120 lines
8.3 KiB
Plaintext
120 lines
8.3 KiB
Plaintext
NITED STATES DISTRICT COURT
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SOUTHERN DISTRICT OF FLORIDA
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CASE NO. 21-61958-SINGHAL/VALLE
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ANNETTE DAVIS,
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Plaintiff,
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v.
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GREAT NORTHERN INSURANCE
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COMPANY and FEDERAL INSURANCE
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COMPANY,
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Defendant.
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___________________________________/
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OPINION AND ORDER
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THIS CAUSE is before the Court upon Plaintiff’s Motion for Judgment on the
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Pleadings on Count I of the Amended Complaint based upon Defendant’s Breach of
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Contract, filed on January 27, 2022 (the “Motion”) (DE [32]). Defendant (“Defendant” or
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“Chubb”) filed a Response on March 1, 2022 (the “Response”) (DE [46]). Plaintiff filed a
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Reply on March 8, 2022 (the “Reply”) (DE [51]). An In-Person Hearing on the Motion was
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held on March 15, 2022. The Motion is now ripe for consideration.
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I. BACKGROUND
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This action involves an insurance coverage dispute related to injuries Plaintiff
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allegedly suffered from exposure to toxic mold in her home. Plaintiff owned and resided
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in The Tides at Bridgeside Square Condominium (the “Tides”). See Am. Compl. ¶ 4 (DE
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[23]). Plaintiff sued Akam On-Site, Inc. (“Akam”), the property manager of Tides, and
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several other entities alleging negligent property management services in connection with
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annual maintenance work on a water-cooling tower at the Tides (DE [25], at 10). The
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botched maintenance work is alleged to have allowed water to infiltrate the condominium,
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causing a rampant mold infestation. Id. Under Akam’s property management contract,
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Case 0:21-cv-61958-AHS Document 60 Entered on FLSD Docket 03/16/2022 Page 1 of 5
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2
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Tides designated Akam as a “named insured” under its liability policies (DE [1-8], at 267).
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At issue are two separate liability policies of Tides. The first policy, by AmTrust
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International Underwriters (“AmTrust”), insured Tides under a primary commercial
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general liability policy (DE [46]), at 2. The AmTrust Policy contains an “Organic Pathogen
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Exclusion,” which excludes bodily injury, “which would not have occurred . . . but for . . .
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exposure to . . . any . . . ‘[o]rganic pathogen,’” which includes “any type of mold . . . .” See
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Am. Compl. ¶ 34.
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The second policy, by Great Northern Insurance Company (“Great Northern”) and
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Federal Insurance Company (“Federal) (together the “Chubb Insurers” and “Chubb
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Policies”), insured Tides under primary insurance policies issued by Great Northern and
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excess and umbrella policies issued by Federal. See Am. Compl. ¶¶ 1, 35 (DE [23]).
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Based on the AmTrust and Chubb policies’ respective “other insurance” provisions, the
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Chubb policies were afforded excess priority to the primary AmTrust policies (DE [25], at
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8). Chubb advised Akam of the priority of coverages and agreed to handle the matter
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under a reservation of rights. Id. at 7. Akam did not dispute this reservation for nearly two
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years. Id. at 9.
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Plaintiff filed a negligence lawsuit against Akam and other defendants in state court
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(“the Underlying Lawsuit”) (DE [32], at 2). On December 10, 2020, as trial was
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approaching, Chubb advised Akam it was electing its right to associate in skilled trial
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counsel to help defend Akam (DE [25], at 11). However, Akam objected to Chubb’s
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attempt to associate counsel. Id. Plaintiff, Akam, and Tides subsequently entered into a
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settlement of the Underlying Lawsuit (the “Coblentz Agreement”) (DE [48-2]). The
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Coblentz Agreement included a payment in the sum of $250,000 to be made to Plaintiff,
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which included $100,000 to be paid directly from Akam and $150,000 to be paid by
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Case 0:21-cv-61958-AHS Document 60 Entered on FLSD Docket 03/16/2022 Page 2 of 5
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AmTrust on Akam’s behalf. Id. at 7. Curiously, AmTrust was not a party to the Coblentz
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Agreement. Id. at 1. Second, the Coblentz Agreement assigned to Plaintiff all of Akam’s
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claims against the Chubb Insurers arising out of their alleged denial of coverage for, and
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alleged refusal to defend Akam against, Plaintiff’s negligence claims in the Underlying
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Lawsuit. Id. at 7. Third, the Coblentz Agreement included a consent judgment in favor of
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Plaintiff for $14.5 million and specified that “Davis’ right to seek satisfaction of the Consent
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Judgment [was] solely against [the Chubb Insurers] and the [Chubb Policies].” Id. at 8.
