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Alicea Enterprises, Inc. v. Nationwide Insurance Co. of America, Inc.

Florida Court of Appeals, Second District

August 1, 2018

ALICEA ENTERPRISES, INC., a Florida corporation, now converted to Alicia Enterprises, LLC, d/b/a SUNLAKE PHARMACY and also d/b/a PHYSICIAN SPECIALTY COMPOUNDING, LLC; PHYSICIAN SPECIALTY COMPOUNDING, LLC, a Florida Limited Liability Company, d/b/a SUNLAKE PHARMACY; HUY BA LE; and INGRID MARY BENDECK, Appellants/Cross-Appellees,
v.
NATIONWIDE INSURANCE COMPANY OF AMERICA, INC., JOSEPH STAHEL, and REMEE JO LEE, Appellees/Cross-Appellants.

         NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED

          Appeal pursuant to Fla. R. App. P. 9.030(b)(1)(A) from the Circuit Court for Hillsborough County; Elizabeth G. Rice, Judge.

          Nataliia G. Artemova and Daniel G. Musca of Lexium PLLC f/k/a Tampa Law Source, P.A., Tampa, for Appellants/Cross-Appellees.

          Hinda Klein, of Conroy Simberg, Hollywood, for Appellee/Cross-Appellant, Nationwide Insurance Company

          No appearance for remaining Appellees/ Cross-Appellants.

          BADALAMENTI, Judge.

         Nationwide Insurance Company of America[1] issued a general liability insurance policy to Alicea Enterprises, Inc., which owns and operates Sunlake Pharmacy.[2] In an underlying lawsuit, Remee Jo Lee alleges, among other things, claims against the Pharmacy and its employees for negligent acts causing her injuries. The facts giving rise to the underlying action stem from the Pharmacy's alleged part in Remee Jo Lee's miscarriage that was caused by her then-boyfriend, John Andrew Weldon (Andrew), duping her into taking an abortifacient drug she believed simply to be an antibiotic.[3]

         Nationwide filed a complaint for declaratory relief, requesting a decree from the trial court that it neither had a duty to defend nor a duty to indemnify the Pharmacy in the underlying lawsuit. Less than four months after it filed for this declaratory relief, Nationwide filed a motion for summary judgment, asserting that the policy it issued to the Pharmacy expressly excluded coverage for "professional services." Nationwide contended that "100%" of Ms. Lee's allegations in the underlying lawsuit are excluded from coverage because they arose out of the professional "[s]ervice, treatment, advice or instruction in the practice of pharmacy."

         The trial court denied Nationwide's motion for summary judgment as to its duty to defend the Pharmacy in Ms. Lee's underlying lawsuit. It reasoned that Ms. Lee's underlying complaint "contains allegations that potentially could be deemed as unrelated to professional services and potentially could bring the Tort action at this time within the coverage provided by the Insurance Policy." The trial court, however, went on to grant Nationwide's motion for summary judgment on its duty to indemnify the Pharmacy from any damages awarded to Ms. Lee in her underlying lawsuit. The trial court reasoned that "there could never be a set of circumstances where there would be a duty to indemnify as a matter of law." The Pharmacy appeals the grant of summary judgment to Nationwide on the duty to indemnify, and Nationwide cross-appeals the denial of its motion for summary judgment on the duty to defend.

         After de novo review and the benefit of oral argument, we affirm the trial court's denial of Nationwide's motion for summary judgment on the duty to defend the Pharmacy in the underlying lawsuit. We are in lockstep with the trial court's reasoning that Ms. Lee's allegations could potentially "be deemed as unrelated to professional services and potentially could bring the Tort action at this time within the coverage provided by the Insurance Policy." Accordingly, because Ms. Lee's underlying complaint alleged facts that fairly and potentially bring the suit within the policy's coverage, we affirm the trial court's denial of Nationwide's motion for summary judgment on the duty to defend. See Jones v. Fla. Ins. Guar. Ass'n, 908 So.2d 435, 442-43 (Fla. 2005) ("It 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." (citing State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072, 1077 n.3 (Fla. 1998))); see also Fla. R. Civ. P. 1.510(c); LoBello v. State Farm Fla. Ins. Co., 152 So.3d 595, 598 (Fla. 2d DCA 2014) ("If the record reflects the existence of any genuine issue of material fact or the possibility of any issue, or if the record raises even the slightest doubt that an issue might exist, summary judgment is improper." (quoting Holland v. Verheul, 583 So.2d 788, 789 (Fla. 2d DCA 1991))).

