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Mt. Hawley Insurance Co. v. The Miami River Port Terminal, LLC

United States District Court, S.D. Florida

January 6, 2017

MT. HAWLEY INSURANCE COMPANY, Plaintiff,
v.
MIAMI RIVER PORT TERMINAL, LLC; WILSON AUGUSTAVE; and DESELYN JOSEPH, Defendants. and THE NORTH RIVER INSURANCE COMPANY, Plaintiff-Intervenor, MIAMI RIVER PORT TERMINAL, LLC, Counter-plaintiff,
v.
MT. HAWLEY INSURANCE COMPANY, Counter-defendant.

          ORDER

          DARRIN P. GAYLES UNITED STATES DISTRICT JUDGE

         THIS CAUSE comes before the Court on the following motions:

(1) Plaintiff/Counter-defendant Mt. Hawley Insurance Company's (“Mt. Hawley”) Motion for Summary Judgment [ECF No. 37];[1]
(2) Plaintiff-Intervenor North River Insurance Company's (“North River”) Motion for Summary Judgment [ECF No. 62];
(3) Defendant/Counter-plaintiff Miami River Port Terminal, LLC's (“MRPT”) Motion for Summary Judgment [ECF No. 95];[2]
(4) Mt. Hawley's Motion for Summary Judgment on MRPT's Counterclaims [ECF No. 97]; and
(5) MRPT's Motion for Continuance or Stay [ECF No. 76].

         The Court has carefully considered the parties' submissions, the record in this case, and the applicable law and is otherwise fully advised in the premises.

         Mt. Hawley, an insurance company, filed this coverage dispute seeking a declaration that it has no duty to defend and no duty to indemnify MRPT in a negligence action in state court brought by Defendant Wilson Augustave, who suffered injuries while working on property owned by MRPT. North River, as an excess liability insurer, intervened. In its counterclaim against Mt. Hawley, MRPT alleges that Mt. Hawley breached its contract by failing to immediately defend it in that state court suit and requests that this Court reform the insurance policy that is the subject of this case. For the reasons that follow, the Court finds that Mt. Hawley (and, accordingly, North River) has no duty to defend and no duty to indemnify and that reformation of the insurance policy is inappropriate. As a result, Mt. Hawley's two motions for summary judgment shall be granted, North River's motion for summary judgment shall be granted, and MRPT's motion for summary judgment and motion for continuance or stay shall be denied.

         I. BACKGROUND

         This action arises from injuries suffered by Defendant Augustave on September 17, 2013, and the subsequent action filed by Augustave and his wife, Defendant Deselyn Joseph, in the Circuit Court of the Eleventh Judicial Circuit in and for Miami-Dade County, Florida, against Defendant MRPT and P&L Cargo Services, Inc. (which is not a party to this action) (the “Underlying Action”).

         A. Factual History

         1. Allegations in the Underlying Complaint

         In the amended complaint in the Underlying Action, Augustave alleges that P&L and MRPT “operated a joint venture to import and/or export goods to and from Haiti.” [ECF No. 1-6 ¶ 16] (the “Underlying Complaint”). According to his allegations, on the date of the incident, Augustave was performing work at 3300 N.W. North River Drive, Miami, Florida, 33142-the property owned by MRPT and being run by P&L and MRPT. Id. ¶ 10. A cargo vessel Sylvie was moored at the wharf on the Miami River at that address, which was also the principal office of P&L and MRPT. P&L and MRPT agreed to provide labor and assist the Sylvie in supervising the loading and unloading of containers from the ship to the dock. Id. ¶ 12. An “employee and/or agent of [P&L and MRPT], acting in the scope of his/her employment with [P&L and MRPT], negligently instructed [Augustave] to maneuver cargo and caused [him] severe personal injury resulting in paralysis.” Id. ¶ 15. Augustave and Wilson filed suit in state court on January 22, 2014, asserting claims for negligence and loss of consortium against P&L and MRPT.

         2. Insurance Policies Obtained by Raul and Lucrecia Gonzalez

         On March 23, 2010, Lucrecia Gonzalez sent an email to insurance agency Collinsworth, Alter, Fowler & French Group, Inc. (“CAFF”). The email concerned MRPT, a limited liability company of which she and her husband Raul Gonzalez were managing members and that they had formed on March 15, 2010, for the purpose of acquiring the real property located at 3300 N.W. North River Drive in Miami. In the email, Mrs. Gonzalez advised that she and her husband expected to close on that property on March 30, 2010. On that date, Mrs. Gonzalez sent another email to CAFF, in which she asked CAFF to “provide liability/umbrella coverage for the new property at Miami River Port Terminal, LLC.” [ECF No. 93-3 at 2].

         CAFF obtained for the Gonzalezes a commercial general liability policy from XL/Indian Harbor Insurance Company. The policy identified various persons and entities as “named in-sureds, ” but did not include MRPT, contrary to Mrs. Gonzalez's instructions to CAFF, though neither Mrs. Gonzalez nor CAFF noticed the omission. However, the then-existing commercial general liability insurance policy which CAFF had obtained for the Gonzalezes, issued by Essex Insurance Company, was amended on April 23, 2010, to add “Miami River Port Terminal, 3300 N.W. N River Drive, Miami, FL 33142” to the policy's schedule. [ECF No. 105-1].