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Plaintiff now moves for Judgment on the Pleadings on Count I of the Amended Complaint.
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II. LEGAL STANDARD
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Pursuant to Federal Rule of Civil Procedure 12(c), after the pleadings are closed,
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a party may move for judgment on the pleadings if no material facts remain at issue and
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the parties’ dispute can be resolved on the pleadings and those facts of which the court
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can take judicial notice. See Fed. R. Civ. P. 12(c); Hawthorne v. Mac Adjustment, Inc.,
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140 F.3d 1367, 1370 (11th Cir. 1998). “In determining whether a party is entitled to
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judgment on the pleadings, we accept as true all material facts alleged in the non-moving
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party's pleading, and we view those facts in the light most favorable to the non-moving
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party.” Perez v. Wells Fargo N.A., 774 F.3d 1329, 1335 (11th Cir. 2014). “If a comparison
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of the averments in the competing pleadings reveals a material dispute of fact, judgment
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on the pleadings must be denied.” Id.
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III. DISCUSSION
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Plaintiff focuses her argument on whether the AmTrust primary policy provided
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coverage for her claim, and specifically, whether the Organic Pathogen exclusion applied.
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See Motion, at 9–11. According to Plaintiff, the Organic Pathogen exclusion did apply and
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thereby released AmTrust from its duty to defend and indemnify Akam. Id. This, in turn,
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Case 0:21-cv-61958-AHS Document 60 Entered on FLSD Docket 03/16/2022 Page 3 of 5
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activated the Chubb Policies, requiring that the Chubb Insurers provide a defense and
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indemnity to Akam Id. However, the Chubb Insurers allege in their answer, affirmative
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defenses, and counterclaim, that AmTrust did in fact defend and indemnify Akam. See
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(DE [25], at 1–9). Six of Chubb’s denials specifically relate to Plaintiff’s allegations
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regarding coverage under the AmTrust policy and whether the Organic Pathogen
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exclusion applied. See (DE [25] ¶¶ 32–34, 37, 41, 44). Moreover, Chubb alleges several
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affirmative defenses providing factual information concerning AmTrust’s primary
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coverage. See (DE [25], at 7–8). Specifically, Chubb alleges it had no duty to defend and
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indemnify Akam because the AmTrust policies are primary to the Chubb Policies, and
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AmTrust was in fact fully defending and indemnifying Akam. See Response, at 7.
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Moreover, Chubb alleges that it, at no time, denied its duty to defend or the possibility of
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coverage. Id. Chubb further states it handled the Underlying Lawsuit under a complete
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reservation of rights, which was accepted by Akam. Id.
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In considering the Motion, the Court must not only accept the nonmovant Chubb’s
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allegations as true but must also view those allegations in the light most favorable to
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Chubb. See Perez, 774 F.3d at 1335. And if a comparison in the pleadings reveals a
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material dispute of fact, judgment must be denied. Id. Here, the pleadings directly butt
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heads on whether AmTrust did in fact defend Akam. Plaintiff argues that, even though
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AmTrust contributed funds to Plaintiff on Akam’s behalf in connection with settling the
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Underlying Action, as indicated in the Coblentz Agreement, this did not constitute a
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defense of Akam, but rather a voluntary payment to settle the matter. In Plaintiff’s view,
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AmTrust’s policy did not provide coverage because of the Organic Pathogen exclusion.
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Defendant argues the fact that AmTrust contributed funds to Plaintiff on Akam’s behalf in
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connection with settling the Underlying Action, as indicated in the Coblentz Agreement,
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Case 0:21-cv-61958-AHS Document 60 Entered on FLSD Docket 03/16/2022 Page 4 of 5
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necessarily means that AmTrust did in fact defend Akam and impliedly waive the Organic
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Pathogen exclusion. Defendant further alleges that AmTrust fully defended Akam and
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assumed the primary responsibility for the Underlying Action. See (DE [48-1], at 9–10).
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Viewed in the light most favorable to Chubb, and accepting all of Chubb’s allegations as
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true, the Court finds AmTrust defended Akam by contributing funds to Plaintiff on Akam’s
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behalf in connection with settling the Underlying Action, as indicated in the Coblentz
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Agreement. And in doing so, AmTrust necessarily waived the Organic Pathogen
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exclusion. Accordingly, it is hereby
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ORDERED AND ADJUDGED that Plaintiff’s Motion for Judgment on the Pleadings
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on Count I of the Amended Complaint based upon Defendant’s Breach of Contract (DE
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[32]) is DENIED.
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DONE AND ORDERED in Chambers, Fort Lauderdale, Florida, this 16th day of
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March 2022 |