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Zurich American Insurance Co. v. National Specialty Insurance Co.

United States District Court, S.D. Florida

March 28, 2017




         THIS CAUSE is before the Court upon Motions for Summary Judgment filed by Plaintiff Zurich American Insurance Company (“Zurich”), ECF No. [27], and Defendant National Specialty Insurance Company (“National”), ECF No. [19], (collectively, the “Motions”). The Court has carefully reviewed the Motions, the record, all supporting and opposing filings, the exhibits attached thereto, and is otherwise fully advised in the premises. For the reasons that follow, Zurich's Motion for Summary Judgment is granted and National's Motion for Summary Judgment is denied.

         I. BACKGROUND

         A. The Underlying Lawsuit

         Mikhael Maroudis (“Maroudis”), an employee of Diner 84, Inc. (“Diner 84”), filed a lawsuit against Davie Plaza, LLC (“Davie Plaza”) in the Seventeenth Judicial Circuit in and for Broward County, Florida (“Underlying Lawsuit”). ECF No. [25] (Pl. Ctr. Stat. Facts) ¶1 (“Undisputed Facts”)[1]; ECF No. [27-1]. Maroudis later passed away from causes unrelated to the Underlying Lawsuit, and his personal representative pursued these claims on behalf of Maroudis's estate. Undisputed Facts ¶1.

         The Second Amended Complaint filed in the Underlying Lawsuit alleged that, on June 22, 2007, Maroudis's supervisor told him to climb onto the roof of Diner 84 to repair a leak.[2] Id. ¶4. To do so, Maroudis's supervisor instructed him to use Diner 84's ladder, climb to the first level of the roof, and then use the same ladder to climb onto the second level. Id. ¶5. Maroudis positioned the ladder one foot outside of Diner 84's rear kitchen door and leaned the top of the ladder against the building. Id. ¶6, 7. He then placed the bottom of the ladder on an uneven surface that divides the asphalt from the concrete. Id. ¶7; Def. Stat. Facts ¶2(e); ECF No. 20-1 at 57-58, 65, 80, 89-90, and 99-101. After climbing onto Diner 84's roof and taking care of the leak, Maroudis descended the ladder, and as he did so, it shifted and caused him to fall to the ground. Undisputed Facts ¶3, 8; ECF No. [27-2] ¶12-14.

         Maroudis pursued a negligence claim against Davie Plaza to recover for personal injuries, alleging that Davie Plaza “failed to provide a reasonably safe premises at that time that it turned over the property to its tenant.” ECF No. [19] (“Def. Stat. Facts”) ¶2(f). The Underlying Lawsuit culminated in a jury trial, and on September 11, 2015, a jury entered a verdict in the amount of $15, 212, 930.77. Def. Stat. Facts ¶2(h); ECF No. [19-3]. The jury found that the negligence of Davie Plaza, “84 Diner” and Maroudis were a legal cause of loss, injury or damage to Maroudis. Id. In apportioning liability, the jury found Davie Plaza 98% at fault while Maroudis and “84 Diner” were each 1% at fault. Id.

         B. The Insurance Policies

         National issued a commercial general liability policy to Diner 84, No. RCE400595-07, in effect from June 14, 2007 to June 14, 2008 with policy limits of $1, 000, 000 per occurrence and $2, 000, 000 in the aggregate (“National policy”). Undisputed Facts ¶9; Def. Stat. Facts ¶2(b); ECF No. [27-3] at 3. The National policy contains an Additional Insured-Managers and Lessors of Premises Endorsement (“Endorsement”) which, on July 25, 2007, was amended to specifically reference Davie Plaza. Undisputed Facts ¶10, 11; Def. Stat. Facts ¶2(b); ECF No. [27-3] at 2. The Endorsement provides as follows:

WHO IS AN INSURED (Section II) is amended to include as an insured the person or organization shown in the Schedule but only with respect to liability arising out of the ownership, maintenance or use of that part of the premises leased to you and shown in the Schedule and subject to the following additional exclusions:

         This insurance does not apply to:

1. Any “occurrence” which takes place after you cease to be a tenant in that premises.
2. Structural alterations, new construction or demolition operations performed by or on behalf of the person or organization shown in the Schedule.

