lawns and LNI, now unrepresented by counsel, failed to litigate the case. After the Estate filed a motion for sanctions against Lawns and LNI based upon their failure to respond to discovery requests and comply with Court orders, the Court, as a sanction, struckthe Defendants' pleadings. With liability uncontested, the case proceeded to a one day jury trial on the issue of damages. After the jury returned a $9.525 million verdict for the Estate, the Estate sought to collect that judgment from Zenith by filing the instant action. Plaintiff alleges that Zenith breached its insurance contract with Lawns by refusing to pay for the underlying tort judgment.
Zenith claims, among other things, that the Estate's claim is excluded by a workers' compensation policy exclusion, that the Estate lacks standing to bring a breach of contract claim, and that other defenses bar coverage. Alternatively, Zenith argues that, even if it is liable, a $100,000 policy cap functions to limit its exposure.
Plaintiff argues that these various policy exclusions and defenses either do not apply, or are waived. Notably, Plaintiff argues that Zenith cannot now assert any "coverage defense" to disclaim liability as Zenith allegedly failed to properly comply with the Florida Claims Administration Statute ("CAS"). In addition, Plaintiff contends that, since Zenith failed to defend the Estate on the merits in the underlying state court action, any defenses it might now seek to assert are waived. As a result, Plaintiff contends that Zenith is liable for the full judgment amount.
Summary Judgment Standard
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 (1986). The existence of some factual disputes between the litigants will not defeat an otherwise properly supported summary judgment motion; "the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (emphasis in original). The substantive law applicable to the claimed causes of action will identify which facts are material. Id. Throughout this analysis, the court must examine the evidence in the light most favorable to the non-movant and draw all justifiable inferences in its favor. Id. at 255.
Once a party properly makes a summary judgment motion by demonstrating the absence of a genuine issue of material fact, whether or not accompanied by affidavits, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories and admissions on file, and designate specific facts showing that there is a genuine issue for trial. Celotex, 477 U.S. at 324. The evidence must be significantly probative to support the claims. Anderson, 477 U.S. at 248-49 (1986).
This Court may not decide a genuine factual dispute at the summary judgment stage. Fernandez v. Bankers Nat'l Life Ins. Co., 906 F.2d 559, 564 (11th Cir. 1990). "[I]f factual issues are present, the Court must deny the motion and proceed to trial." Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir. 1983). A dispute about a material fact is genuine and summary judgment is inappropriate if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson, 477 U.S. at 248; Hoffman v. Allied Corp., 912 F.2d 1379 (11th Cir. 1990). However, ...