Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Raynor Marketing, Ltd. v. Phoenix Insurance Co.

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

January 2, 2018



          Timothy J. Corrigan, Judge

         This diversity insurance coverage dispute is before the Court on Defendant Phoenix Insurance Company's (“Phoenix”) Motion to Dismiss Count III of Plaintiff's Complaint with Prejudice and Incorporated Memorandum of Law (Doc. 17). Plaintiff Raynor Marketing, LTD. (“Raynor”) responded (Doc. 25), Phoenix replied (Doc. 34), and Raynor filed a sur-reply (Doc. 35).

         I. BACKGROUND

         Around October 16, 2012, James Lee fell and injured his back when the Real Space Pro 9000 Quantum Chair (“Quantum Chair”) he was sitting on broke. (Doc. 1 ¶ 19).[1] Raynor, a New York corporation, manufactures, markets, sells, and distributes wholesale office seating products, including the Quantum Chair. (Doc. 1 ¶ 4, 7, 18). Previously, in June, 2008, Raynor and Office Depot entered into a Vendor Agreement, which includes a provision requiring Raynor to indemnify Office Depot for lawsuits arising from Raynor products sold to Office Depot. (Doc. 1 ¶ 16). Then in August, 2011, Raynor and Office Depot entered into a Purchase Order Agreement wherein Office Depot agreed to purchase and sell Raynor products. (Doc. 1 ¶ 17).

         For the period of April 7, 2012 through April 7, 2013, Phoenix issued a Commercial General Liability Policy, number Y-630-7075X381-PHX-12, to Raynor. (Doc. 1 ¶ 8). The policy has a $1 million per occurrence limit. (Doc. 1 ¶ 9). The Policy contains an endorsement that purports to add vendors as an additional insured for bodily injury or property damage arising out of Raynor's products. (Doc. 1 ¶ 10). For this same period, Liberty Mutual issued an umbrella liability policy to Raynor providing coverage up to $5 million per occurrence in excess of the Phoenix policy. (Doc. 1 ¶ 11).

         Approximately one week after being injured, Lee contacted Raynor and Office Depot concerning the broken Quantum Chair. (Doc. 1 ¶ 20). Several days later, Raynor informed Lee that his information was provided to Phoenix, and Raynor notified Phoenix of Lee's claim. (Doc. 1 ¶ 22). Phoenix assigned an adjuster to handle the claim. (Doc. 1 ¶ 24). Around April 10, 2014, Lee sent a settlement demand letter to Phoenix seeking $2 million. (Doc. 1 ¶ 25). Phoenix appointed a lawyer to defend Raynor for the Lee claim and Raynor requested that Phoenix appoint a separate lawyer to defend Office Depot. (Doc. 1 ¶ 2-30). Around May 23, 2014, Lee filed suit in Duval County against Raynor and Office Depot. (Doc. 1 ¶ 31). Around October 30, 2015, Lee offered to settle the suit for $6 million. (Doc. 1 ¶ 43).

         While the settlement discussions were ongoing, Raynor, Office Depot, Phoenix, and Liberty Mutual disputed how the claim should be handled. (Doc. 1 ¶ 36-45). Phoenix believed that fact discovery was necessary before settlement, but Raynor and Office Depot believed that a quick settlement without fact discovery was in everyone's best interest. (Doc. 1 ¶ 36-45). The parties continue to dispute the extent to which Phoenix is responsible for covering Office Depot-Phoenix believes that it is only required to cover Office Depot to the extent of Raynor's fault, whereas Raynor and Office Depot believe that Phoenix is required to completely indemnify Office Depot for the Lee claim. (Doc. 1 ¶ 45-50).

         Lee and Phoenix participated in mediation, at which Phoenix stated that it valued Lee's claim at $1, 500, 000, but only would contribute $750, 000 “because Phoenix attributed 50% of the negligence to Raynor and the remaining 50% to Office Depot.” (Doc. 1 ¶ 52). Raynor and Office Depot dispute Phoenix's position and expressed this to Phoenix several times. (Doc. 1 ¶ 53-65). On March 24, 2016, the parties held a second mediation at which Phoenix tendered the same offer. (Doc. 1 ¶ 66-68). On May 13, 2016 Lee's claim was settled for $2, 100, 000, but Phoenix only contributed $850, 000 and Raynor tendered the remainder. (Doc. 1 ¶ 74). Liberty Mutual did not contribute to the settlement, claiming that its policy did not come into effect until the Phoenix policy limits were exhausted. (Doc. 1 ¶ 67, 74).

         On April 13, 2017, Raynor filed a three count Complaint alleging breach of contract (Count I) and bad faith in violation of section 624.155, Florida Statutes (Count III) against Phoenix, and breach of contract (Count II) against Liberty Mutual. (Doc. 1). Phoenix seeks dismissal only for Count III-Raynor's bad faith claim. (Doc. 17).

         II. ANALYSIS

         A. Choice of Law

         Federal courts sitting in diversity apply the forum state's choice of law rules. Rando v. Gov't Emps. Ins. Co., 556 F.3d 1173, 1176 (11th Cir. 2009). For contracts, Florida follows the lex loci contractus standard, meaning that the place of contracting is the law that governs interpretation of the contract. Id. However, “questions related to the manner or method of performance under a contract are determined by the law of the place of performance.” Higgins v. W. Bend Mut. Ins. Co., 85 So.3d 1156, 1158 (Fla. 5th DCA 2012) (citing Gov't Emps. Ins. Co. v. Grounds, 332 So.2d 13, 14 (Fla. 1976)). Contract choice of law principles apply to bad faith actions. Grounds, 332 So.2d at 14-15. Since this is a third party bad faith claim, the law of the place of performance will control. MI Windows & Doors, LLC. v. Liberty Mut. Fire Ins. Co., 88 F.Supp.3d 1326, 1328-31 (M.D. Fla. 2015).[2]

         Florida law governs the substantive bad faith claim. See Grounds, 332 So.2d at 14. The insurance adjuster was located in Florida, the coverage determinations took place in Florida, the Underlying Action was filed in Florida, the settlement discussions took place in Florida, both mediations took place in Florida, and the settlement transpired in Florida. (Docs. 17 at 5; 25 at 7). As the performance at issue took place in Florida, Florida law applies. See Grounds, 332 So.2d at 14; (Docs. 17 at 5; 25 at 7).

         B. ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.