         Undisputed Facts ¶11; ECF No. [27-3] at 91. The Endorsement identifies the premises leased to Diner 84 as “11432 W STATE RD 84 FT. LAUDERDALE, FL 33325.” ECF No. [27-3] at 91.

         In addition, Davie Plaza is a named insured under a commercial general liability insurance policy, No. GLO8445651-07, issued by Zurich and in effect from June 1, 2007 to June 1, 2008 (“Zurich policy”). Undisputed Facts ¶16; ECF No. [27-4]. Both the Zurich and the National policies contain identical “Other Insurance” clauses that, in pertinent part, state:

         4. Other Insurance

         If other valid and collectible insurance is available to the insured for a loss we cover under Coverages A and B, our obligations are limited as follows:

a. Primary Insurance This insurance is primary except when paragraph b. below applies. If this insurance is primary, our obligations are not affected unless any of the other insurance is also primary. Then, we will share with all that other insurance by the method described in c. below.
b. Excess Insurance

         The insurance is excess over:

(2) Any other primary insurance available to you covering liability for damages arising out of the premises or operations, or the products and completed operations, for which you have been added as an additional insured by attachment of an endorsement.
When this insurance is excess, we will have no duty under Coverage A or B to defend the insured against any “suit” if any other insurer has a duty to defend the insured against that “suit.” If no other insurer defends, we will undertake to do so, but we will be entitled to the insured's rights against all those other insurers.

         Undisputed Facts ¶15.

         On July 27, 2011, Zurich's counsel sent a letter to National and Diner 84 in which it tendered Davie Plaza's defense and indemnity for the claims in the Underlying Lawsuit. Undisputed Facts ¶17. National declined to defend or indemnify Davie Plaza under the National policy, stating that Maroudis's incident occurred in a “Common Area” under the lease between Diner 84 and Davie Plaza. Id. ¶18. To date, Zurich has incurred $168, 502.95 in fees and costs relating to the defense of the underlying lawsuit. Id. ¶19.[3]

         C. The Lease

         On November 28, 2001, TNA Enterprises, Inc. d/b/a 84 Diner entered into a lease agreement with Davie Plaza for the lease of certain space located at 11426 State Road in Davie, Florida (“the Lease”). Def. Stat. Facts ¶2(a); ECF No. [19-1] at 1, 6.[4] The Lease contains the following definitions:

1.1 “Common Area”
All areas and facilities in the Shopping Center designated for the general use, in common, of tenants of the Shopping Center, including the Tenant hereunder, its officers, agents, employees and customers. Common areas shall include, without limitation, to the extent provided, the parking areas, sidewalks, roadways, loading platforms, restrooms, ramps and landscaped areas.
1.2 “Premises”
That certain space located in a building erected or to be erected in the Shopping Center containing approximately 1, 283 square feet of Floor Area identified as a portion of Bay 25 on the site plan (the “Site Plan”) attached hereto as Exhibit “8” and by this reference incorporated herein.
ECF No. [19-1] at 6.

         The Lease also contains the following language involving control of the “Common Area”:

9.1. Control of Common Areas by Landlord
All automobile parking areas, driveways, entrances and exits thereto, and other facilities furnished by Landlord in or near the Shopping Center, including employee parking areas, the truck way or ways, loading docks, package pick-up stations, pedestrian sidewalks and ramps, landscaped areas, exterior stairways, and other areas and improvements provided by landlord for the general use, in common, of tenants, their officers, agents, employees and customers, shall at all times be subject to the exclusive control and management of Landlord, and Landlord shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect to all facilities and areas mentioned in this Article. Landlord shall have the right to construct, maintain and operate lighting facilities on all said areas and improvement from time to time to change the area, level, location and arrangement of parking areas and other facilities hereinabove referred to and to restrict parking by tenants, their officers, agents and employees to employee parking areas. Landlord shall not have any duty to police the traffic in the parking areas.

         ECF No. ...

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