NITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 21-61958-SINGHAL/VALLE
ANNETTE DAVIS,
Plaintiff,
v.
GREAT NORTHERN INSURANCE
COMPANY and FEDERAL INSURANCE
COMPANY,
Defendant.
___________________________________/
OPINION AND ORDER
THIS CAUSE is before the Court upon Plaintiff’s Motion for Judgment on the
Pleadings on Count I of the Amended Complaint based upon Defendant’s Breach of
Contract, filed on January 27, 2022 (the “Motion”) (DE [32]). Defendant (“Defendant” or
“Chubb”) filed a Response on March 1, 2022 (the “Response”) (DE [46]). Plaintiff filed a
Reply on March 8, 2022 (the “Reply”) (DE [51]). An In-Person Hearing on the Motion was
held on March 15, 2022. The Motion is now ripe for consideration.
I. BACKGROUND
This action involves an insurance coverage dispute related to injuries Plaintiff
allegedly suffered from exposure to toxic mold in her home. Plaintiff owned and resided
in The Tides at Bridgeside Square Condominium (the “Tides”). See Am. Compl. ¶ 4 (DE
[23]). Plaintiff sued Akam On-Site, Inc. (“Akam”), the property manager of Tides, and
several other entities alleging negligent property management services in connection with
annual maintenance work on a water-cooling tower at the Tides (DE [25], at 10). The
botched maintenance work is alleged to have allowed water to infiltrate the condominium,
causing a rampant mold infestation. Id. Under Akam’s property management contract,
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Tides designated Akam as a “named insured” under its liability policies (DE [1-8], at 267).
At issue are two separate liability policies of Tides. The first policy, by AmTrust
International Underwriters (“AmTrust”), insured Tides under a primary commercial
general liability policy (DE [46]), at 2. The AmTrust Policy contains an “Organic Pathogen
Exclusion,” which excludes bodily injury, “which would not have occurred . . . but for . . .
exposure to . . . any . . . ‘[o]rganic pathogen,’” which includes “any type of mold . . . .” See
Am. Compl. ¶ 34.
The second policy, by Great Northern Insurance Company (“Great Northern”) and
Federal Insurance Company (“Federal) (together the “Chubb Insurers” and “Chubb
Policies”), insured Tides under primary insurance policies issued by Great Northern and
excess and umbrella policies issued by Federal. See Am. Compl. ¶¶ 1, 35 (DE [23]).
Based on the AmTrust and Chubb policies’ respective “other insurance” provisions, the
Chubb policies were afforded excess priority to the primary AmTrust policies (DE [25], at
8). Chubb advised Akam of the priority of coverages and agreed to handle the matter
under a reservation of rights. Id. at 7. Akam did not dispute this reservation for nearly two
years. Id. at 9.
Plaintiff filed a negligence lawsuit against Akam and other defendants in state court
(“the Underlying Lawsuit”) (DE [32], at 2). On December 10, 2020, as trial was
approaching, Chubb advised Akam it was electing its right to associate in skilled trial
counsel to help defend Akam (DE [25], at 11). However, Akam objected to Chubb’s
attempt to associate counsel. Id. Plaintiff, Akam, and Tides subsequently entered into a
settlement of the Underlying Lawsuit (the “Coblentz Agreement”) (DE [48-2]). The
Coblentz Agreement included a payment in the sum of $250,000 to be made to Plaintiff,
which included $100,000 to be paid directly from Akam and $150,000 to be paid by
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AmTrust on Akam’s behalf. Id. at 7. Curiously, AmTrust was not a party to the Coblentz
Agreement. Id. at 1. Second, the Coblentz Agreement assigned to Plaintiff all of Akam’s
claims against the Chubb Insurers arising out of their alleged denial of coverage for, and
alleged refusal to defend Akam against, Plaintiff’s negligence claims in the Underlying
Lawsuit. Id. at 7. Third, the Coblentz Agreement included a consent judgment in favor of
Plaintiff for $14.5 million and specified that “Davis’ right to seek satisfaction of the Consent
Judgment [was] solely against [the Chubb Insurers] and the [Chubb Policies].” Id. at 8.
