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Alamo-Cruz v. Evanston Insurance Co.

United States District Court, S.D. Florida

August 2, 2019

EFRAIN ALAMO-CRUZ and MARIA ALAMO-CRUZ, as assignees of ROBIN A. CROCE, Plaintiffs,
v.
EVANSTON INSURANCE COMPANY F/K/A ALTERRA EXCESS & SURPLUS INSURANCE COMPANY, Defendant.

          ORDER ON DEFENDANT'S MOTION FOR LEAVE TO AMEND ITS AFFIRMATIVE DEFENSES

          EDWIN G. TORRES UNITED STATES MAGISTRATE JUDGE.

         This matter is before the Court on Evanston Insurance Company F/K/A Alterra Excess & Surplus Insurance Company's (“Defendant”) motion for leave to amend its affirmative defenses to Efrain Alamo-Cruz's (“Mr. Cruz”) and Maria Alamo-Cruz's (“Mrs. Cruz”) (collectively, “Plaintiffs”) second amended complaint. [D.E. 87]. Plaintiffs responded to Defendant's motion on July 15, 2019 [D.E. 98] to which Defendant replied on July 22, 2019. [D.E. 103]. Therefore, Defendant's motion is now ripe for disposition. After careful consideration of the motion, response, reply, relevant authority, and for the reasons discussed below, Defendant's motion is GRANTED.

         I. BACKGROUND

         Plaintiffs filed this action on April 5, 2017 [D.E. 1] seeking declaratory relief in count 1, breach of contract in count 2, and common law bad faith in count 3 because of Defendant's denial of insurance coverage for the claims Plaintiffs asserted in a state court action against Affordable Treemen, Inc. (“Affordable Treemen”), and its president Robin A. Croce (“Ms. Croce”). This action relates back to an incident that occurred on June 1, 2011 when Mr. Cruz was performing tree trimming services for Affordable Treemen. On that date, an electric saw came loose and/or malfunctioned, cutting Mr. Cruz's harness and causing him to fall 30 feet to the ground. [D.E. 20-1]. Mr. Cruz suffered severe and permanent injuries as a result of the fall.

         Plaintiffs' accident was reported to Defendant which denied insurance coverage for Mr. Cruz's claim against Affordable Treemen on August 29, 2012 on the basis that the applicable insurance policy (the “Policy”) excludes any recovery for independent contractors:

This insurance does not apply to ‘bodily injury', ‘personal and advertising injury', or ‘medical payments' to any independent contractor, subcontractor, casual laborer or volunteer worker, or to any employee of any independent contractor, subcontractor, while performing work for you.

[D.E. 20-2] (the “Independent Contractors Exclusion”).

         The Policy was issued to Affordable Treemen for the period of May 11, 2011 through May 11, 2012 and has an aggregate limit of liability of $1, 000, 000. [D.E. 20-2]. Section I of the Policy provides, in relevant part, the following:

         Insuring Agreement

a. 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. However, we will have no duty to defend the insured against any ‘suit' seeking damages for ‘bodily injury' or ‘property damage' to which this insurance does not apply . . . .

Id. Section II of the Policy, under the section entitled “Who Is An Insured?” states, in pertinent part, that “[i]f you are designated in the Declarations as . . . [a]n organization other than a partnership, joint venture or limited liability company, you are an insured. Your ‘Executive officers' and directors are insureds, but only with respect to their duties as your officers or directors.” Id.

         After Evanston denied insurance coverage, Plaintiffs filed suit against Affordable Treemen, but that action was later dismissed without prejudice following a notice of dismissal that Plaintiffs filed on February 24, 2014. On December 8, 2014, Plaintiffs sent a settlement demand to Evanston requesting $1 million dollars to settle the claims against Ms. Croce and Affordable Treemen. Evanston denied Plaintiffs' demand on December 24, 2014 and disclaimed coverage under the Independent Contractors Exclusion.

         Thereafter, Plaintiffs filed suit against Affordable Treemen and Ms. Croce on January 20, 2015 in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. [D.E. 20-1]. The state complaint included claims for negligence against Affordable Treemen in Count 1 and negligence against Ms. Croce in Count 2. Plaintiffs alleged that Ms. Croce was the President of Affordable Treeman and that she breached her duties and responsibilities owed to Mr. Cruz.

         The state complaint also alleged that Mr. Cruz's relationship with Affordable Treemen was that of an independent contractor. [D.E. 20-1] (“Mr. Alamo-Cruz's relationship with [Affordable Treemen] was that of an independent contractor.”). Evanston refused to defend either ...


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