26 Fla. L. Weekly D229aNOT FINAL VERSION OF OPINION
Subsequent Changes at 27 Fla. L. Weekly D513c

Insurance — General liability — Coverage — Spoliation of evidence claim — Where insured’s employee was injured when a ladder collapsed, and employee brought product liability action against manufacturer and seller of ladder, and action against insured for spoliation of evidence which was crucial to product liability action, insured’s general liability policy did not provide coverage for spoliation of evidence claim — Spoliation claim was not covered under policy provision providing coverage for bodily injuries because there was no causal relation between the bodily injuries suffered and destruction of the evidence — Spoliation claim was not covered under policy provision providing coverage for property damage because plaintiff’s only interest in destroyed property was an intangible interest which was excluded from coverage — Error to enter summary judgment finding that insurer had duty to defend and indemnify spoliation of evidence claim

LINCOLN INSURANCE COMPANY, Appellant, v. HOME EMERGENCY SERVICES, INC., KELLER LADDERS, INC., ALBERT MILIAN, ROSE MILIAN, HOME DEPOT USA, INC., and PCA SOLUTIONS, INC., Appellees. 3rd District. Case No. 3D99-1806. L.T. Case No. 98-14677. Opinion filed January 17, 2001. An Appeal from the Circuit Court for Dade County, Murray Goldman, Judge. Counsel: George, Hartz, Lundeen & Fulmer and Esther E. Galicia (Ft. Lauderdale), for appellant. Langbein & Langbein and Evan J. Langbein (Aventura); Kenneth E. Cohen, for appellees.

(Before SCHWARTZ, C.J., and LEVY and GREEN, JJ.)

(PER CURIAM.) This is an appeal from a Summary Final Judgment entered against Lincoln Insurance Company (“Lincoln”) on the basis that the general liability policy issued to Home Emergency Services, Inc. (HES) provides coverage for, and the duty to defend and indemnify, a spoliation of evidence claim which was filed against HES.

Lincoln issued a general liability policy to HES that provides coverage for any “bodily injury” or “property damage” liability which HES becomes legally obligated to pay. Albert Milian (“Milian”), a HES employee during the coverage period in question, was injured when a ladder (manufactured by Keller Ladders, Inc. and purchased by HES at Home Depot USA) collapsed causing him to fall. Milian collected workers’ compensation benefits for his injuries and later filed a products liability action against Keller Ladders and Home Depot, the manufacturer and distributor of the ladder, for his injuries. In his Complaint, Milian also claimed damages against HES for spoliation of evidence. The Complaint sets out a claim for Spoliation of Evidence and for Statutory Violations under section 440.39(7), which requires employers to aid the plaintiff in all third party actions undertaken by the plaintiff for injuries sustained while employed. Specifically, Milian alleged that HES entered into an agreement with Milian’s counsel to maintain the ladder in its possession during the pendency of the proceedings and that HES negligently or intentionally destroyed or abandoned said evidence.

Lincoln filed this declaratory action to determine its duties and responsibilities for the claims alleged against HES. Subsequently, Lincoln moved for Final Summary Judgment alleging that Milian’s spoliation of evidence claims against HES were not covered under the policy and, therefore, Lincoln was not obligated to defend the claims against HES. HES responded with its own Motion for Summary Judgment alleging that Lincoln had a duty to defend on the spoliation claims. The trial court denied Lincoln’s Motion for Summary Judgment and granted HES’ cross-motion finding that the policy covered the Milian’s claims against HES. We reverse, concluding that the policy does not provide coverage for the spoliation claims.

A claim for spoliation of evidence has been recognized in Florida jurisprudence as an independent cause of action for negligence where a party is unable to prove their case due to the loss or destruction of key evidence. See Bondu v. Gurvich, 473 So. 2d 1307 (Fla. 3d DCA 1984); see also Miller v. Allstate Ins. Co., 573 So. 2d 24 (Fla. 3d DCA 1990). Because of the nature of the claim, liability for spoliation does not arise until the underlying action is completed. See Continental Ins. Co. v. Herman, 576 So. 2d 313 (Fla. 3d DCA 1990). A spoliation claim, therefore, compensates the plaintiff for the loss of recovery in the underlying case due to the plaintiff’s inability to prove the case because of the lost or destroyed evidence and not for the “bodily injury” or “property damages” actually sustained. The Fourth District Court of Appeal has described the basis of a cause of action for spoliation of evidence as “an intangible and beneficial interest in the preservation of the evidence.” DiGuilio v. Prudential Prop. & Cas. Co., 710 So. 2d 3 (Fla. 4th DCA 1998) (emphasis supplied).