         We disagree with the trial court's decision to grant summary judgment to Nationwide on its duty to indemnify the Pharmacy from any damages attributable to it in Ms. Lee's underlying lawsuit. An insurer's duty to indemnify is "determined by analyzing the policy coverage in light of the actual facts in the underlying case." Diamond State Ins. Co. v. Boys' Home Ass'n, 172 F.Supp.3d 1326, 1342 (M.D. Fla. 2016) (quoting J.B.D. Constr., Inc. v. Mid-Continent Cas. Co., 571 Fed. App'x. 918, 927 (11th Cir. 2014)). Therefore, in deciding whether an insurer has a duty to indemnify, the trial court must look beyond the allegations in the underlying complaint. "The duty to indemnify is thus often dependent upon further factual development through discovery or at trial." Khatib v. Old Dominion Ins. Co., 153 So.3d 943, 947-48 (Fla. 1st DCA 2014) (reversing for further proceedings on the insurer's duty to indemnify because a ruling on that duty was premature without further factual development); Pa. Lumbermens Mut. Ins. Co. v. Ind. Lumbermens Mut. Ins. Co., 43 So.3d 182, 188 (Fla. 4th DCA 2010) ("While the duty to defend is broad and based on the allegations in the complaint, the duty to indemnify is determined by the facts adduced at trial or during discovery.").

         Whether a professional service has, or has not, been rendered is a fact-intensive analysis. See, e.g., Aerothrust Corp. v. Granada Ins. Co., 904 So.2d 470, 472 (Fla. 3d DCA 2005) (explaining that "the services which are meant to be excluded as professional are those which require specialized training" and reciting the facts it relied upon to come to the conclusion that the professional services policy exclusion did not apply). Thus, when deciding whether an act arises out of the rendering of or failure to render a professional service, the court must focus on the act itself and not the character of the individual performing the act. See Estate of Tinervin v. Nationwide Mut. Ins. Co., 23 So.3d 1232, 1237 (Fla. 4th DCA 2009) (citing Lindheimer v. St. Paul Fire & Marine Ins. Co., 643 So.2d 636, 638 (Fla. 3d DCA 1994)). The act from which the claim arises must be related to a professional service that requires the use of professional judgment or skill. Cf. Nat'l Deaf Acad., LLC v. Townes, 242 So.3d 303, 305 (Fla. 2018) (concluding that a "claim arises out of the 'rendering of, or the failure to render, medical care or services, '" when the act from which the claim arises is "directly related to medical care or services, which require the use of professional judgment or skill").

         Thus, at the summary judgment stage, in circumstances where there has not been thorough discovery to flesh out the relevant facts, the trial court is in a poor position to determine whether the facts alleged in the complaint are true or the legal theories unsound so as to make a decision on whether an insurer has a duty to indemnify under the policy. See Khatib, 153 So.3d at 947-48 (reversing the trial court's determination that an insurer had no duty to indemnify its insured based on the allegations against the insured in the complaint because such a determination was "premature" prior to trial); see also Diamond State, 172 F.Supp.3d at 1342 (acknowledging that "it may be appropriate in some instances to consider the duty to indemnify before resolution of the underlying case" but refusing to do so where too many factual issues remained regarding the applicability of an exclusion in the insurer's policy).

         Here, there appears to have been little discovery conducted. Only one deposition was before the trial court for its review-the deposition of a pharmacy technician, Joseph Stahel. Notably absent was the deposition testimony of Andrew, the individual who Ms. Lee alleged to have been the mastermind in a scheme leading to her alleged injuries. Also absent was any testimony from the pharmacists themselves. Furthermore, there was no bench trial on Nationwide's complaint for declaratory relief to present evidence as to whether the purported acts of the Pharmacy ...


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