         In anticipation of procuring insurance for the period from December 1, 2010, through December 1, 2011, CAFF prepared a schedule of insurance for the Gonzalezes, which described, among other things, the existing insurance. MRPT was not listed among the named insureds on the schedule. [ECF No. 96-1 at 12-13, 15; ECF No. 96-3 at 3]. The insurance application form to procure insurance for this 2010-11 policy period did not list MRPT among the entities to be insured. [ECF No. 96-1 at 16]. The insurance policy for this period did not list MRPT as an insured entity. [ECF No. 93-1 at 2].

         In anticipation of procuring insurance for the period from December 1, 2011, to December 1, 2012, CAFF again prepared a schedule of insurance for the Gonzalezes. MRPT was not listed among the named insureds on this schedule, as well. [ECF No. 96-1 at 17-19; ECF No. 96-4 at 3]. The insurance application form to procure insurance for this 2011-12 policy period did not list MRPT as among the entities to be insured. [ECF No. 96-4]. The insurance policy for this period was issued by Mt. Hawley. It did not list MRPT as a “named insured, ” but it did identify the location “3300-3334 N.W. N River Drive, Miami, FL” as a covered location. [ECF No. 96-5 at 4-5].

         Around this time, the Gonzaleses were advised that Mt. Hawley wished to conduct an inspection of the premises at 3300 N.W. North River Drive. The inspection was performed on January 6, 2012, by a representative of RRI, a company retained by Mt. Hawley. The inspection report identified “Raul and Lucrecia Gonzalez dba Okeechobee Apts” as the insured. [ECF No. 93-6 at 2]. The report states that the inspector met with “Ryan Gonzalez, the Owner who informed him that “Raul and Lucrecia Gonzalez are the property owners.” [Id.]. MRPT argues that Ryan Gonzalez is not a member of the Raul and Lucrecia Gonzalez's family or an employee of their family's companies, but rather an employee of P&L who served as a security guard. [ECF No. 94 ¶ 10].

         3. The Subject Policies

         In anticipation of procuring insurance for the period from December 1, 2012, to December 1, 2013 (the time during which Augustave's injury occurred), CAFF again prepared a schedule of insurance, and MRPT was again not listed as a named insured. The insurance application form to procure insurance for this 2012-13 policy period did not list MRPT as among the entities to be insured, but listed as a location “Miami River Port Terminal.” [ECF No. 98 ¶ 12; ECF No. 105 ¶ 12].

         The policy that is the subject of this action, for the December 1, 2012, through December 1, 2013, time period, Policy No. MGL0178574, was issued by Mt. Hawley to named insured “Raul and Lucretia Gonzalez dba Okeechobee Apts (See Schedule), ” [ECF No. 1-5] (the “Policy”). The declarations page of the Policy identified the “Form of Business” as “Organization (Other than Partnership, Joint Venture, or Limited Liability Company.” Policy at 2 (emphasis added). The Named Insured and Location Supplementary Schedule that accompanied the Policy listed a number of named insureds and covered locations; “Miami River Port Terminal, Miami, FL” is identified as a “Covered Location” but does not appear in the list of “Named Insureds.” Id. at 55-56.

         With respect to the coverage provided for bodily injury and property damage, the Policy states:

         SECTION I - COVERAGES

         COVERAGE A BODILY INJURY AND PROPERTY DAMAGE

         1. Insuring Agreement

a. We 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. We will have the right and duty to defend the insured against any “suit” seeking those damages. However, we will have no duty to defend the insured against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply.

Id. at 6. With respect to who is an insured for coverage for bodily injury, the Policy states:

         SECTION II - WHO IS AN INSURED

         1. If you are designated in the Declarations as: . . .

b. A partnership or joint venture, you are an insured. Your members, your partners, and their spouses are also insureds, but only with respect to the conduct of your business. . . .
d. An organization other than partnership, joint venture or limited liability company, you are an insured. Your “executive officers” and directors are insureds, but only with respect to their duties as your officers and directors. Your stockholders are also insureds, but only with respect to their liability as stockholders. . . .
No person or organization is an insured with respect to the conduct of any current or past partnership, joint venture or limited liability company that is not shown as a Named Insured in the Declarations.

Id. at 14-15 (emphasis added). No joint venture is listed as a Named Insured in the Policy's Declarations.

         Plaintiff-Intervenor North River Insurance Company issued a policy of excess liability coverage to named insureds Raul and Lucrecia Gonzalez with limits of $15 million for the policy period December 1, 2012, through December 1, 2013 (the “North River Policy”). When applicable, the North River Policy provides excess liability coverage over and above underlying primary liability coverage provided by the Mt. Hawley Policy, which is referred to as “controlling underlying insurance” in the North River Policy. The North River Policy provides, in relevant part, that it “does not apply to any liability arising out of or in any way related to . . . [a]ny liability excluded by CONTROLLING UNDERLYING INSURANCE, ” i.e. the Mt. Hawley Policy. [ECF No. 23-1 at 30 & ECF No. 23-2 at 1].

         4. MRPT Seeks to Be Listed ...


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