United States District Court, M.D. Florida, Fort Myers Division
OPINION AND ORDER
E. STEELE UNITED STATES DISTRICT JUDGE.
matter comes before the Court on the parties' Cross
Motions for Summary Judgment (Docs. #42, 51). The parties
filed responses in opposition to each other's motion
(Docs. ##44, 53), and a reply (Doc. #47) and a surreply (Doc.
#50). Both parties seek judgment as to defendant's duty
to defend pursuant to two almost identical insurance
policies. Both parties agree that there are no disputed
issues of material fact which preclude summary judgment for
one of them, although they dispute who should prevail. For
the reasons set forth below, the Court grants summary
judgment in favor of plaintiff.
insurance coverage dispute, plaintiff-insurer Southern-Owners
Insurance Company seeks a declaratory judgment that it has no
duty to defend or indemnify defendant-insured MAC Contractors
of Florida, LLC (d/b/a KJIMS Construction) for claims
asserted in a currently pending state-court lawsuit brought
by Paul and Deborah Doppelt, styled Doppelt et al. v. MAC
Contractors of Florida, LLC d/b/a KJIMS Construction,
No. 2016-CA-1530 (the “Doppelt Action”).
In particular, Southern-Owners seeks a declaratory judgment
that certain policy exclusions apply and thus,
Southern-Owners has no duty to defend or indemnify MAC for
the claims Doppelts asserts against it. (Doc. #21.) MAC
(d/b/a KJIMS Construction) filed a counterclaim seeking a
declaration that Southern-Owners was obligated to defend and
indemnify MAC. (Doc. #31.)
Court previously stayed the indemnity issue pending the
Court's determination of the duty to defend issue or the
Doppelt Action's conclusion, reasoning that if
Southern-Owners had no duty to defend MAC, it follows that
Southern-Owners has no duty to indemnify. (Doc. #39); see
Trailer Bridge, Inc. v. Ill. Nat'l Ins. Co., 657
F.3d 1135, 1146, n.2 (11th Cir. 2011) (collecting Florida
cases) (“[A] court's determination that the insurer
has no duty to defend requires a finding that there is no
duty to indemnify.”).
may grant summary judgment only if satisfied that
“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(a). A fact is
“material” if it goes to “a legal element
of the claim under the applicable substantive law” and
thus may impact the case's outcome. Allen v. Tyson
Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997).
“An issue of fact is ‘genuine' if the record
taken as a whole could lead a rational trier of fact to find
for the nonmoving party.” Hickson Corp. v. N.
Crossarm Co., 357 F.3d 1256, 1260 (11th Cir. 2004).
burden of establishing that there is no genuine issue of
material fact lies with the moving party.” Walker
v. Darby, 911 F.2d 1573, 1576 (11th Cir. 1990) (quoting
Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
(1986)). “[O]nce the moving party has met that burden
by presenting evidence which, if uncontradicted, would
entitle it to a directed verdict at trial, ” the party
opposing summary judgment must “set forth specific
facts showing that there is a genuine issue for trial. A mere
‘scintilla' of evidence supporting the opposing
party's position will not suffice; there must be enough
of a showing that the jury could reasonably find for that
party.” Id. at 1576-77. In ruling on the
motion, the court must view all evidence and draw all
reasonable inferences in favor of the non-moving party.
Scott v. Harris, 550 U.S. 372, 380 (2007); Tana
v. Dantanna's, 611 F.3d 767, 772 (11th Cir. 2010).
judgment should be denied not just where the parties disagree
on issues of material fact, but also “where the parties
agree on the basic facts, but disagree about the factual
inferences that should be drawn from these facts.”
Warrior Tombigbee Transp. Co. v. M/V Nan Fung, 695
F.2d 1294, 1296 (11th Cir. 1983); see also Allen v. Bd.
of Pub. Educ., 495 F.3d 1306, 1315 (11th Cir. 2007)
(“If a reasonable fact finder evaluating the evidence
could draw more than one inference from the facts, and if
that inference introduces a genuine issue of material fact,
then the court should not grant summary judgment.”).
Put simply, if the resolution of a material fact or the
inference to be drawn therefrom presents a “he said,
she said” scenario, and if the record has evidence
genuinely supporting both sides of the story, then summary
judgment is not appropriate.