Milian’s Complaint seeks damages from the manufacturer and distributor of the ladder for “bodily injuries” sustained when he fell from the ladder. Alternatively, Milian claims that any inability to prove the underlying products liability claim is due to HES’ negligence in destroying or losing crucial evidence. In essence, the damages sought against HES stem from the “bodily injury” suffered in the underlying claim but which Milian is unable to prove because of the lost or destroyed evidence. The claims raised against HES, therefore, seek damages for injuries on the theory that HES damaged Milian’s ability to fully recover his damages in the underlying products liability claim against the manufacturer and distributor of the ladder. In considering whether a party has a duty to defend an underlying suit, the trial court is limited to reviewing the allegations raised by the underlying Complaint and the pertinent contract or policy between the parties. See McCreary v. Florida Residential Prop. & Cas. Joint Underwriting Ass’n, 758 So. 2d 692 (Fla. 4th DCA 1999). We recognize that the duty to defend and the duty to indemnify are distinct and that the analysis is different, however, for purposes of our analysis here the concern is with whether a spoliation claim is one covered under the general liability policy and not so much with the distinction between the two duties. If the spoliation claim is not covered under the policy, there can obviously be no duty to defend.

Lincoln’s policy provides that the insurer “will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury’ or `property damage’ to which th[e] insurance applies.” The policy defines “bodily injury” as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” “Property damage” is defined as “[p]hysical injury to tangible property, including all resulting loss of use of that property.”

Recently in Norris v. Colony Ins. Co., 760 So. 2d 1010 (Fla. 4th DCA 2000), the Fourth District Court of Appeal considered a similar issue, under the terms of a comparable policy, and determined that a spoliation claim is not covered as “bodily injury” or “property damage” in a general liability contract. The Court explained that pursuant to the policy, “bodily injury” or “property damage” must be caused by an “occurrence”, or accident. The Court found that because there was no link between the “occurrence”, i.e., the destruction of evidence, and the “bodily injury”, the spoliation claim does not come within the coverage contemplated by the insurance contract. The Court then considered the issue of whether the destruction of the evidence caused “property damage” within the limits of the policy. The Court first noted a provision in the policy excluding damage to the insured’s own property. Then, looking to the definition of “property damage”, the Court held that there was no damage to tangible property and, therefore, there was no coverage for the spoliation claim.

Applying the Fourth District’s analysis to the instant case, we find that the spoliation claim is not covered under the policy. With regard to coverage for “bodily injuries”, we find that the causal relation between the “bodily injuries” sustained and the destruction of property is lacking, thereby precluding coverage for “bodily injuries” under the policy. With regard to coverage for damage to the destroyed evidence, we find that the only possible interest to the plaintiff is an intangible interest which is excluded from coverage. Consequently, there is also no coverage for “property damage”.

Accordingly, we reverse the Final Summary Judgment entered below and hold that the policy does not provide coverage for the damages sought against HES. The matter is remanded with instructions to enter Final Summary Judgment in favor of Lincoln consistent with our holding. Our decision today in no way limits HES’ responsibility to the plaintiff.

Reversed and remanded with instructions. (LEVY and GREEN, JJ., concur.)

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(SCHWARTZ, Chief Judge, dissenting.) The approach to policy interpretation taken by Norris and the majority in this case embodies the kind of pettifoggery and hairsplitting which would have undoubtedly delighted Miss Snow,¹ my seventh grade English teacher, who taught us how to rip sentences into unrecognizable (but diagrammable) shreds. It is, unfortunately, completely contrary to the way insurance contracts are supposed to be construed. Berkshire Life Ins. Co. v. Adelberg, 698 So. 2d 828, 830 (Fla. 1997) (“[The insured] was entitled to a clear explanation of terms rather than a fine distinction which was never written into his contract for insurance coverage.”)²; Stuyvesant Ins. Co. v. Butler, 314 So. 2d 567 (Fla. 1975); Firemans Fund Ins. Co. v. Boyd, 45 So. 2d 499 (Fla. 1950); Poole v. Travelers Ins. Co., 130 Fla. 806, 179 So. 138 (1937).

