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Peninsula II Developers, Inc. v. Westchester Fire Insurance Co.

United States District Court, S.D. Florida

April 25, 2018




         THIS MATTER is before the Court on the cross motions for summary judgment of Westchester Fire Insurance Company [DE 471] and Plaintiff Gryphon Construction, LLC [DE 475]. This suit arose out of the installation of Chinese drywall in a condominium project developed by now-dismissed Plaintiff Peninsula II Developers, Inc. ("Peninsula"). Gryphon Construction, LLC ("Gryphon") was the general contractor for the project. Defendant Westchester Fire Insurance Co. ("Westchester") issued an excess liability insurance policy under an owner controlled insurance program for the project, under which Gryphon is an insured. Gryphon's amended complaint alleges claims for declaratory judgment and breach of contract based on Westchester's failure to indemnify certain expenses Gryphon incurred and also seeks Gryphon's attorneys' fees.

         Having reviewed the parties' papers and the record, the Court grants Westchester's motion and denies Gryphon's. Gryphon is not entitled to its attorneys' fees and because Florida's confession of judgment doctrine does not apply to the circumstances of this case. Under California law, Westchester's policy does not give rise to an indemnity obligation for the particular damages Gryphon seeks. Therefore, Westchester is entitled to summary judgment.


         The construction of a 223-unit luxury condominium in Aventura, Florida called the Peninsula II Condominium (the "Project") led to this case. The developer of the Project, Peninsula entered into an agreement for the construction of the Project with a contractor, Plaintiff Gryphon. Gryphon, in turn, entered into a subcontract with Plaintiff Skyline Systems, Inc. ("Skyline") to supply and install drywall in the units and common areas of the Project.

         The Insurance Policies

         To insure the Project, Peninsula set up an owner controlled insurance program ("OOP").Under the Peninsula OCIP, American Home Assurance Company ("American Home") issued three primary commercial general liability policies for the construction of the Project for consecutive terms lasting between May 15, 2005 and March 30, 2008. Peninsula is listed as the "named insured" on the first page of each of the policies, but on the "Name Insured Endorsement" pages, Gryphon and Skyline, as contractors and subcontractors, are also identified as insureds. (DE 473-1 at 49.) The American Home policy contains the following "Insuring Agreement:"

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.
No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under [other sections of this policy].

(DE 473-1 at 11.)

         Westchester provided excess liability insurance coverage for the Project. (DE 473-2.)

         Westchester's policy contains the following three pertinent provisions:

         Insuring Agreement

To pay on behalf of the "Insured" for that amount of loss which exceeds the amount of loss payable by "Underlying Insurance" described in the Declarations, but the Company's obligation hereunder shall not exceed the limit of liability stated in Declaration 6.

(Id. at 3 (capitalization altered).) Following that language is the following:

         Condition C, Loss Payable, Is Amended As Follows:

Liability of the Company with respect to any one occurrence shall not attach unless and until the Insured, or the Insured's underlying insurer, has paid the amount of underlying insurance stated in Declarations 5. If the Company is obligated to indemnify the Insured, the Insured must make a definite claim for loss within twelve (12) months after the Insured has paid any amount of excess loss, as stated in Declaration 6; or after the Insured's liability shall have been made certain by final judgment or by written agreement of the Insured, the Claimant, and the Company. [6]Any subsequent payments made by the Insured on account of the same occurrence shall be payable by the Company within thirty (30) days after additional claim is made by the Insured, and after the Insured has shown proof in conformity with this policy.

(Id. at 3 (capitalization altered).) Finally, the Westchester policy contains language stating that it follows form to the underlying American Home policy:

Application of Underlying Insurance. Except as otherwise stated herein, and except with respect to (1) any obligation to investigate or defend any claim or suit, or (2) any obligation to renew, the insurance afforded by this policy shall apply in like ...

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