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Southern-Owners Insurance Co. v. Custom Climate Concepts, Inc.

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

September 10, 2019

SOUTHERN-OWNERS INSURANCE COMPANY, Plaintiff,
v.
CUSTOM CLIMATE CONCEPTS, INC., et al. Defendants.

          ORDER

          ELIZABETH A. KOVACHEVICH JUDGE

         This is an insurance coverage dispute. Plaintiff Southern-Owners Insurance Company ("Southern") seeks a declaration from the Court that it owes no duty to defend or indemnify its insured, Defendant Custom Climate Concepts, Inc. ("Custom"), and Custom's former employee, Defendant Larry Busbee ("Busbee"),[1] in a wrongful death lawsuit currently pending in Manatee County, Florida (the "Underlying Action"). (Doc. 1). Custom counterclaims for a contrary declaration; that is, that Southern must defend and indemnify Custom in the Underlying Action. (Doc. 14). The parties cross-move for summary judgment. (Docs. 36, 37). The underlying, material facts are undisputed, and the only issues the Court must decide are issues of law. Upon careful consideration of the pleadings, the parties' briefs, other relevant portions of the file, and binding precedent, the Court will grant Southern's motion, deny Custom's motion, and direct the entry of final judgment in favor of Southern.

         I. Background

         Custom provides heating, ventilation, and air conditioning services. Busbee was previously employed by Custom.

         In September of 2013, Custom purchased a 2010 Silverado truck for use in its business. The truck was registered in the name of Custom's owner and general manager, Rodney Rupert. The truck was insured under a $1, 000, 000 business automobile insurance policy issued to Custom by Philadelphia Indemnity Insurance Company (the "Philadelphia Policy").

         Custom was also the named insured under a $1, 000, 000 commercial general liability insurance policy issued by Southern (the "CGL Policy"). The CGL Policy generally excluded coverage for bodily injury or property damage arising out of the ownership, maintenance, use, or entrustment to others of any automobile. The CGL Policy provided for a limited exception, however, in the form of a "hired auto and non-owned auto liability" endorsement. Pursuant to the endorsement, Southern would "pay those sums that" Custom became "legally obligated to pay as damages because of 'bodily injury' or 'property damage' arising out of the maintenance or use of an automobile that was used in Custom's business, but that Custom didn't own and that wasn't registered in Custom's name, or that wasn't leased or rented to Custom for more than ninety consecutive days. But, importantly, the endorsement included an exclusion clause, which explained that the endorsement would provide such coverage only if Custom didn't have "any other insurance" available to it that afforded "the same or similar coverage."

         On June 27, 2016, Busbee, as part of his duties for Custom, was driving the 2010 Silverado to get it washed when he collided head-on with another vehicle being driven by Chastity Monhollon. Chastity Monhollon was critically injured in the accident and later died. Defendant John Monhollon ("Monhollon"), as personal representative of the estate of Chastity Monhollon, subsequently filed the Underlying Action against Custom and Busbee on September 14, 2016.

         As a result of the Underlying Action, Philadelphia Indemnity, on behalf of Custom and Busbee, tendered its $1, 000, 000 policy limits to Monhollon under the Philadelphia Policy. Additionally, Busbee was the named insured under a $300, 000 per-incident personal automobile insurance policy with Progressive Casualty Insurance Company, which tendered $200, 000 to Monhollon.[2] Southern, however, filed the instant declaratory judgment action against Custom, Busbee, and Monhollon[3]on September 28, 2017, alleging that the CGL Policy doesn't provide coverage for the June 27, 2016 automobile accident, and seeking a declaration that Sothern isn't obligated to defend or indemnify Custom or Busbee in the Underlying Action.

         Custom responded on October 27, 2017, by filing a counterclaim against Southern, alleging that the CGL Policy does provide coverage for the June 27, 2016 automobile accident, and seeking a declaration that Southern does have an obligation to defend and indemnify Custom in the Underlying Action.

         Now, cross motions for summary judgment pend on the issue of whether the CGL policy provides coverage to Custom for Monhollon's claim.[4] The parties dispute the applicability of the exclusion clause in the CGL Policy's "hired auto and non-owned auto liability" endorsement. Southern argues that the endorsement excepts coverage for Monhollon's claim because the Philadelphia Policy affords the "same or similar coverage" for the June 27, 2016 automobile accident, and Philadelphia Indemnity tendered policy limits to Monhollon. Custom counters that the terms "same or similar coverage" are ambiguous and must therefore be construed in its favor as the insured. And, so construed, Custom argues that the CGL and Philadelphia Policies aren't the "same or similar" but, instead, are materially different in both risk and scope, thereby obviating the applicability of the exclusion clause in the endorsement and affording coverage to Custom under the CGL Policy for the June 27, 2016 automobile accident.

         Thus, the parties' dispute turns on the meaning of the exclusion clause's "same or similar coverage'' language. If the coverage afforded to Custom under the CGL Policy is the same as or similar to the coverage afforded to Custom under the Philadelphia Policy, the exclusion clause applies, and the CGL Policy doesn't afford coverage to Custom for Monhollon's claims. If, on the other hand, the coverage afforded under each policy is not the same or similar, the exclusion clause doesn't apply, and the CGL Policy covers Custom's liability in the Underlying Action.

         II. Discussion [5]

         "[A]n exclusion clause denying coverage in the event the insured has available 'any other insurance with the same or similar coverage' applies when the insured has another insurance policy paying policy limits for the underlying liability." S.-Owners Ins. Co. v. Easdon Rhodes & Assocs. LLC. 872 F.3d 1161, 1170 (11th Cir. 2017) (applying Florida law). See also, e.g., Auto-Owners Ins. Co. v. Habbert No. 5:09-cv-64-WTH-KRS, 2010 WL 3788149, at *5 (M.D. Fla. Sept. 24, 2010) (Hodges, J.) (applying Florida law and determining that damages stemming from an automobile accident involving a construction company's employee were not covered under a commercial general liability policy's hired/non-owned automobile liability endorsement because the employee and the vehicle he was driving were insured under a separate personal automobile policy with another insurer, which paid policy limits to the plaintiff in the underlying action).

         In Easdon, the Eleventh Circuit evaluated a hired/non-owned automobile liability endorsement in a commercial general liability policy issued by Southern to a construction company. 872 F.3d at 1163. The endorsement at issue in Easdon was, in all relevant respects, nearly identical to the endorsement at issue here. And like the endorsement at issue here, the endorsement at issue in Easdon contained an exclusion clause that excepted coverage for bodily injury and property damage stemming from an automobile accident where the company had any other insurance available to it that afforded the "same or similar coverage." Id. After one of the company's managing members was involved in an automobile accident with a motorcyclist, Southern sought a declaration from the district court that the accident wasn't covered under the endorsement. Id. Southern argued, inter alia, that because the company's vehicle was insured under a "similar" personal automobile policy issued by Nationwide Mutual Insurance Company, which had already ...


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