Substantive Legal Principles
Duty to Defend
diversity action, the Court must apply the “substantive
law of the forum state.” Tech. Coating Applicators,
Inc. v. U.S. Fid. & Guar. Co., 157 F.3d 843, 844
(11th Cir. 1998). In this case, Florida law applies. The duty
to defend is distinct from, and broader than, the duty to
indemnify. Keen v. LA. Sheriff's Self-Ins., 962
So.2d 1021, 1024 (Fla. 4th DCA 2007). Under Florida law,
“[i]t is well settled that an insurer's duty to
defend its insured against a legal action arises when the
complaint alleges facts that fairly and potentially bring the
suit within policy coverage. The duty to defend must be
determined from the allegations in the complaint.”
Jones v. Florida Ins. Guar. Ass'n, Inc., 908
So.2d 435, 442-43 (Fla. 2005) (citations omitted). This duty
to defend exists “even if the allegations in the
complaint are factually incorrect or meritless.”
Id. at 443. “If the complaint alleges facts
partially within and partially outside the coverage of the
policy, the insurer is obligated to defend the entire
suit.” Category 5 Mgmt. Grp. LLC v. Companion Prop.
& Cas. Ins. Co., 76 So.3d 20, 23 (Fla. 1st DCA
2011). See also Marr Inv., Inc. v. Greco, 621 So.2d
447, 449 (Fla. 4th DCA 1993) (“[T]he burden of
demonstrating that the allegations of the complaint are cast
solely and entirely within [a] policy exclusion” rests
with the insurer.). Any doubt as to the duty to defend is
resolved in favor of the insured. Id. Therefore, the
Court looks to the complaint filed in the Doppelt
Action and assumes all facts are accurate. See
Jones, 908 So.2d at 443.
courts should narrowly construe exclusions to an insurance
policy, “exclusions are presumptively valid and will be
given effect if specific, plain, clear, prominent, and not
contrary to public policy.” C.R. Bard, Inc. v.
Liberty Mut. Ins. Co., 473 Fed.Appx. 128, 132 (11th Cir.
2012). An insurer has no duty to defend if the allegations in
the underlying complaint show the applicability of a policy
exclusion. Essex Ins. Co. v. Big Top of Tampa, Inc.,
53 So.3d 1220, 1223-24 (Fla. 2d DCA 2011); State Farm
Fire and Cas. Co. v. Tippett, 864 So.2d 31, 35 (Fla. 4th
DCA 2003). “Because they tend to limit or avoid
liability, exclusionary clauses are construed more strictly
than coverage clauses.” Category 5 Mgmt. Grp.,
76 So.3d at 23. The insurer “has the burden of
demonstrating that the allegations of the complaint are cast
solely and entirely within the policy exclusion and are
subject to no other reasonable interpretation.”
Northland Casualty Co. v. HBC Corp., 160 F.Supp.2d
1348, 1359 (M.D. Fla. 2001).
Pertinent Allegations of the Doppelt Action
2014, MAC contracted with the Doppelts to serve as the
general contractor in the construction of a residence in
Marco Island, Florida. (Doc. #21-3, ¶¶ 13-16; Exh.
A.) Due to a dispute between the parties, the Doppelts allege
that MAC left the job site prior to completing the residence
in breach of the parties' contract and prior to the
issuance of a certificate of occupancy.Because the
residence remained replete with construction defects, the
Doppelts served MAC with a Notice of Defect pursuant to Fla.
Stat. § 558.01, et. seq., identifying
eighty-six distinct defects that were caused by MAC and/or
its subcontractors that MAC failed to correct. (Doc. #21-3,
¶¶ 38-39, 43-44; Doc. #31-5, Exh. B.) MAC claimed
that the list of defects were simply “punch-list
items.” (Id., ¶ 56.) MAC failed to cure
the defects. The Doppelts allege that this was an
anticipatory repudiation and total breach of the contract.
(Id., ¶ 42.)
August 24, 2016, the Doppelts filed suit in state court
against MAC for breach of contract, alleging construction
defects. Specifically, in the Verified First-Filed Complaint
(Doc. #31-5), the Doppelts alleged, among other things,
“damage to wood floors and the metal roof.”
(Id., ¶ 54.) Additionally, the First-Filed
Complaint incorporated as an exhibit the Section 558 Notice
that listed eighty-six defects. (Id., ¶ 45.)
November 17, 2016, the Doppelts filed an Unverified Amended
Complaint (Doc. #21-3), alleging nearly the same allegations
as the First-Filed Complaint, but stating for the first time
that MAC “abandoned” the project:
Contractor refused to complete the contract, abandoned the
project, ordered his subcontractors to also abandon the
project and to refuse to work with the Owners in completing