Plaintiff now moves for Judgment on the Pleadings on Count I of the Amended Complaint.
II. LEGAL STANDARD
Pursuant to Federal Rule of Civil Procedure 12(c), after the pleadings are closed,
a party may move for judgment on the pleadings if no material facts remain at issue and
the parties’ dispute can be resolved on the pleadings and those facts of which the court
can take judicial notice. See Fed. R. Civ. P. 12(c); Hawthorne v. Mac Adjustment, Inc.,
140 F.3d 1367, 1370 (11th Cir. 1998). “In determining whether a party is entitled to
judgment on the pleadings, we accept as true all material facts alleged in the non-moving
party's pleading, and we view those facts in the light most favorable to the non-moving
party.” Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014). “If a comparison
of the averments in the competing pleadings reveals a material dispute of fact, judgment
on the pleadings must be denied.” Id.
III. DISCUSSION
Plaintiff focuses her argument on whether the AmTrust primary policy provided
coverage for her claim, and specifically, whether the Organic Pathogen exclusion applied.
See Motion, at 9–11. According to Plaintiff, the Organic Pathogen exclusion did apply and
thereby released AmTrust from its duty to defend and indemnify Akam. Id. This, in turn,
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activated the Chubb Policies, requiring that the Chubb Insurers provide a defense and
indemnity to Akam Id. However, the Chubb Insurers allege in their answer, affirmative
defenses, and counterclaim, that AmTrust did in fact defend and indemnify Akam. See
(DE [25], at 1–9). Six of Chubb’s denials specifically relate to Plaintiff’s allegations
regarding coverage under the AmTrust policy and whether the Organic Pathogen
exclusion applied. See (DE [25] ¶¶ 32–34, 37, 41, 44). Moreover, Chubb alleges several
affirmative defenses providing factual information concerning AmTrust’s primary
coverage. See (DE [25], at 7–8). Specifically, Chubb alleges it had no duty to defend and
indemnify Akam because the AmTrust policies are primary to the Chubb Policies, and
AmTrust was in fact fully defending and indemnifying Akam. See Response, at 7.
Moreover, Chubb alleges that it, at no time, denied its duty to defend or the possibility of
coverage. Id. Chubb further states it handled the Underlying Lawsuit under a complete
reservation of rights, which was accepted by Akam. Id.
In considering the Motion, the Court must not only accept the nonmovant Chubb’s
allegations as true but must also view those allegations in the light most favorable to
Chubb. See Perez, 774 F.3d at 1335. And if a comparison in the pleadings reveals a
material dispute of fact, judgment must be denied. Id. Here, the pleadings directly butt
heads on whether AmTrust did in fact defend Akam. Plaintiff argues that, even though
AmTrust contributed funds to Plaintiff on Akam’s behalf in connection with settling the
Underlying Action, as indicated in the Coblentz Agreement, this did not constitute a
defense of Akam, but rather a voluntary payment to settle the matter. In Plaintiff’s view,
AmTrust’s policy did not provide coverage because of the Organic Pathogen exclusion.
Defendant argues the fact that AmTrust contributed funds to Plaintiff on Akam’s behalf in
connection with settling the Underlying Action, as indicated in the Coblentz Agreement,
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necessarily means that AmTrust did in fact defend Akam and impliedly waive the Organic
Pathogen exclusion. Defendant further alleges that AmTrust fully defended Akam and
assumed the primary responsibility for the Underlying Action. See (DE [48-1], at 9–10).
Viewed in the light most favorable to Chubb, and accepting all of Chubb’s allegations as
true, the Court finds AmTrust defended Akam by contributing funds to Plaintiff on Akam’s
behalf in connection with settling the Underlying Action, as indicated in the Coblentz
Agreement. And in doing so, AmTrust necessarily waived the Organic Pathogen
exclusion. Accordingly, it is hereby
ORDERED AND ADJUDGED that Plaintiff’s Motion for Judgment on the Pleadings
on Count I of the Amended Complaint based upon Defendant’s Breach of Contract (DE
[32]) is DENIED.
DONE AND ORDERED in Chambers, Fort Lauderdale, Florida, this 16th day of
March 2022