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Liberty Mutual Fire Insurance Co. v. Wal-Mart Stores East, LP

United States District Court, M.D. Florida, Tampa Division

August 25, 2017




         THIS CAUSE comes before the Court upon the following motions: (1) Plaintiff's Motion for Summary Judgment (Doc. 19) and Defendants' Response (Doc. 30); (2) Defendants' First Motion for Summary Judgment (Doc. 24), Plaintiff's Response (Doc. 29), and Defendants' Reply (Doc. 34); and (3) Defendants' Second Motion for Summary Judgment (Doc. 28) and Plaintiff's Response (Doc. 31). Upon review, the Court concludes that Plaintiff's motion should be granted in part and Defendants' motions should be denied.


         Gator Delray, L.C. (“Gator”) owns property at 3001 South Federal Highway in Delray Beach, Florida. The property is known as the South Delray Shopping Center. Effective February 16, 2012, Gator and Wal-Mart Stores East, LP (“Wal-Mart Stores East”) entered into a lease agreement for one of the buildings in the shopping center. Wal-Mart Stores, Inc. (“Wal-Mart”) guaranteed Wal-Mart Stores East's performance of all conditions of the lease.

         Pursuant to Section 10 of the lease agreement, Gator and Wal-Mart Stores East were both required to obtain liability insurance. Wal-Mart Stores East agreed to purchase insurance or self-insure in the amount of $3, 000, 000 to protect itself and Gator from liability for “injury or damage to persons or property and . . . damage upon and within the Demised Premises.” (Doc. 1-4, p. 18-19.) Wal-Mart Stores East further agreed to defend and indemnify Gator “from and against any and all liability, which . . . arise from or are in connection with the possession, use, occupation, management, repair, maintenance or control of the Premises, or any portion thereof by [Wal-Mart Stores East] or its authorized agents, employees, contractors, sub-lessees or any other party claiming by or through [Wal-Mart Stores East].” (Id. at 19.) In return, Gator agreed to obtain insurance covering “the Common Areas, buildings (excluding the Demised Premises and any other building insured by tenants thereof), appurtenances and other improvements constituting the Shopping Center.” (Id. at 20.)

         The lease agreement required Wal-Mart Stores East to make a number of improvements to the Demised Premises. These improvements included “roof repairs and/or replacement.” (Id. at 11.) Thus, Wal-Mart Stores East hired Bandes Construction Company to repair part of the roof. On August 26, 2013, Bandes' superintendent, Mark Callahan, fell through the roof and seriously injured himself.

         On February 26, 2015, Callahan and his wife filed suit against Gator and Wal-Mart based on the injuries he sustained from the fall. They alleged that the defendants' negligence and Gator's breach of its non-delegable duties as property owner caused his injuries.

         Wal-Mart responded to the lawsuit. Due to an oversight by Gator's office manager, Gator did not. The court entered a clerk's default against Gator on April 13, 2015. Months later, Gator's office manager realized her mistake. In September 2015, she asked Liberty Mutual to defend and indemnify Gator, but Liberty Mutual refused. There is a dispute of fact as to whether she subsequently asked Wal-Mart to defend or indemnify Gator.[1] If she did, Wal-Mart did not respond.

         On November 18, 2015, Gator moved to set aside the default. On February 11, 2016, Liberty Mutual withdrew its disclaimer of coverage and agreed to defend and indemnify Gator. Then, on February 12, 2016, the court held a hearing regarding the motion to vacate but deferred ruling on the matter.

         On February 23, 2016, the Callahans demanded that Liberty Mutual tender its liability coverage limits of $1, 000, 000 within 30 days in exchange for a release of Gator. On March 11, 2016, Gator's counsel tendered the demand to Wal-Mart and asked Wal-Mart to respond pursuant to its contractual obligation to defend and indemnify Gator. On March 16, 2016, Liberty Mutual's counsel asked the Callahans if they would release both Gator and Wal-Mart in exchange for payment of the $1, 000, 000 policy limit. The Callahans agreed. On March 18, 2016, Liberty Mutual's counsel wrote to Wal-Mart's counsel and asked if Wal-Mart would honor its agreement to indemnify Gator. Wal-Mart replied to both Gator and Liberty Mutual, explaining that it would not respond to the Callahans' demand because it had no duty to defend or indemnify Gator. Ultimately, Liberty Mutual tendered the $1, 000, 000 to the Callahans in exchange for a release of both Gator and Wal-Mart.

         Thereafter, Liberty Mutual filed this action, suing Wal-Mart and Wal-Mart Stores East for breach of contract (Counts 1 and 2), indemnity (Count 3), equitable subrogation (Count 4), statutory contribution (Count 5), equitable contribution (Count 6), and unjust enrichment (Count 7). Defendants responded to the lawsuit by raising twenty-eight affirmative defenses. The Parties now have pending motions for summary judgment.


         Motions for summary judgment should be granted only when the pleadings, depositions, answers to interrogatories, admissions, and 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 nonmovant 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, the nonmoving party must go beyond the pleadings through the use of affidavits, depositions, answers to interrogatories, and admissions 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, there must exist a conflict in substantial evidence to pose a jury question. Verbraeken v. Westinghouse Elec. Corp., 881 F.2d 1041, 1045 (11th Cir. 1989).


         Defendants move for summary judgment on all of seven claims, as well as two of their affirmative defenses. Plaintiff, in turn, moves for summary judgment on four of its claims and a number of Defendants' defenses. The Court will analyze the claims first and then the affirmative defenses.

         Count 1 - Breach of Lease's Self-Insurance Clause

         In Count 1, Liberty Mutual argues that Defendants breached the lease's self-insurance clause, which required Defendants to provide insurance to protect Gator and Wal-Mart Stores East from “injury or damage to persons . . . upon and within the Demised Premises.” (Doc. 1-4, p. 18-19.) Liberty Mutual contends that Defendants breached this clause by failing to defend and indemnify Gator in the Callahans' lawsuit.

         Defendants argue that the Court should grant summary judgment on Count 1 because Liberty Mutual has no standing to sue them for breach of the lease agreement. More specifically, they argue that Liberty Mutual cannot sue to enforce the lease because it was not a party to, or a third-party beneficiary of, the lease.

         Defendants are correct that Liberty Mutual is not a third-party beneficiary of the lease. However, Liberty Mutual does not need to be in order to sue Defendants for breach of contract because Gator assigned Liberty Mutual that right. The Liberty Mutual insurance policy has a provision called “Transfer of Rights of Recovery Against Others to Us, ” which provides the following: “If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us.” (Doc. 2, p. 39.) Through this provision, Gator assigned any rights of recovery it had to Liberty Mutual. Since Gator would have the right to sue Defendants for breach of the lease, Liberty Mutual does too, as Gator's assignee.

         Now that the Court has determined that Liberty Mutual has standing to sue Defendants for breach of the lease, the Court will evaluate Liberty Mutual's argument that it should grant summary judgment on Count 1. The Court will first analyze Defendants' duty to defend and then their duty to indemnify pursuant to the lease's self-insurance clause.

         Duty ...

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