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Diamond State Insurance Company v. Florida Department of Children And Families

Florida Court of Appeals, Third District

October 30, 2019

Diamond State Insurance Company, Appellant,
v.
The Florida Department of Children and Families, Appellee.

         Not final until disposition of timely filed motion for rehearing.

          An Appeal from the Circuit Court for Miami-Dade County Lower Tribunal No. 15-16651, Maria De Jesus Santovenia, Judge.

          Banker Lopez Gassler, P.A., and Ezequiel Lugo, and Chris W. Altenbernd (Tampa), for appellant.

          The Law Offices of Anthony & Associates, P.A., and Andrew J. Anthony and Bradley A. Silverman, for appellee.

          Before SALTER, LOGUE, and SCALES, JJ.

          LOGUE, J.

         The insurer, Diamond State Insurance Company, seeks review of the declaratory judgment finding that it owes a duty to defend The Florida Department of Children and Families (DCF). We reverse.

         Background

         In 2000, the State of Florida privatized the provision of foster care and related services. § 409.1671 (1)(a), Fla. Stat. (2000). With the privatization of foster care, DCF was able to contract for the provision of child protective services with private corporations deemed to be "eligible lead community-based provider[s]." § 409.1671 (1)(b), Fla. Stat. (2000). DCF contracted with Our Kids of Miami-Dade/Monroe, Inc. for the provision of foster care services in Miami-Dade County. By law, Our Kids was required to maintain insurance coverage under section 409.1671 (1)(f), and did so by purchasing a "claims made and reported" professional liability policy from the insurer. The policy contained an endorsement which provided coverage for DCF, except where DCF was sued for its own negligence. The policy had a limit of $1, 000, 000 per claim and $3, 000, 000 in the aggregate and was in effect for the period of 2010-2011.

         Two minors in the care of Our Kids sued it for allowing abuse. The lawsuits were eventually settled for a combined amount of $2, 990, 000. After settling with Our Kids, the minors filed lawsuits against DCF. The complaints against DCF alleged that "DCF contracted with Our Kids of Miami-Dade/Monroe, Inc. . . . as the lead agency provider of foster care and related services in Miami-Dade County." The complaints further alleged that the minors suffered damages "[a]s a direct and proximate result of the negligence of Defendant DCF, through its employees, agents, and servants," and that "the minors suffered years of abuse and neglect resulting in permanent and continuing damages."

         DCF demanded the insurer defend the lawsuits, but the insurer refused, citing a provision in the policy which specifies that the insurer's "right and duty to defend ends when [it has] used up the applicable limit of insurance in the payment of judgments and settlements." Because the insurer refused to defend the lawsuit, DCF sued for a declaratory judgment that the insurer had a duty to defend. The insurer answered and raised the affirmative defense that "[c]overage was extinguished through settlement of other claims prior to claims being made against DCF. The policy's aggregate limits are exhausted and [the insurer] has no further duties."

         DCF moved for partial summary judgment on the duty to defend, asserting that (1) the duty to defend is determined by looking only to the pleadings, which made no reference to policy limits; and (2) in any event, the insurer could not establish that its policy limits had been exhausted. In response to the motion for summary judgment, the insurer filed the affidavit of its senior claims examiner which stated the policy limits had been exhausted, thereby ending any duty to defend. In argument, DCF maintained that the affidavit lacked credibility because the insurer admitted in discovery that it lacked some of the documentation normally associated with such a payment of the policy limits; the insurer had promised to provide the missing documents but failed to do so; and the insurer had a history of making false statements. The trial court ultimately ruled in favor of DCF and granted partial summary judgment. Upon DCF's motion, the trial court subsequently entered a final declaratory judgment finding that the insurer owed DCF a duty to defend. This appeal followed.

         Standard of Review

         We review "a trial court's ruling on a motion for summary judgment de novo." Cascar, LLC v. City of Coral Gables, 274 So.3d 1231, 1233 (Fla. 3d DCA 2019). "Summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law." Id. at 1234 (quoting Volusia Cnty. v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126, 130 (Fla. 2000)). "Summary judgment 'is designed to test the sufficiency of the evidence to determine if there is sufficient evidence at issue to justify a trial or formal hearing on the ...


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