What is more, the opinions are wrong even on their own terms. Both are bottomed upon the conclusion that there is no coverage because the claim for bodily injury³ was not caused by “this occurrence, the destruction of evidence,” Norris, 760 So. 2d at 1012 [e.s.]; see majority slip opinion at 6 (“we find that the causal relation between the `bodily injuries’ sustained and the destruction of property is lacking, thereby precluding coverage for `bodily injuries’ under the policy”). Again unfortunately, that is not what the policy says. It actually provides that the bodily injury must be caused by “an occurrence,” defined as “an accident.”⁴ [e.s.] Because, even when policy interpretation is not involved, and all the more when it is, the term “an” or “a” means “any,” State v. Hershkowitz, 714 So. 2d 545 (Fla. 3d DCA 1998); Izadi v. Machado Ford, Inc., 550 So. 2d 1135, 1138 n.3 (Fla. 3d DCA 1989); United States Fidelity & Guaranty Co. v. State Farm Mut. Auto. Ins. Co., 369 So. 2d 410 (Fla. 3d DCA 1979), the “occurrence” or “accident” referred to must include the July 7, 1995 ladder collapse which injured the plaintiff, rather than only the destruction of the ladder which gave rise to the spoliation claim. To hold otherwise, as does the majority, is to violate directly what I had thought was another sacred canon of insurance law — that there must be no confusion between the basis of the underlying liability of the insured — here, as in Norris, the destruction of evidence — and the duty of the insurance company to defend and indemnify for any claims against the insured which fall within the policy. See Prudential Property & Cas. Ins. Co. v. Swindal, 622 So. 2d 467, 470 (Fla. 1993) (“Florida law has long followed the general rule that tort law principles do not control judicial construction of insurance contracts.”); Phoenix Ins. Co. v. Helton, 298 So. 2d 177 (Fla. 1st DCA 1974), cert. discharged, 330 So. 2d 724 (Fla. 1976); Cloud v. Shelby Mutual Ins. Co., 248 So. 2d 217 (Fla. 3d DCA 1971); see also Logozzo v. Kent Ins. Co., 464 So. 2d 605 (Fla. 3d DCA 1985); Klaesen Bros., Inc. v. Harbor Ins. Co., 410 So. 2d 611 (Fla. 4th DCA 1982); Linderman v. American Home Assurance Co., 414 So. 2d 1124 (Fla. 2d DCA 1982).

Because, in other words, I think it clear that the spoliation claim, while based on a different theory of the insured’s liability, was one for “bodily injury”, see cases collected supra note 2, which allegedly resulted from an accident, I would affirm.⁵

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¹Not to mention St. Thomas Aquinas and Judge Altenbernd. See Bain v. State, 730 So. 2d 296, 309 n.14 (Fla. 2d DCA 1999) (dissenting opinion).

²

The principle of law is firmly imbedded in the jurisprudence of this State that contracts of insurance should be construed most favorably to the insured. To draw such a fine distinction between the words “accident” and “accidental means” would do violence to this principle. It is a classic example of a distinction without a difference. As a practical matter, the average person buying accident insurance policies assumes that he is covered for any fortuitous and undesigned injury. The average man has no conception of the judicial niceties of the problem and even the most learned judge or lawyer, in attempting to understand and comprehend the niceties of the distinction, is left in a state of bewilderment and confusion.

Prudential Property & Cas. Ins. Co. v. Swindal, 622 So. 2d 467, 471 (Fla. 1993) (quoting Gulf Life Ins. Co. v. Nash, 97 So. 2d 4, 10 (Fla. 1957)(Drew, J., for the majority in part)).

³Before the serendipitous appearance of Norris on the scene, the carrier’s primary argument was that a spoliation claim is not “really” for the personal injuries or damages sustained by the plaintiff, but is instead “based on the loss of an intangible economic expectancy that they had arising out of the action they contemporaneously brought against the manufacturer and seller of the ladder.” Brief of Appellant at 18. Because the injured plaintiff is so obviously seeking, albeit on a distinct theory, only a recovery for the injury itself, and because the contention is so obviously contrary both to the law of insurance and of spoliation, which is that “only for purposes of section 768.041, the spoliation claim is the same tort for the same damages as the underlying products liability claim,” Builder’s Square, Inc. v. Shaw, 755 So. 2d 721, 725 (Fla. 4th DCA 1999), review denied, 751 So. 2d 1250 (Fla. 2000); see Miller v. Allstate Ins. Co., 650 So. 2d 671 (Fla. 3d DCA 1995), review denied, 659 So. 2d 1087 (Fla. 1995); Oliver v. Stimson Lumber Co., 297 Mont. 336, 993 P.2d 11 (1999); St. Mary’s Hosp., Inc. v. Brinson, 685 So. 2d 33 (Fla. 4th DCA 1996), review dismissed, 709 So. 2d 105 (Fla. 1998), I regard this position as entirely specious.

⁴Although I think Norris‘ reasoning is incorrect, its result may be defensible because the underlying tort in that case was an assault and battery which was excluded from coverage. Thus, at least arguably it was neither “an occurrence” or “an accident” within the meaning of the policy. There is no such basis, or any other, for the result in this case.

⁵I find even less merit in the appellant’s alternative claims that the policy’s worker’s compensation and employer’s liability exclusions apply.